STiR coffee and tea magazine

Volume 4, Number 6

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STiR tea & coffee industry international 51 Intercropping with fruit trees, pep- percorns, macadamia nuts, and tea has been suggested. Some coffee farmers are pulling up their old coffee trees and planting market vegetables, strawber- ries, baby cauliflower or mushrooms. This is especially true on the outskirts of Dalat City, Lam Dong, where, when leaving the city on Highway 20, one can see many hundreds of newly-built green- houses dedicated to raising high value crops. One venture capitalist exclaimed, "Tea will bring in $10,000-15,000 per hectare, coffee, $25,000 per hectare; spe- cialty vegetables, $200,000; strawberries, $300,000; orchids, $500,000-$700,000. Where would you put your money? " The Quality Conundrum Looking at Vietnam's coffee industry one discovers an inconvenient truth: "You can't make a silk purse out of a sow's ear." Although Vietnam robusta is on the lower end of the quality continuum, according to the siperati, it has found its niche, its commercial utility, even its fans. It's the go-to bean for soluble coffee. Should the robusta establishment aspire to higher levels of quality, hoping to be awarded with a substantial return on investment? Or, should producers set more realistic expecta- tions, aspiring instead toward sustainability on the farm, good processing in the factory and careful sorting and grading at the warehouse? There is vigorous market sector that finds mediocre robusta beans perfect for the business model? Is cheap, bitter coffee a niche market? Is Vietnam ripe for Investment? The Vietnamese coffee industry is in transition. Coffee prices are low and erratic. Problems have been recognized and solutions mooted, but the fix (not a single fix) is far from complete. The arabica sector is tiny, but there is potential if it gets lots of nur- turing. Without recognition of a Vietnamese geographic origin, prices, at the top end may not be sufficiently rewarding. No farmer wishes his or her coffee to be blended into anonymity. So, for Vietnam, the specialty coffee niche must still be massaged into being. It is in incubation. The most exciting place to invest is the retail sector, where the margins are substan- tial and the drinks luscious. If one takes a good look at the café sector, one sees great and growing energy, but homework must be done, for investing in Vietnam has its downsides: government bureau- cracy, official corruption, lack of trans- parency, etc. Foreign investors should al- ways approach the market with the help of a local facilitator or "fixer." In June, STiR Tea & Coffee contributing editor Frank Miller traveled the length of Viet- nam to file this report on a vibrant, fast-growing coffee industry. He wishes to thank the staff at "Care to Help" for their cooperation. This non- profit foundation provides potable water systems to tribal minority villages previously without. Learn more: www.caretohelp.org. Read about Vietnam's cafe culture in the February 2016 issue of STiR Tea & Coffee Industry International Thuan, left, with husband Thuy and daughter. The couple owns T&T Coffee Di Linh District near Lam Dong. Wood fired coffee dryers at T&T Coffee

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