The reasons why the Vietnam coffee factory is a considerable source for wholesale coffee buyers is that they have more competitive price, product quality diversity, and large quantities.
- 1 Brief information about Vietnam coffee factory
- 2 Main location of Vietnam coffee factory
- 3 Competitive advantages when buying coffee at Vietnam coffee factory
- 4 Factors affecting the development of Vietnam coffee factory
- 5 Looking for a reputable Vietnam coffee factory
- 6 Guideline for the effective working with Vietnam coffee factory
- 7 Recommendation: Top Vietnam coffee factory
Brief information about Vietnam coffee factory
Currently, Vietnam has about 150 registered coffee processing coffee factories, including several joint ventures with foreign partners. In addition, most of the local processing merchants operate on a small scale and do not have a business registration. Vietnam coffee factories have a production scale of about 5,000 to 60,000 tons per year, producing a total of over 1 million tons per year.
Definition of Vietnam coffee factory
Vietnam coffee factories are places where Vietnamese coffee is processed with the aim of changing the form of coffee to another.
There are two types of Vietnam coffee factories being in charge of two different processing stages:
- Processing Vietnam coffee factory, also known as Vietnam coffee manufacturer, plays the role of processing coffee cherries into green coffee beans. Vietnam coffee processing factories supply green and roasted coffee beans and often sell in bulk. Therefore, bulk coffee buyers are often interested in Vietnamese coffee processing factories, which are also the main source of Vietnamese coffee exports.
- Deep-processed Vietnam coffee factory is defined as a factory that processes finished coffee products such as coffee powder. Currently, in Vietnam, these coffee factories are invested by modern technology and foreign capital with the purpose of processing and exporting Vietnamese instant coffee to the world and a part of the domestic consumption. They import coffee from processing Vietnam coffee factories and do intensive processing. However, in Vietnam, there are not many modern factories like this.
In addition, the Vietnam coffee factories can also be a small coffee shop. There, they have roasters, coffee machines – tools to directly brew coffee cups. Their business objective is to provide retail finished coffee products which are coffee drinks. The reason this place is called Vietnam coffee factories is that the preparation and processing of coffee drinks is an art. Coffee roasters are artists, so their roastery is called such a solemn name, but this place is not a Vietnam coffee factory.
Main activities of Vietnam coffee factory
Vietnam coffee factories will focus on the period from growing area to supplying to traders or traders.
- The Vietnam coffee factories will collect coffee cherries from farmer households and cooperatives.
- Then, take them back to the Vietnam coffee factories to process into green coffee beans. The three main processing methods carried out in this stage are dry processing, wet processing and honey processing.
- Next, the coffee is packed and stored at the Vietnam coffee factories until shipped to the buyers. Vietnam coffee factories can also actively find buyers.
Products are being widely distributed by Vietnam coffee factory
Because about 90% of Vietnam coffee production is green coffee, Vietnamese green coffee processing factories also make up the majority. The main products they provide are Vietnam Arabica and Vietnam Robusta green coffee beans, a small part will provide additional roasted coffee.
Currently, all coffee cherries after being harvested will be directly brought to Vietnamese coffee factories for processing, packaging and preservation. Because Vietnamese coffee factories often sell coffee in large quantities, prices are competitive because they do not have to spend too much shipping costs. Therefore, the price of coffee at Vietnam coffee factories is often cheaper than buying through coffee traders.
|Green coffee products||The price range at Vietnam coffee factory|
|Commercial Robusta||1600 – 2300 USD/ton|
|Fine Robusta||3000 – 4500 USD/ton|
|Commercial Arabica||3800 – 4500 USD/ton|
|Premium Arabica||4500 – 5400 USD/ton|
|Specialty Arabica||9000 – 11000 USD/ton|
Bulk coffee buyers, coffee traders, coffee exporting companies, raw material purchasing companies, input logistics companies, etc. are the target customers of Vietnam coffee factories.
Development orientation for Vietnam coffee factory
Vietnam is a country with the second largest coffee export volume in the world, but the value of coffee is not high. Currently, Vietnam mainly focuses on the cultivation stage which contributes only about 10% in the value chain. After being harvested, coffee beans will be preliminary processed and exported to developed countries with high-tech techniques to prepare for deep processing. As a result, Vietnamese coffee brands are gradually replaced by famous foreign brands and Vietnamese enterprises cannot gain added value in the next stage. The uneven development of links in the value chain of Vietnam’s coffee industry has hindered the development of this industry.
