STiR coffee and tea magazine

52 STiR coffee and tea / Issue 2, 2019 (April / May) mostly on seasonally hired workers. "It's therefore not a simple matter of increasing planting areas. That will only reinforce the labor shortage problem and solve nothing," Varri asserted. "We prefer the farmers to understand that the global coffee market has changed." Instead, Varri wants farmers to improve their environmental standards, as that "will automatically increase yields and achieve good crop prices." This is where ASEAN could lend a helping hand. "For example, Indonesia planted coffee long before [Thailand] and thus can teach us about setbacks and problems that they've successfully tackled," Varri said. The most important collaboration, she added, would be an information, knowledge and exchange of know-how between ASEAN member countries. That also would include environmental protection practices, for it's not only the quality of our coffees that's important to Varri but also how Thai- land can achieve and implement sustainable farming, she explained. "We have stepped forward to cooperate with ASEAN and don't see our fellow ASEAN members as competitors; but rather as partners and what we can learn from them," Varri said, adding, "We ultimately aim at making ASEAN a global coffee hub, both in terms of production and consumption." Viewed from that perspective Thailand is in an enviable position. The country is lo- cated right smack in the region's geographical center. "We also have modern production plants with well-trained staff in addition to excellent logistical facilities that can handle product imports and exports not only within Asia but indeed to and from any corner of the world," Varri observed. And that, she insisted, makes Thailand "an excellent choice for investors, whether they want to build a plant or just trade." In addition, the country has enacted a favorable import tax structure, with a tax of green beans from other ASEAN countries at around 5% of import value. Unfortunately this does not apply to coffee shipments from outside ASEAN. "There are strict quotas, and if exceeded, the import tax is very high," Varri admitted. "But we're trying to address that [with the government]. After all, Thailand has changed from an exporting country to an importing country, so the relevant regulations have to be adjusted." None of that explains why Thai specialty coffee brands are so thinly represented outside the country. Varri suggests a lack of know-how among local brand owners is foremost to blame. Specialty coffees are invariably produced by small village coopera- tives and – often enough – single-family businesses. "They may know how to market their products in Thailand but lack marketing devel- opment skills internationally," Varri said. These small brand owners aren't familiar with the myriad of regulations enacted in foreign markets, nor do they have the marketing savviness or foreign contacts to pull it off. "If they want to develop an international business, they will need to study the require- ments… and that is easier said than done," Varri said, but added that this would be an area where the expertise of other ASEAN member states such as Indonesia and Vietnam could be tapped. Domestic Production Vs. Consumption 2017-18 (000 60-kilo bags) Country* Production Volume (tons)** Consumption Volume (tons)** Thailand 28,500 82,500 Vietnam 1,770,000 144,000 Indonesia 612,000 282,000 Philippines 13,500 180,000 Laos 28,200 not available All 10 ASEAN member states 2,452,200 688,500 *Across all coffee varieties, including specialty coffees |f Source: International Coffee Organization ASEAN Coffee Bean Production* 2014-17 (000 60-kilo bags) Country** 2014*** 2015*** 2016*** 2017*** change 2016-17 Indonesia 11,418 12,317 11,491 12,000 4.4% Laos 499 511 438 475 8.4% Philippines 193 206 215 200 -6.8% Thailand 785 997 664 500 -24.7% Vietnam 26,500 26,737 25,540 29,500 15.5% *all coffee varieties **no data available for Malaysia and Myanmar Source: Victor Mah, ASEAN Coffee Federation Doi Chaang is among the very few Thai specialty coffee brands that have suc- cessfully established an international footprint, thanks mainly to company co-founder, John Darch. The British national's efforts clearly demonstrate how crucially important it is for local specialty coffee brand owners to have somebody with global marketing know- how at their side if they intend to build up an international presence. The pio- neering brand is currently commercially available in both Canada and the Unit- ed Kingdom. According to Doi Chaang's interna- tional coordinator Khant Gi Mon Thip, Doi Chaang is also trying to expand its domestic retail business as well as franchises for the HORECA (hotel/res- taurant/café) market. The company currently has fran- chises in Malaysia, Cambodia, Singa- pore, Myanmar, and South Korea. "And in March 2019 we expect to conclude negotiations with master franchise holders in Japan, Hong Kong, and Tai- wan," Mon Thip divulged. Furthermore, in January 2019 Doi Chaang sent a green bean shipment to Australia, where the company had previously gained a foothold. "We had lost the connection [with the Australian customer] for a while, but have now re-established it," Mon Thip said. Doi Chaang is currently producing between 1,700 and 2,000 metric tons of arabica per year post-processing. But accord- ing to Mon Thip, the company "has the capacity to increase that to 3,000 to 3,800 tons," giving it the necessary cushion to accommodate its franchis- ing drive. The International Face of Doi Chaang

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