With regard to market fundamentals, total coffee production increased from 133.99 million bags in 2010/11 to approximately 151.6 million bags in 2016/17. Vietnam has many coffee distributors, so there will be many different prices of coffee. This will be achieved through the reportâs unique analysis by providing detailed information about the internal and external factors that affect the market. Study for free with our range of university lectures! Any information contained within this essay is intended for educational purposes only. Coffee market is analyzed in depth by concentrating on domestic production and consumption. Summary the event: in a role of apprentice, somehow the reporter was got into a factory which is producing fake coffee in Hoc Mon . After drawing the curve of supply, we can see how the drought in Brazil affect the supply for coffee. However, price of Robusta coffee has fallen because of the Arabica coffee had also fallen. The market is expected to grow annually by 10.4% (CAGR 2020-2025). The profitability will be opti- Coffee or ca phe in Vietnamese was introduced by the French colonists and has quickly grown into a local habit and major export. Competition In Vietnam's Coffee Market is Hotter Than Ever. The amount of money they spend for the coffee is the opportunity cost to get the coffee for them. Beside the growth of production, Vietnamâs coffee culture is also well known with the unique brewing style. tential in importing coffee beans from Vietnam to Nordic market by using ―Five forces‖ framework and ―Value Chain‖ analysis. Vietnam - Coffee sector report (Vietnamese) Abstract. Accessed: April 1, 2014, from: http://www.tutor2u.net/blog/index.php/economics/comments/unit-1-micro-revision-on-price-elasticity-of-supply. Hard Copy Mail Delivery (+US$ 190.00), Engineering & Construction Services Company Report, Computers & Electronic Equipment Company Reports, Software & Technology Services Company Reports, Healthcare Equipment/Supplies Company Reports. Accessed: March 31,2014, from: http://www.ipsosconsulting.com/pdf/Ipsos-Research-Note-Vietnam-Coffee.pdf`. This makes it an essential source for commercial quality coffee giants such as Nestlé (Nescafé), which own several factories in Vietnam. The report will help you to find prospective partners and suppliers. Hallam, D., âFalling Commodity Price And Industry Responses: Some Lessons From The International Coffee Crisisâ, Food and Agriculture Organization of the United Nation. This result the increase of income of employment and decline the hunger rate. Time now is including the time the consumer have to go to the coffee shop and the time they have to wait for the coffee. Accessed: March 31, 2013, from: http://www.fao.org/docrep/006/y5117e/y5117e03.htm#TopOfPage. Sloman, J., Garrett, D.,2013, âEssential of Economicsâ , Pearson, p.p: 7. 2.2 Vietnam Coffee Chain Market Overview Architecture and Environmental Design; Art History Detailed analysis provided in the report will assist and strengthen your companyâs decision-making processes. The coffees mentioned in the thesis research are green coffee, roasted coffee Probably because of that, the instant coffee market in Vietnam is always hot. It proved that the demand of coffee in Viet Nam is very high and it also attracted some of big coffee distributor come to Viet Nam such as Starbucks and Coffee Bean and Tea Leaf. The labor forces are the farmers, who have years of experience on growing coffee, are paid to grow the coffee to export over sea. Combining primary and secondary techniques, researchers use data sources of different levels starting from international expert view on the market to the data of local authorities and associations. Rise of other culture coffee makes consumer curious and want to taste the different coffee style. Vietnam’s market may consume 70,000 tons per year. Reporter was following the factory’s owner to Kim Bien market to buy 15 arsenical material such as smell of coffee flavor, foaming agent for soap, food coloring industry and many more and blend with soya bean. After the true was exposed on newspaper, the consumers scared to drink coffee and switching to another substitutes, then you can see the demand curve moved from D1 to D2. Section 10: 200 USD——Cost Structure. A cup of coffee may not cost the consumer a lot of money, however if the consumers buy coffee everyday may cost them more than what they think. The global coffee market is projected to grow at a CAGR of 4.22% during the forecast period (2020-2025). Chapter Two: Vietnam Coffee Chain Market Major Player Share and Market Overview 2.1 Vietnam Major Player Coffee Chain Business Revenue. Vietnam coffee market structure: Vietnam coffee market structure is oligopoly, because there are a few firms that have the ability to enter this industry, and with many similar product taste (Sloman, Garratt, 2013). Registered Data Controller No: Z1821391. The weather can easily affect the productivity of coffee. Although Vietnamese coffee production has expanded for years, the value of coffee products is still low. However, during 2013-2017, the local coffee sector grew by only 6.57 percent annually mainly due to fluctuations on the global coffee market and the unbalanced domestic coffee export structure. Most of the Vietnamese coffee bean plantations are located