Vietnam's Coffee Exports Surge in Volume, Dip in Value: The Push for Deep Processing and Premium Markets – CoffeeTalk

In the first three quarters of the year, Vietnam’s coffee exports reached approximately 1.4 million tonnes, generating $6.54 billion. This marks a 15.4% increase in volume but a 7.3% decline in value compared to the previous year. The average export price decreased to $4,537.3 per tonne, a drop of 19.7%. The primary markets for Vietnamese coffee remain Germany, Italy, and Japan, which hold market shares of 13.1%, 8.2%, and 7.2%, respectively. China has shown significant growth, experiencing a 63.7% increase in export value, indicating potential for expanding Asian markets, particularly for high-value coffee products.

Processed coffee is increasingly viewed as a critical area for boosting export value. In the first nine months, Vietnam exported between 116,000 and 150,000 tonnes of processed coffee, yielding around $1.2 billion—up 1.7% from last year. However, this segment is dominated by a few enterprises; ten companies represent 85.3% of processed coffee export turnover. Foreign-invested firms like Nestlé Vietnam and others play a substantial role in this market share.

Nestlé Vietnam’s CEO, Binu Jacob, highlighted that growth in the coffee sector will not rely on volume alone but on added value. Through the Nescafé Plan, Nestlé has supported farmers with regenerative farming practices, replanting over 100,000 hectares of aging coffee trees while achieving significant reductions in irrigation and chemical usage. Nestlé processes these higher-value products in its factories, including coffee capsules.

Currently, Nestlé buys about 20-25% of Vietnam’s annual coffee output, emerging as the largest coffee buyer in the country. With nearly $580 million invested in its Tri An factory, the company exports products to almost 40 markets. Thai Nhu Hiep, Vicofa’s vice-chairman, points out that despite Vietnam’s production advantages, predominantly selling green coffee beans limits value addition. Deep-processed coffee accounts for only 8-10% of raw materials yet contributes 17-18% to total export value. The sector must focus on deep processing, brand development, and enhanced collaboration among enterprises to improve competitiveness and market positioning.

The processing sector is witnessing new investments, with Trung Nguyen Legend expanding its production with a $77 million project to produce around 7,900 tonnes annually by 2027. Intimex Group plans to increase its instant coffee capacity with a $17.3 million investment. Tata Coffee, a subsidiary of India’s Tata Consumer Products, is also expanding its freeze-dried coffee plant in Binh Duong, representing an initial investment of $65.5 million for 5,000 tonnes annually.

Phuc Sinh Group, a top domestic exporter, is investing in deep processing with seven plants, including a new facility in Lam Dong with over $19.2 million for a 50,000-tonne capacity. The company aims to move beyond being just a low-cost supplier by enhancing value. Additionally, Phuc Sinh is working on domestic market growth through its K Coffee brand, still in its expansion phase.

In addition to deep processing, quality, standard compliance, and traceability are becoming essential for boosting the value of Vietnamese coffee. Le Duc Huy from Simexco Dak Lak emphasized the importance of meeting European market expectations, particularly in adhering to the EU Deforestation Regulation, which is crucial for maintaining access. Vietnam should prioritize the export of green coffee meeting EU criteria and develop special and organic coffee lines for high-end markets.

According to the US Department of Agriculture, global coffee production for the 2026-2027 crop year is projected at 189.7 million bags, a 6% increase, with Brazil leading production. Vietnam’s output is expected to rise to 32.5 million bags, reflecting around 2.5% growth.

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