A bright spot of Vietnam’s coffee industry is the structural transformation from focusing on primary processing – exporting to exporting coffee in the form of roasted, ground and instant coffee. This is an important link in improving the quality and value of coffee beans, and at the same time enhancing the value obtained in the global value chain.
Main location of Vietnam coffee factory
The growing areas are the places where Vietnam coffee factories are concentrated the most because the beans, after being picked at the plantations, need to be processed at the factories within 24 hours to ensure the integrity of the beans. Therefore, Vietnam coffee factories are often located next to the largest coffee plantations in Vietnam such as the Northwest, Central Highlands, and Quang Tri.
In the Northwest, there are two main coffee producing provinces, Son La and Dien Bien, so Vietnamese coffee factories are also concentrated in these two provinces. This rugged mountainous terrain is difficult to locate a Vietnam coffee factory with thousands of square meters. However, with the support of the government and the investment of foreign companies, Vietnam has successfully built some factories in the Northwest region and some northern provinces such as Hung Yen to facilitate the processing of coffee in the Northwest.
The Central Highlands has always been a key coffee growing area of Vietnam, so many Vietnam coffee processing factories were built in this area and neighboring provinces to facilitate processing such as Dong Nai.
Quang Tri is a fertile land to grow high-quality Arabica coffee, typically Khe Sanh specialty coffee, so Vietnam coffee processing factories are also concentrated here with the aim of promoting specialty coffee exports, contributing to adding value in the Vietnamese coffee value chain.
Related: Strong growth of Vietnamese coffee wholesale in difficulties
Competitive advantages when buying coffee at Vietnam coffee factory
Vietnam coffee factory is a worthy source because of its large quantity, stable supply, competitive prices and product diversity.
- Large and stable quantity
Vietnam coffee factories usually provide large and stable output. The production of a Vietnam coffee factory depends on whether the coffee plantations can produce a lot or not. In fact, Vietnam’s coffee output in the last three years has always been at a stable level and ranked second in the world. Despite being affected by natural disasters and epidemics, the output decreased insignificantly. Therefore, Vietnam coffee factories can completely supply large quantities of coffee to coffee traders.
- Competitive price
Vietnam coffee factory usually bears the least cost in the coffee production chain. For example, they don’t have to pay the costs of domestic transportation, import and export taxes, customs fees, etc., and Vietnam coffee factory usually sells raw coffee beans in bulk, unprocessed coffee beans. multiple processing stages. Therefore, the price at the Vietnam coffee factories is usually the cheapest price.
- Diverse quality products
Vietnam coffee factories are often located near plantations, so the time to transport coffee cherries from coffee plantations to Vietnam coffee factory is very short. Therefore, coffee beans often keep their original quality intact. Going through the preliminary processing process, coffee beans will produce green coffee beans with different properties.
Factors affecting the development of Vietnam coffee factory
Coffee plantations are the main source of Vietnam coffee factories, so coffee production has a direct influence on the development of Vietnam coffee factories.
Vietnam coffee output in the last two years has decreased slightly due to the impact of consecutive natural disasters at the end of 2020 and the beginning of 2021 and the prolonged Covid-19 epidemic which causes the production to have many interruptions. The reduction in production leaves some Vietnam coffee factories without enough coffee to supply their customers. But in general, Vietnam coffee factories can still meet the needs of domestic and international customers.
The main customers of the Vietnam coffee factory are not only Vietnamese coffee traders but also international coffee importers. The Covid-19 epidemic also restricts them from going to Vietnam coffee factories to buy and import coffee. Therefore, Vietnam coffee factories have difficulty in finding new customers or have to find ways to deliver coffee to regular customers.
Looking for a reputable Vietnam coffee factory
If you want to buy cheap and quality products, you need to find a reputable Vietnam coffee factory. In the era of digital technology and social distancing, traditional Vietnam coffee factories also seek to join digital platforms to refresh their image, actively seek customers, instead of just focusing on production and passively waiting for customers as before. Therefore, there are many ways to find reputable Vietnam coffee factories such as searching on Google, on E-commerce platforms, even through the local embassy or intermediary companies.
