Tue, Jul 08, 2003 - Page 16 News List

Waking up and smelling the coffee

Two `Viet Kieu,' or overseas Vietnamese, have been making a name for themselves in the world's second-biggest coffee exporting nation

REUTERS , HO CHI MINH CITY, VIETNAM

A scene in one of the up-and-coming trendy cafes in Vietnam's capital Hanoi, yesterday. More Vietnamese are learning to enjoy a cup of coffee and the emerging cafe lifestyle, to the delight of cafe entrepreneurs like David Thai and Dang Le Nguyen Vu, who each have rival coffee shops that are seeking to tap into a growing appreciation for the brew in the world's second-biggest exporter of coffee.

PHOTO: REUTERS

He made a name for himself by opening Au Lac Cafe in an elegant French-style villa in Hanoi, and his fashionable coffee shops are now Vietnam's answer to Starbucks.

Seattle-born David Thai, 31, is one of Vietnam's two coffee kings.

The other, Dang Le Nguyen Vu, 32, was raised in Vietnam's rugged central highland area. In contrast to Thai, his focus is the mass market. Across the country he serves up steaming mugs of coffee to factory workers and office clerks.

Between them they are encouraging the population of the world's second-biggest coffee exporter after Brazil to acquire a liking for branded brews. The entrepreneurs run rival cafes and distribute packaged processed beans in a tea-drinking nation where instant coffee is popular and sidewalk shops that sell individually filtered cups serve them thick and with sweetened milk.

"This country needs good coffee," declares Thai, a "Viet Kieu," or overseas Vietnamese who could barely speak a word of the language when he arrived to find his roots in 1995.

Vietnam's 80 million people down just 5 percent of its total coffee output. But with coffee prices plummeting to a 30-year low on overproduction some blame on Vietnam, the industry is looking to pump up consumption.

The country exports robusta as a raw, green bean, which roasters like Nestle SA and Sara Lee grind into instant coffee. Higher value, more aromatic Arabica beans are not widely grown in Vietnam.

Thai passed on a job offer from Citibank to start his venture.

Vu, whose thinning hair belies his youth, hocked his friend's motorcycle to pay bills in the early days.

"I told him that if my business failed he would lose the bike. It took him several years to save for it, but he accepted it and what he gave me was so much," he said.

A Vietnamese coffee

Step 1: An aluminum filter containing coffee granules is placed on top of the cup so that when hot water is poured into it, the coffee drips into the cup.

Step 2: The result is a top layer of bitter coffee and a bottom layer of sweet condensed milk.

Step 3: Drink. The marriage of the two opposite flavors creates a smooth, rich taste.


Tall, wavy-haired Thai ruefully recalls trying to roast coffee beans in a frying pan in his kitchen.

His Viet Thai International has 500 staff and runs nine Highlands Cafes reminiscent in look and set-up to Seattle-based Starbucks, which has no presence in the country. It also sells Highlands branded coffee in supermarkets. Thai believes Vietnam has room for about 15 of his cafes that serve a middle- to high-end market.

Vu's Trung Nguyen Coffee, with 1,000 direct staff, disagrees, and has gone for volume.

The name is emblazoned on 400 shopfronts from Ho Chi Minh City to rural backwaters. And there are six branches overseas, including China, Japan and Singapore.

Vu says he wanted to establish the network first, then work on the look and feel later.

And while Thai owns his cafes, Vu charges cafe owners a royalty to use his Trung Nguyen name and takes a cut of the revenues.

"My goal is to change the world's perspective on Vietnamese coffee and how we consume coffee," Vu said, as he sat in a tastefully decorated meeting room of his newest venture, an upmarket business club and restaurant in Ho Chi Minh City.

He won't provide figures, but says Trung Nguyen is profitable.

Each coffee king operates factories that process the ground bean for local and overseas sale. Vu pioneered a numbering scheme for his packaged coffee to indicate the strength of the brew.

Vu regards Thai's cafes as minnows competitively, though he concedes the Viet Kieu brings in Western expertise and business acumen.

Neither is standing still. Vu wants four more cafes in Japan.

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