in the area of Da Lat, nicely nicknamed 'Europe of Vietnam' because of its fresher climate and hilly landscape.Most of the tea, coffee and even the flowers sold across the country are originally grown there in the south. And when reporter asked about why donât you sale the real coffee then the owner of factory just give only one reason that about the price, the real coffe was cost over 200.000 VNÃÂ but fake coffee only cost over 100.000 to 120.000 to produce and sales. The plantations are mainly located in the Central Highlands regions of Vietnam, such as Gia Lai, Lam Dong, Buon Me Thuot, Dak Lak, and Kontum. This would not be good news for farmers but that is great news for other exporting countries in which have Viet Nam. | Normally, consumers who want to have a coffee cup to be more awake and focus on their work will have to scarify some of their alternatives to get the cup of coffee. When consumers decide to get a cup of coffee, they have to know the price of coffee that they will buy. Vietnam has experienced three sets of direct impacts as a result of the coffee crisis: Some regional economic shocks, socio-economic impacts in the primary coffee-producing regions that have resulted in the partial dismantling of … Against this background, the coffee price elasticity of supply is very low, which is only 0.13 in short run and 0.24 in the long run . Supply responses to falling prices have also been slowed in some cases by national efforts to assist producers, for example through price supports and debt relief. Coffee drinking in western cafes has becomes the vogue across Vietnam. More important, coffee is the daily need of Vietnamese people, because they need coffee to make them stay awake and gain energy to focus on work. Perspectives of future market development are also considered. In 2019, Vietnam exported $16.6B worth of services. In the report our group learn about four facts: First, the Vietnamese coffee market structure is Oligopoly, which has a few firms can enter and produce similar product. It makes the supplier decrease the cost to attract the consumers, at the curve you can see that P1 move to P2 and it makes a new equilibrium from E1 to E2, and besides that the quantity of coffee also move backward from Q1 to Q2, http://www.thanhnien.com.vn/pages/20120718/hai-hung-ca-phe-deu-ky-2-dau-nanh-+-15-hoa-chat-=-ca-phe-18-7-2012.aspx. The top services exported by Vietnam in 2019 were Travel ($11.8B), Air transport ($2.36B), Sea transport ($831M), Miscellaneous business, professional, and technical services ($646M), and Financial services ($210M). World coffee market 2.1 Production 2.2 Consumption 3. Chapter One: Coffee Chain Definition. You can view samples of our professional work here. After analyzing the impact of the event to the supply curve, coffee can easily be affected by the outside factors such as: environment, weather and people. The report includes detailed analyses of coffee market in Vietnam, information on major producers, distributing companies, and buyers. In the report, we learn about the market structure, the demand, the supply of coffee, the elasticity of demand and elasticity of supply. Because the changes in the supply curve above, the new equilibrium point will move to the new point which is from E1 to E2. In this case, with the impact of the drought, it makes the selling price increase from P1 to P2 because the productivity is less than before. The production of coffee is expensive, it include land, machine, labor, and material. Of course, the supply curve will move to the left, from S1 to S2 in the curve. According to a report of Vietnam Trade Promotion Department, “Vietnamese coffee has relatively low quality due to bad processing and drying equipment and obsolete harvesting technology”. This is … Post sees mild growth in the domestic coffee market because the Vietnamese coffee market needs more value-added coffee products to expand. That also affects the selling price in Viet Nam market, the selling price for coffee increase rapidly during the early in 2014. Vietnam's coffee industry is expected to grow strongly in the coming years as the population continues to expand at a rate of about one million people a year and the country and the tastes of its people become more sophisticated. Coffee makes people focus, smarter, gain energy, release stress (Gunnars, 2013) . Vietnam coffee is still very potential if coffee quality is improved. The alternative that they give up is the amount of time just for travelling to the coffee and waiting for the product. Abbreviations Executive Summary 1. Business environment 1.1 Macroeconomic situation 1.2 Legal framework 2. The report presents profiles of leading producers and lists major suppliers in the country. Vietnam PESTEL gives an overview of diverse macro-environmental factors (political, economic, sociocultural, technological, environmental and legal) and analyzes what influence they exert on a business. Presently, Vietnam forms strong production capacity of coffee bean rough processing and deep processing. The Coffee Paradox. For the Arabica coffee, it increases more than two times than the first days in October, 2013. The preparation process, as well as the blend of beans, helps give Vietnamese coffee its particular style. But as someone who has spent much time traveling