A Vietnam coffee factory wants to prove its prestige, it also needs to provide a full range of production certifications such as:
- Certificate of eligibility for food hygiene and safety at the coffee production site
- Coffee product testing
- Announcement of the quality of coffee products
- Register for coffee product barcodes
- Register product packaging copyright (if necessary)
- Register an exclusive trademark/logo for the brand (if any)
Or related business licenses such as Business Registration License.
If that Vietnam coffee factory wants to export coffee to foreign markets, it needs a Certificate of Free Sale (abbreviated as CFS), Health Certificate (abbreviated as HC).
Guideline for the effective working with Vietnam coffee factory
To buy coffee in bulk, wholesale coffee buyers need to understand the 6 steps to work with the Vietnam coffee factory.
Send Letter of Intent (LOI)
Buyers need to send LOI to the Vietnam coffee factory to describe in detail their needs in terms of specifications, quantity, and quality so that the factory can prepare suitable goods.
A standard and most convenient LOI for both parties includes information about the buyer’s company to increase the credibility of the order, order requirements, destination port, packaging requirements, and other notes if any.
Finalize the final FCO
The Vietnam coffee factory will check the quantity and condition of its goods to see if it is suitable for the needs of the buyer and negotiate with the buyer about the final FCO.
After understanding the needs of both parties, the Vietnam coffee factory will send samples to the buyer so that the buyer can experience and make a decision about the product.
This is an extremely important step, marking the legal cooperation of the two sides. After signing the contract, the two parties will have to perform their rights and obligations according to the negotiated terms. If either party breaches the contract during the performance of the contract, it must compensate according to the predetermined terms and take responsibility before the law. Therefore, before signing a contract, both parties need to carefully check the terms in it.
The Vietnam coffee factory will have 2-4 weeks to prepare the goods and deliver to the buyer according to Incoterms terms.
Receive goods and feedback
After receiving the goods, the buyer needs to carefully check both the quality and the quantity. If there are any problems, the buyer should immediately contact the Vietnam coffee factory to negotiate and resolve.
Recommendation: Top Vietnam coffee factory
Here are the top 5 reputable Vietnam coffee factories that wholesale buyers can consider.
Trung Nguyen Factory
Trung Nguyen Coffee Co., Ltd has the largest processing Vietnam coffee factory in the Central Highlands, including two workshops for processing powdered coffee and instant coffee, with a total investment value of more than 152 billion VND.
In which, the coffee powder processing factory has a capacity of 1,500 tons of finished products/year. 60% of the powdered coffee will be exported to Japan, Singapore, Thailand, Germany, etc. and some new markets such as the US, Canada, Russia, UK, France.
Particularly, the instant coffee factory with modern European technology is worth more than 120 billion VND.
K-Agriculture’s coffee production and processing factory is planned on an area of more than 14,000m2 at Pho Thap Residential Group, Di Su Ward, My Hao Town, Hung Yen Province.
Arabica coffee is transported from the cooperative in Son La to the factory in Hung Yen for processing and continues the next journey such as exporting standard green beans or deep processing of finished products. This Vietnam coffee factory has a drying yard system of 7,000 square meters, a drying factory area of 720 square meters, a production area for roasting and grinding finished coffee products with an area of 12 square meters, and a packing and storage area of up to 1,400 square meters.
Whatsapp: +84855 555 837
Vinacafe Bien Hoa Factory
Vinacafé’s third factory is invested more than 500 billion VND, built on an area of nearly 5 hectares in Long Thanh Industrial Park, Dong Nai province. This Vietnam coffee factory has a capacity of 3,200 tons of pure instant coffee/year with the most advanced technology today. The capacity of this factory is four times larger than the second factory and 40 times larger than the first factory of Vinacafé Bien Hoa.
Minh Tien Factory
Minh Tien Coffee Processing Factory at Nguyen Thi Minh Khai, Quyet Tam, Son La. with a scale of 45,000m2. This Vietnam coffee factory produces 20,000 tons of coffee/year, supplying both domestic and foreign markets.
Thai Hoa Factory
Thai Hoa coffee processing factory using the most advanced technology of Pinhalense Group (Brazil) invested by Thai Hoa Group, is located in Chiang Mung commune, Mai Son district, Son La province. This Vietnam coffee factory has a capacity of 30,000 tons of green coffee/year, which can meet the high-quality processing needs of the entire Northwest region.