Vietnamese Coffee Beans: Growth Regions & Future Outlook

The reputation of Vietnamese coffee beans is growing day by day. Since first introduced in 1857, Vietnamese coffee is now present in more than 80 countries and territories worldwide. The country accounts for 8.3% of the global coffee share and 16% of the market share in the EU, becoming the world’s second-largest coffee exporter just after Brazil.

What coffee varieties are available in Vietnam? Where are Vietnamese coffee beans grown? What are the challenges and expectations for the future of the country’s industry? This article will seek to answer these questions and demonstrate how Tuan Loc Commodities, as a coffee exporting company, adds value to Vietnamese whole bean coffee export.

A Look Into the Vietnamese Coffee Industry

The coffee bean was first introduced to Vietnam in 1857 by the French colonialists after discovering the ideal environmental conditions for coffee cultivation in the country. In 1986, after the reunification of Vietnam, the government noticed the potential in coffee as a crop for both exports and domestic use; thus, introduced state-funded farms while also encouraging families with lands to grow coffee. As of 2022, Vietnam is the home to 710,000 hectares of coffee in 20 provinces, of which 650,000 are harvestable, mainly in the Central Highlands regions which is often referred to as the “capital of coffee.” The high-yield production center for high-quality coffee focuses on four key provinces – Dak Lak, Lam Dong, Dak Nong, and Gia Lai. In the 2019/2020 year, coffee output in Vietnam reached 30.48 millions 60-kilogram bags.

Currently, Vietnam grows three coffee varieties including Robusta, Arabica, and Liberia. Due to the small growing area of Liberia coffee, Robusta and Arabica are the two most common coffee varieties of Vietnam. Robusta accounts for 95% of Vietnamese coffee production while Arabica make up the remaining 5%. With a large acreage, it is estimated that Vietnam produces 20% of the world’s coffee and 40% of all Robusta, making it the world’s leading Robusta crop.

95% of Vietnamese coffee production is attributed to Robusta, with the remaining 5% being composed of Arabica

Robusta Production Regions

The majority of Vietnamese Robusta coffee production occurs in the Central Highlands regions, specifically five provinces including Lam Dong, Dak Nong, Dak Lak, Gia Lai, and Kon Tum. The total estimated planted area is approximately 570.780ha with the altitude ranging from 500m to 1500m. The area has a warm tropical climate influenced by the South Asian monsoon and distinct dry and rainy seasons. The average temperature is said to be between 24°C and 26°C. These factors make the Central Highlands ideal for Robusta coffee, which thrive in warm weather, high humidity, and weak direct sunlight conditions. The total production volume for the year 2022/2023 is estimated to be 29.2 millions in 60-kilogram bags.

In terms of flavor, Robusta brew is often a medium-dark roast with notes of dark chocolate, hazelnut, and caramel. Most coffee drinkers describe Robusta as strong, harsh, thick and often having a burnt, overly bitter taste with a weaker aroma. This is a result of it having approximately twice as much caffeine and half as much sugar compared to Arabica.

Vietnams Central Highlands Is The Home For Growing The Potent Robusta Coffee Bean

Arabica Production Regions

Unlike Robusta farms, Arabica production in Vietnam is scattered from north to south. Arabica coffee is grown in pockets, generally in areas where altitudes are higher. Some outstanding areas include Da Lat (Lam Dong), Dien Bien, Nghe An, Son La, and Quang Tri, which range in maximum altitude from 1000m to 1600m. These regions are ideal for the growth of Arabica coffee as they are mountainous areas with average temperature between 20°C and 22°C and an annual rainfall of 1,300mm to 1,900mm. As of the year 2022/2023, the total production volume of Vietnamese Arabica coffee is projected to be 1.02 millions of 60-kilogram bags.

Each of Vietnam’s Arabica growing regions has its own distinctive and unique flavor. Da Lat is widely considered to be the “paradise” for Vietnamese Arabica, thanks to its altitude and cool climate all year round. Son La province is the second largest Arabica coffee farm of Vietnam. Son La’s coffee plantations can reach altitudes of 1000m – a perfect place to create well-grown Arabica coffee trees of high quality. Therefore, Arabica coffee from Son La – one of the best Vietnamese coffee – is especially sweet, fruity, and aromatic. Generally, Vietnamese Arabica coffee is a medium full-bodied roast with rich and lively notes of chocolate, vanilla, and caramel. It is also known for its smoothness.

Northwest Vietnam Coffee – Special Arabica Coffee

Challenges And the Future of Vietnamese Whole Bean Coffee

Despite being the world’s second largest coffee exporter, the majority of Vietnamese coffee exports remain in the form of unprocessed beans with little added value. The proportion of processed coffee with high added value in Vietnam accounts for only 10% of the total production of green coffee, while the export of raw coffee accounts for 90%.

