Brewing strategies to bolster Vietnam's coffee industry

Brewing strategies to bolster Vietnam's coffee industry

Stakeholders in the coffee industry should pursue strategic solutions to ensure the sector's sustainability and competitiveness, said academics from The Business School at RMIT University Vietnam.

Read our previous article “Vietnam’s coffee sector faces headwinds in global market”.

The Vietnamese coffee market is at a critical juncture, with rising prices and declining output presenting both challenges and opportunities.

According to RMIT academics Dr Devmali Perera (Lecturer in Finance) and Dr Majo George (Senior Lecturer in Logistics and Supply Chain Management), stakeholders can navigate this volatile environment and position themselves for long-term success by adopting strategic approaches. Farmers, exporters, and investors must stay agile and proactive in their strategies to thrive in the dynamic coffee market.

Adopting sustainable farming practices and quality standards

A top priority is to promote sustainable farming practices and initiatives that focus on environmental conservation. This can help mitigate the adverse effects of climate change on coffee production. 

Colourful coffee beans on a branch Sustainable farming practices can help mitigate the adverse effects of climate change on coffee production. (Photo: Unsplash)

According to Dr Majo George, public-private partnerships such as the Production, Protection, and Inclusion (PPI Compact) program in Dak Lak help create sustainable models and improve farmer resilience. These partnerships can also facilitate the adoption of agroforestry and other eco-friendly practices that enhance long-term sustainability.

There is a growing emphasis on exporting specialty and organic coffees, which are gaining popularity globally. It is also important to implement strict quality standards and certification processes related to coffee processing.

Dr Devmali Perera said, “Encouraging certifications like Fair Trade, Organic, and Rainforest Alliance helps producers access premium markets and achieve better prices.

“These certifications not only improve marketability but also promote sustainable and ethical farming practices, aligning with global trends towards more responsible consumption.”

Investing in capacity building and research and development

Training programs for farmers on best agricultural practices, quality management, and certification processes can empower them to produce high-quality coffee that meets international standards.

“The training programs are essential to equip farmers with the knowledge and skills needed to enhance both the yield and quality of their coffee crops. This is particularly important given the challenges in the Vietnamese coffee supply chain, where maintaining bean quality during production is a significant issue,” Dr Perera said.

The government can also seek to attract more foreign direct investments to introduce advanced technologies from other countries. This can help modernise production processes, improve efficiency, and enhance the overall quality of Vietnamese coffee.

“Moreover, the government can collaborate with local and international universities to conduct research on sustainable farming practices and new technologies to support this industry,” Dr Perera said.

Roasted coffee beans spill from a bag Maintaining bean quality during production is a significant issue for the Vietnamese coffee industry. (Photo: Unsplash)

Dr George advocates for the use of real-time market information technology, predictive weather patterns analytics, and digital platforms for direct farmer-to-market transactions.

“These technologies can give farmers better insights and tools to manage their crops and navigate market demands,” he said.

Government support for infrastructure, finance, and market access

Investing in modern infrastructure for roads, storage facilities, and processing plants is crucial to improve post-harvest handling and reduce quality losses. This can help streamline the supply chain and enhance the efficiency of coffee transportation and storage.

Government support in the form of financial assistance and subsidies can reduce production costs for coffee farmers. In particular, subsidies for fertilisers and advanced farming equipment can make it more affordable for farmers to maintain and improve their plantations.

Export promotion is another critical area of focus. Policies aimed at promoting Vietnamese coffee in international markets, including participation in global trade fairs and leveraging trade agreements like the EU-Vietnam Free Trade Agreement, can enhance market access for Vietnamese coffee exports.

“This industry must continue to innovate and adapt to mitigate risks. The resilience and adaptability demonstrated by Vietnamese coffee producers, coupled with strong government support and innovative practices, will be the key to overcoming the current difficulties and ensuring long-term success in the global coffee market,” Dr Perera concluded.

Story: Ngoc Hoang

07 August 2024

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