VietNamNet Bridge – Dang Le Nguyen Vu, called the “Coffee King,” who stated that he will begin conquering the US market in 2013 but still has not done anything to implement the plan so far, has been described by local newspapers as a “braggart.”

Mr Dang Le Nguyen Vu

The ambitious Coffee King

In early 2013, when the well-known US coffee brand Starbucks joined the Vietnamese market, Dang Le Nguyen Vu surprised the public with the statement that Starbucks is not a redoubtable rival, describing the US brand as the giant with no character which sells the coffee flavored water with sugar.

Just some days after mocking at the US brands, Vu stated that he will conquer the world’s most potential coffee market – the US – right in 2013. In an interview given to Bloomberg on February 2013, Vu said he would sell 15 percent of the company’s stakes to get money to buy some roasters in the US. He also revealed the plan to open shops in Seattle, New York and Boston in 2013.

Analysts have every reason to doubt about the feasibility of Vu’s ambitious plan. A food expert said that in order to be able to bring its coffee products to the US, Trung Nguyen has to satisfy a lot of strict requirements set by the US FDA and maintain the registered quality, or it will see the license to be revoked forever.

Vietnam has great advantages in Robusta, but this kind of coffee has not been favored in Europe and not chosen by the world’s roasters. It is mostly used to make instant coffee. This would be a big challenge for Trung Nguyen, because the major targeted markets for G7 coffee are Asia and the countries with medium incomes.

The expert also said that it is nearly impossible to compete with Starbucks in the US, the “giant with no character.” The VIA trademark of Starbucks alone reportedly brought the turnover of over $200 million in the US market in 2012, or two years after the debut. Meanwhile, $200 million was the total turnover Trung Nguyen got after its 10 year-operation, from all of its products.

Big difficulties ahead

Analysts have noted that with G7 Mart chain, which was once the pride of Trung Nguyen, it has gradually lost its position once more and more G7 marts of the chain has been transferred to Vinacafe Bien Hoa and Nestle.

As for the franchise coffee chain, nearly 100 percent of cafés bearing the name “Trung Nguyen” have been opened by Trung Nguyen Company itself in an effort to increase the brand presence in the market.

However, a big problem exists that a lot of cafés illegally “borrow” the Trung Nguyen name, thus leading to customers’ misunderstanding about Trung Nguyen’s quality.

In big cities, a lot of cafés have arisen and used Trung Nguyen’s logo and name. They just need to use Trung Nguyen’s roasted coffee to be able to use Trung Nguyen brand in doing business. Many of them later use coffee from other roasters, but still keep Trung Nguyen name. As a result, the prestige of Trung Nguyen brand is in the danger.

An expert has noted that Trung Nguyen has fallen into the trap set by itself when launching too many brands, which makes customers lose their way in the “labyrinth.” Customers cannot tell the difference between “Trung Nguyen No 1” and “Trung Nguyen.”

Tri Thuc