The Vietnamese coffee industry is also highly fragmented. Most of the crops are grown and owned by smallholder farmers. Such small-scale production, fragmentation, and the dependence of farming households have produced differences in investments, harvesting, and processing methods between farmers, resulting in unreliable output and uneven quality of products.

In addition, the overall industry lacks updated modern infrastructure and equipment. The majority of the current facilities consist of using tarps to sundry the coffee beans. This basic way of roasting/drying the coffee beans can lead to a drop in quality, especially during Vietnam’s rainy season.

As Vietnam looks to step up in the coffee industry, total exports are expected to reach US$6 billion by 2030. However, more than 30% of Vietnam’s coffee trees are between 20 and 30 years old and are beyond their peak productive age, which is usually between eight to 15 years old. It is predicted that by 2050, about 30% – 50% of the coffee crop land will be degraded due to serious damage from climate changes. The current farming techniques are unstable and could negatively affect the environment.

Meanwhile, coffee consumers, especially Europe – the world’s largest coffee consuming market, are more and more interested in production sustainability and quality. Right now, sustainable coffee accounts for only about 9% of coffee exports in Vietnam.

This calls for attention and effort in breaking the old “tradition”.

Climate And Consumer Behavior Changes Demand Innovation In Farming And Sourcing Practices

Coffee Products Offered by Tuan Loc Commodities

Tuan Loc Commodities (TLC), aims to create a leading agri-business in Vietnam. TLC specializes in green coffee bean merchandise with two large dry-mills in Lam Dong province and Dong Nai province. Our dry mill in Bao Loc is equipped with a brand-new processing line with a grading capacity of 24 Mt/hour using the latest cleaning and color-sorting machines. The mill allows us to purchase coffee beans directly from the small farmers in the Central Highlands, enabling traceability and cost-competitiveness. In addition, we also centralize our export logistics at the secondary dry mill in Long Thanh due to its location near the Phuoc An seaport.

With the goal to produce the best Vietnamese coffee beans, our direct procurement from farmers enables us to research custom-qualities for the global coffee industry and ensure price competitiveness. Tuan Loc Commodities focuses on two major groups of coffee beans – Robusta and Arabica – from the Central Highlands and the Northern regions, where the best Vietnamese whole bean coffee is grown.

As a vertical integrated supplier, we present in every stage of production. All of the coffee produced and exported by TLC undergoes a strict quality evaluation in our cupping labs, where our Q-graders sample and assess the products to ensure the desired quality and characteristics that meet our clients’ requirements.

TLC Offer Custom-Quality Green Beans Coffee from Renowned Regions in Vietnam

Our Commitment to Sustainability

At Tuan Loc Commodities, the relationships with coffee farmers is built on transparency, communication, and mutually beneficial partnership. Our goal is to put more back into the food and farming system than it is taken out and create a ‘living landscapes’ where prosperous farmers and communities can co-exist within healthy ecosystems.

We believe direct trade in the coffee industry represents a shift towards more equitable and sustainable sourcing practices. It contributes to the overall improvement of the coffee industry, the quality of coffee produced, and the well-being of coffee-producing communities. Therefore, by investing in building a strong relationship with the coffee farmers, we are on our way to improve and enhance the quality of our Vietnamese coffee beans.

Our CSR program and sustainability projects include three key tactics, which are implementing Global Good Agricultural Practices (GAP) at the smallholders’ level, improving access to finance, healthcare, and insurance for the smallholder farmers, and reducing carbon footprint in the entire coffee supply chain.

Moreover, we understand that the social and environmental changes required to meet the United Nations (UN) Sustainable Development Goals (SDGs) need the collective effort of everyone. Therefore, Tuan Loc Commodities is working to define the concrete objectives of the SDGs in the Vietnam coffee context with the goal to incorporate those objectives into our action plan in the years to come.

Vietnamese Coffee Farmers Are the Key Stakeholders in Creating Sustainable Coffee

Vietnam is one of the key players in the global coffee industry, especially for Robusta coffee beans. The country’s landscape and climate create an ideal habitat for the growth of coffee trees. However, there are many challenges lurking in the future that require attention and efforts in farming and processing methods to maintain product quality and industry sustainability.

At Tuan Loc Commodities, we strive everyday to offer the best value propositions to our suppliers and our customers alike; and to become the most competitive, yet sustainable, player in the tree-to-boat coffee supply chain in Vietnam.

Tuan Loc Commodities

Your Go-To Partner For Green Coffee In Vietnam

Website: https://tlcommodities.com/

Hotline/WhatsApp: +84 329 969 469

Email: contact@tlcommodities.com

Linkedin: https://www.linkedin.com/company/tuan-loc-commodities/

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