through Vietnam, there’s one thing for me that stands out as synonymous with the country, and that’s the burgeoning coffee culture that has taken hold. Search this site: Humanities. It means that this market can consume 10% of the amount harvested each year which is 700,000 -800,000 tons. Especially, the supply for coffee is very sensitive with the weather. A coffee crisis in producing countries with a trend towards lower prices, declining incomes and profits affecting millions of people in the world's poorest countries. Base on the Hallam research, Vietnam coffee production is a strong producer, which can expand from 60 578 hectares to 463 450 hectares and coffee bean output increased from 96 000 tones to 800 000 tones, making Viet Nam the largest Robusta producer and second largest coffee producer in the world. Here are the 7 reasonsâ, Authority Nutrition. Company Registration No: 4964706. We've received widespread press coverage since 2003, Your UKEssays purchase is secure and we're rated 4.4/5 on reviews.co.uk. Vietnam coffee market structure is oligopoly, because there are a few firms that have the ability to enter this industry, and with many similar product taste (Sloman, Garratt, 2013). In the short-term adjustments can be made to reduce inputs including labor, but creating unemployment and stimulating migration. We're here to answer any questions you have about our services. The report also lists buyers within the sector, and provides the main markets review. The report aim to learn and understand the characteristic of the strongest product of Vietnam, which is coffee. BAC Reports, Email Delivery - PDF (on default), Time: The second alternative that consumer have to scarify is time. ( Hallam. However, the consumers give up the alternative of saving money, spending on other substitute, or even invest on a business. Coffee is a brewed drink prepared from roasted coffee beans (which are the seeds of berries from the Coffea plant). Export structure of coffee beans by country and territory, 2017/2018e Export structure of roasted ground coffee by … The convenient forms of coffee, like coffee pods and capsules and RTD coffee are becoming popular among masses (especially in North America and Western Europe) to prepare good coffee in the comfort of home, in less time. Coffee Market in Vietnam: Business Report 2020 provides a complete overview of current market state issued in a comprehensive and easily accessed format. The economy of Vietnam is a socialist-oriented market economy, which is the 36th-largest in the world as measured by nominal gross domestic product (GDP) and 23rd-largest in the world as measured by purchasing power parity (PPP). Think of coffee and you will probably think of Brazil, Colombia, or maybe Ethiopia. Reading Time: 5 minutes Mention Vietnam to anyone, and the conversation might conjure up a few things – the beautiful scenery, the tragic war, the chaotic, thrilling big cities. Tran, T., July, 2013 âVietnam Coffeeâs Industryâ, Ipos. The foreign trade analysis provides data on export and import volumes, dynamics, by country structure and prices. January 2020 More over, we can also learn what is the position of the product in the world market. http://www2.hcmuaf.edu.vn/contents.php?ids=8334&ur=hoainam. Disclaimer: This work has been submitted by a university student. (The popularity of coffee More over, there are also some brands of coffee product such as: Trung Nguyen, Y 5, Vina, etc. Do you have a 2:1 degree or higher? The United States continues to be a major export market for Vietnam's coffee bean exporters. Registered office: Venture House, Cross Street, Arnold, Nottingham, Nottinghamshire, NG5 7PJ. The production of coffee is expensive, it include land, machine, labor, and material. Meanwhile, demand for Arabica products rose only 1.9% in 2012, after rising 4.1% in 2011 and 5.4% in 2010. Gunnars, K., Feb 20,2013,âWhy Is Coffee Good For You? In details, during the early 2014, a seriously drought is destroying the coffee farms in Brazil which is the biggest exporting coffee countries in the world. Coffee has been a strong industry for year, however coffee supply has decreased the quantity and the quality by the countries, which import Vietnam coffee. This is not an example of the work produced by our Essay Writing Service. Reference this, Group members: Huynh Anh Tin, Pham Le Bao Tran, Pham Le Thien Huong. The growth of Vietnam coffee productivity has entered the world market and became the second largest coffee producer, after Brazil. Coffee was introduced to Vietnam in the 1800’s, and throughout the French Colonial period, Arabica was actually grown on many French-owned plantations. 