Coffee may be produced across tropical geographies but the world’s best-known countries associated with the bean are located far from the tropics. Italy has established itself as the home of espresso, while chains such as Starbucks export the American coffee shop lifestyle, yet barely any coffee is grown in both countries.

Vietnamese coffee producer Trung Nguyen Group is now trying to break free from the status quo that relegates coffee producers in these tropical countries to anonymous suppliers of coffee beans, leaving the most profitable segments of the market in the hands of Western companies. 


It has developed a wide array of coffee brands and products that range from instant to rare (and controversial, such as ‘weasel’ coffee), and already exports them to dozens of countries around the globe. Additionally, it has opened dozens of cafes in its home country. 

Something stirring

With the Chinese and US markets at the top of its list, Trung Nguyen is doubling down efforts to grow its brands beyond Vietnam, as part of its ambitions for the whole country. “It’s not just about the coffee. We want to build innovation around the coffee in Vietnam,” says Le Hoang Diep Thao, Trung Nguyen co-founder and head of Trung Nguyen International (TNI). “When we build a brand, we can inspire the country. With a brand, we can grow the whole value chain and help local businesses to develop.”

Coffee production in Vietnam received a boost in the late 1990s when the country opened up to the market economy and private companies revived its long-subdued potential for coffee crops. In a few years, Vietnam became the world’s second largest producer of coffee after Brazil – although mostly focusing on lower quality beans such as robusta, which is largely used for instant coffee. 

Trung Nguyen emerged at the forefront of the third wave of development of the country’s coffee industry (the first two tracing back to the colonial era, and the end of the Vietnam War) after it unfolded in the mid-1990s. The company started off with coffee crops in the Central Highlands region, launched several best-selling instant coffee brands such as G7 and King Coffee – processed locally in its own production sites alongside premium brands such as Legend – and finally entered the coffee chain market. It launched about 60 shops under the Trung Nguyen brand, and the more exclusive Legend brand, thus positioning itself along the whole value chain of coffee – from crop to production and distribution in its outlets.

TNI, the group’s division devoted to the internationalisation of the brand and led by Ms Thao, is now broadening the ambitions of the group beyond the domestic market.


“We are already exporting our coffee to 61 countries. Now we are in the phase of investing in some priority markets with our coffee concept – not just the packaged product, but the whole coffee experience offered by our cafes. In this regard, our priority markets are China, the US and South Korea,” says Ms Thao.

A taste for coffee

Coffee consumption in east and south-east Asia is growing at a steady rate as households gain middle-income status and travel to coffee drinking-regions such as Europe or the US. Euromonitor International estimates that in China alone, consumption in Asia will grow at 18% per year between 2014 and 2019. 

Western coffee brands have kept a close eye on these developments in the Chinese market, although only a few of them are currently in a position to capitalise on the opportunity. Starbucks is certainly one of them. The US coffee behemoth opened its first outlet in China in 1999, but only recently started opening up shops, which it is doing at a rapid pace. With its 3300 cafes across the country, Starbucks already dominates the Chinese coffee shop market and is now doubling efforts to remain ahead of the curve, planning the opening of another 3000 shops through to 2022, the Seattle-based company announced in May.

Trung Nguyen is now taking its first steps to close the huge gap with its Western competitors in the Chinese market. On a global level, the company launched a new coffee chain under the King Coffee brand in July, and plans to have 1000 stores up and running in the medium term, which it hopes will help it fight off increasing competition in its home market, where it already owns dozens of stores. It is also using the new brand to further extend into priority foreign markets, with China at the top of the list. A first tranche of 100 King Coffee stores is expected to be opened, both in Vietnam as well as China and other foreign markets, by the end of 2018.

A bitter aftertaste

However, Trung Nguyen’s ambitions remain somewhat constrained by an ongoing power struggle between its two co-owners. Founder and chairman Dang Le Nguyen Vu dismissed Ms Thao, his estranged wife, in 2015 over allegations she was damaging the company. Ms Thao rejected those allegations and fought her way back into the firm’s driving seat through a series of tribunals. 

Today, both co-founders retain management responsibilities across the group’s brands, and their ongoing feud is making its governance somewhat tricky. On the one hand, Mr Vu has repeatedly tried to sideline his former spouse; on the other, Ms Thao has exercised her governance rights to obstruct her former husband's decisions. 

The two even seem to be willing to confront each other outside tribunals. In the Chinese market, the Trung Nguyen Legend Corporation (under Mr Vu) closed a major distribution deal with Shanghai Qinzhou Trade to distribute instant G7 products in eastern China, targeting revenues of $1.6bn. At the same time, Ms Thao sealed an agreement with another Chinese distributor, Hello Oyster (LaoJiao Group), to distribute instant King Coffee, the brand she launched in 2016. As a result, the group’s two brands are now competing with each other in the Chinese market.

As the legal battles continue, Mr Vu has come out of a five-year isolation – during which time he was barely seen in public and largely delegated corporate decision making to his inner circle – to again clash with his estranged wife, who still owns 30% of the holding group. Local media branded the fight the “divorce of the century”. While their story may be juicy enough to sell newspapers, it could threaten their quest to sell their coffee – as well as jeopardise Trung Nguyen's ambitions to extend its global reach.