Coffee and tea chains growing rapidly again

HANOI: Coffee and tea chains are no longer have it as easy as they did before the pandemic.

But, giants in the field of fast-moving consumer goods keep entering the industry, according to insiders.

Since the pandemic, Vietnam has exploded with old and new names such as Phuc Long Coffee and Tea, PhinDeli Cafe, Katinat, and Cafe Amazon.

Last year, PhinDeli Cafe, after returning to Nova Service, a member of realty Nova Group, increased rapidly.

Currently, PhinDeli Cafe has more than 20 stores with a large area in prime locations in Ho Chi Minh City, such as Dong Khoi, Nguyen Hue, Nguyen Thu Minh Khai, Phu Dong crossroads, Nguyen Du, Tran Hung Dao, and Dien Bien Phu .

PhinDeli Cafe also appears in many urban areas and tourist complexes of Nova Group, in various provinces and cities.

A representative of Nova Service said it plans to develop 100 PhinDeli Cafes outlets across the country this year.

By 2026, it will increase to 2,500 stores domestically and abroad, such as in North America, China, South Korea and Japan.

Media reports have it that in addition to PhinDeli Cafe, Nova Service has many tea and coffee outlets in mid to high-end segments, such as Gloria Jean’s, Co Ba, Beach Club Coffee and Kalea Coffee.

Established in 2016, the Katinat Saigon Kafe chain also grew rapidly. By the end of 2021, only 10 small coffee shops were in the center of Ho Chi Minh City.

Since the beginning of 2022, Katinat Saigon Kafe had 33 large stores in many prime locations in the city and neighboring provinces, and aims to expand the chain to 50 stores.

Phuc Long Coffee and Tea, after being taken over by the Masan Group in 2021, expanded its presence to 93 stores and 981 integrated kiosks in the supermarket chain of WinMart.

According to Masan, the number of Phuc Long Coffee and Tea stores and kiosks will continue to increase from now until the end of the year because this is the business segment that is generating great revenue growth for the group.

Meanwhile, Cafe Amazon, a member of Central Group and one of the largest coffee brands in Thailand with more than 3,000 stores, has been present in Vietnam since 2019, but due to the pandemic has delayed its expansion plans.

Up to now, only 12 Amazon Cafe stores have been opened in Vietnam.

Taking advantage of the market recovery, Central Group plans to open 26 more Amazon Cafe stores in the southern region this year and aims to expand nationwide in the future.

The brand will focus on its franchise strategy to accelerate the chain’s presence.

As a known name, The Coffee House, after closing more than 40 stores during two years of the pandemic, now has 157 outlets.

Ngo Nguyen Kha, chief executive officer of The Coffee House, said: “Knowing the successful formula to open the chain before the pandemic cannot be applied now because the experience has changed.

“Therefore, the company is not racing to open the chain at this stage, but looking for more suitable value.”

He added: “Customers now want to experience more products, so we have focused on products and introduced new product sets.”

Du Duy Thanh, chief executive officer of FnB Directo Company, a training specialist in food service business strategy, is consulting with several new coffee chains that will be launched by the end of this year.

Thanh said: “Compared to before the pandemic, investors approach the market in a more scientific and professional manner by participating in training courses when they about to open a shop.

“Before, many people just put in their money and got to work.

“And with high growth, the industry’s prospects are expected to be good over the next few years.”

He added that the food and beverage (F&B) industry was under pressure on investment costs, and chains must respond flexibly to keep customers rather than increase menu prices, because the Vietnamese market is “very sensitive” to price.

Many systems are redoing the menu to increase healthy but low-cost dishes, while reducing labor-intensive dishes to improve business efficiency.

Thanh said: “The coffee market has many new chains but no clear style, so customers are not loyal and easily fall into price competition.

“When personalizing a coffee chain, investors should focus on and create loyal customers and compete with long-standing famous coffee chains.”

Tran The Vu Thanh, the sales director of iPOS.vn, which provides management solutions for the F&B industry in the south, said: “Vietnam’s industry is changing positively. Since the beginning of the year, customers have come to us in droves.

“They need tools to optimize management, use technology to have accurate data and help them make more accurate decisions. Digitisation is a solution to help the F&B industry solve operational problems effectively.”

Meanwhile, brand expert Vo Van Quang said that coffee chains have become very competitive, so the probability of success will be for businesses with more professional and larger capital resources and support value chains.

“The essence of coffee is to drink immediately. The cost-profit ratio is large, so it is easy to make a profit, but it is no longer a lucrative market.

“In such a situation, some chains develop more by-products or diversify and services to optimize their premises and ensure profits.

“It is important that when expanding the business to other products besides coffee and water, businesses keep their core identity,” he added.

Masan recently poured another 3.6 trillion Vietnamese dong (RM690mil) into the Phuc Long chain, raising its valuation to 10 trillion dong (RM1.9bil).— Viet Nam News/ANN

.