70 pages Vietnam is a member of Asia-Pacific Economic Cooperation, Association of Southeast Asian Nations and the World Trade Organization. Meanwhile, according to the World Coffee Association, Vietnam’s domestic consumption is now nearly 3.6% which is the lowest in the group of coffee producers. Free resources to assist you with your university studies! Coffee Culture is increasing can also make consumers demand more coffee than before. Maja, W.,2013, âVietnam Coffee Production is Blooming, as is the Coffee Cultureâ, Tea & Coffee Trade Journal, p.p:32-33. The beverage-food industry businesses all want to grab the market pie. If you need assistance with writing your essay, our professional essay writing service is here to help! Your companyâs business and sales activities will be boosted by gaining an insight into the coffee market in Vietnam. Money: The first alternative that people have to pay in order to get their coffee. Until 2024, the coffee market in Vietnam is forecast to reach 1.21 billion USD (in retail prices), thus increasing at a CAGR of 9.86% per annum for the period 2019-2024. Purchasing coffee also occur opportunity cost, the consumer may decide the good that they want, so they can satisfied their simple needs. Vietnam: Revenue in the Coffee segment is projected to reach US$4,845m in 2020. Coffee only grows in high land area of Vietnam, so the investors have to buy large land and burn forest. Vietnam coffee market 3.1 Types of coffee produced in Vietnam It should not be treated as authoritative or accurate when considering investments or other financial products. Economics Sloman, J., Garrett, D.,2013, âEssential of Economicsâ, Pearson, p.p: 94. Vietnam is the largest Robusta coffee exporter in the world but mainly in raw form, which does not bring high added value. base on the survey of director of Thu Ha company, Thu Ha company produced 100 ton per year but only 30% of product was exported and the rest was consumed in domestic. | Opportunity cost is the alternatives consumers or producers have to give up when deciding purchasing or producing. Second, The elasticity of demand and supply are considered inelastic, because of price cannot change the supply and demand of coffee of Vietnamese people. And it takes a lot of time to find other substitute or to stop drinking coffee. Section 11: 500 USD——Conclusion. However, Drinking coffe is a Vietnameseâs culture for years so even if price change the customers are still buying the coffee. 4 Export of Coffee Beans in Vietnam 5 Market Competition in Coffee Industry in Vietnam 6 Analysis on Major Domestic Coffee Brands in Vietnam 7 Prospect of Vietnamese Coffee … Supply responses to price incentives are not balanced: periods of rising prices stimulate new plantings and other fixed asset investments, which does not change when price fall, it can not be replaced when it reach to the end of production. According to this event, the reason for increasing selling price for coffee also concern about the speculation of firms and other organizations. Experts on the world coffee market often make reference to the "coffee paradox". To export a reference to this article please select a referencing stye below: If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: Our academic writing and marking services can help you! The event mention about the increase in price of coffee not only in Viet Nam and in the world because that is affected by the drought in Brazil. Even though price of coffee is change due to price change, coffee it self will not decrease the quantity of coffee supply. Most of Vietnam coffees are export to countries such as: England, United States, Japan, Korean, Hong Kong, Italy, etc. No plagiarism, guaranteed! How did its market … But the world's second largest exporter today is Vietnam. The gap from P1 to P2 will much bigger than other situations. Because coffee is consisted of caffeine, so some of customers cannot quit coffee. Third, the opportunity costs in order to buy a cup of coffee. Robusta coffee is more bitter and less aromatic than Arabica coffee and is used very often for instant coffees and low-quality blends. Soluble coffee is enjoying light growth because of the increasing number of western expatriates living in the big cities in Vietnam. In order to make the Vietnamâs coffee become acknowledge for both quantity and quality, finding solution and make changes in production are required to boost the production. The coffee type mainly grown in Vietnam is Robusta, a relatively low quality coffee in comparison to Arabia. Copyright © 2003 - 2020 - UKEssays is a trading name of All Answers Ltd, a company registered in England and Wales. Last, analyzing the demand and supply of Vietnamese coffee. But Vietnam's coffee is of high quality and planted on mountainous areas because of "a large range of temperature between day and night and basaltic soil" (Sinh, Sutcliffe, and Van, 1999, p.68). The designed rough processing capacity is 1.5 million tons/year, coffee bean baking and coffee powder processing capacity is 52,000 tons/year and instant coffee production capacity is … Fig.1: Short run of coffeeâs price elasticity of supply. In order to get a cup of coffee, customers have to sacrifice some of the alternatives to get the coffee they demand. Readers will gain an unrivalled in-depth knowledge about the market. The eighth chapter will be dedicated to build-ing the cost structure and price model of importing coffee beans from Vietnam to Nor-dic market, specifically Sweden, Finland, and Denmark. Accessed: April 2, 2014, from: http://authoritynutrition.com/why-is-coffee-good-for-you/. It also relates to the forecasting and navigation, which offer a number of solutions for the period until 2020. Vietnam Coffee Market T he Italy Coffee Market was valued at US$ XX Mn in 2017 and is expected to reach US$ XX Mn by 2022 growing at a CAGR of XX% during the forecast period. 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