Case study: Trung Nguyên coffee
By Morgen Witzel

The story. Coffee cultivation in Vietnam began under French colonial rule in the 19th century and soon became a staple industry. By the mid-1990s, the country had become one of the three biggest coffee producers in the world.
Much of it, however, was low quality and sold at cut prices overseas. Vietnamese-American entrepreneur Dang Le Nguyen Vu believed high-quality Vietnamese gourmet coffees could be produced and sold profitably. So, in the mid-1990s, he launched Trung Nguyên, a coffee manufacturer and café chain.

The challenge. Vietnam is an emerging market. In 1995, per capita income was only $250 (the 2010 figure was $1,200). This was one reason why Mr Vu chose to develop a luxury brand that would appeal to both domestic and export markets.
To do so, he would have to persuade the home market that his expensive product offered value, and convince overseas customers that Vietnam could produce gourmet coffee.

The home market. As the owner of a coffee-processing business, Mr Vu could improve the quality but there was no efficient distribution network. The answer was to set up a chain of coffee shops, modelled in part on Starbucks, that would also sell coffee beans for home consumption.
The branding of Trung Nguyên was carefully planned. To counter competition from big multinationals, whether coffee shops or brands such as Nescafé, Mr Vu positioned it as part of a Vietnamese tradition. A Trung Nguyên museum tells the history of coffee-making in the country.
One of Trung Nguyên’s best-known products is kopi luwak or “weasel coffee”, made from coffee berries that have passed through the digestive tract of a civet cat. Marketing this expensive delicacy, which is harvested only in south-east Asia, helps identify Trung Nguyên with Vietnam’s coffee culture.
Combining heritage and modernity is at the heart of