2 out of 5 Vietnamese people spend 70,000 VND for a cup of “brand-name” coffee: 2022 will be a turbulent year with The Coffee House, Amazon Café, Chuk Chuk, PhinDeli…08/02/2023
If “old people” have to follow the user trend all the time, then “new people” are not very smooth….
iPOS.vn – a technology management solution provider for the F&B industry – recently published a report on the food business market in Vietnam in 2022, based on data from market research units. and surveyed nearly 3,000 restaurants/cafés and nearly 4,000 diners nationwide.
The report shows the willingness to spend on eating out of Vietnamese people. In which, 58% of diners are willing to spend from 40,000 VND for each coffee or drink. In which, 44% are willing to spend from 41,000 – 70,000 VND (spending at mid-range beverage brands such as Highlands Coffee, Phuc Long, The Coffee House…) and 14% are willing to spend from 70,000 VND (spending level). at high-end beverage brands such as Starbucks, Runam Bistro, etc.).
Correspondingly, the revenue scale of Vietnam’s F&B industry in 2022 is estimated at nearly VND 610,000 billion, with about 338,600 restaurants/café. That’s a big piece of cake, but the business story of the existing brands last year seems quite bleak. Because, 2022 is not only the first year after Covid-19 with changes in user behavior and habits; but also accompanied by a series of macroeconomic fluctuations.
“Old people” have to follow the trend all the time
In retrospect, at the beginning of 2022 when the market entered the new normal, a lot of big plans were put in place.
For example, The Coffee House after a drastic move to close the Signature store on Pham Ngoc Thach Street (District 3, HCMC), announced the new model is TCH Now kiosk and will be replicated within the year. According to the representative, TCH Now at that time will be suitable for new and lean consumer behavior to quickly get coverage.
In fact, consumer behavior changed faster than forecast, TCH Now from the second quarter of 2022 was no longer mentioned. On the contrary, realizing that the connection needs of users are back and somewhat “intense”, The Coffee House reopened the Signature store in District 7. In parallel, instead of expanding Kios as planned at the beginning of the year, The Coffee House reopened the Signature store in District 7. The Coffee House focuses on refreshing the menu to bring customers back to the habit of eating at the shop.
“After 2 years of going through the Covid-19 storm, fortunately The Coffee House is still alive and the ‘boat’ is still there, there are still people, there are still a few resources, why not make a new one. Moreover, after Covid-19, we feel the consumer’s need to connect is quite intense”, The Coffee House CEO shared at the recent Signature store opening event.
The “newbie” is still busy learning, and the other party decides to stop
If the “old people” have to follow the user trend all the time, the “new people” are not so smooth. In particular, the big Thai brand – Amazon Café – does not seem to be successful in Vietnam.
With a strong backing and foundation from its partner Central Vietnam (with BigC GO system!…), Amazon Café chooses Vietnam as the 10th country for its Asian expansion strategy with the ambition to soon cover the whole country.
However, until the end of 2022 (i.e. 2 years of joining), Amazon Café only reached 15 stores in the South (11 in Ho Chi Minh City and 4 neighboring provinces), even leaving the North plan open up.
The brand representative shared: “As everyone knows, the F&B market in Vietnam is quite difficult to do, so we are still in the stage of opening new stores while continuing to research to better understand the behavior of the F&B brand. Vietnamese consumption. Our plan to open the chain will depend on the specific needs of the market.”
Not as lucky as Amazon Café, another “rookie” owner, Chuk Coffee & Tea, chose to stop the game. Launched with a rather methodical plan after 20 years of incubation, Kido Group of Chinese businessman – Mr. Tran Le Nguyen – by the end of 2022 has divested all of its capital from the tea and coffee chain after just over 1 year of investment. Not only because it is necessary to “tighten the belt”, recover capital… Chuk Coffee & Tea is known to be no longer effective when the user behavior is not really clear for Kido to continue allocating resources.
Recall, the Chuk Chuk brand – the project said to be Tran Le Nguyen’s “20-year cherished Starbucks Vietnam dream” – was officially launched in June 2021. Initially, the operating company was TTV with a total investment of 100 billion VND, in which Kido participated in 61% of the capital to take control and Ms. Tran Tuyet Van (Daughter of Mr. Tran Le Nguyen) was in charge. position of General Director.
Chuk Chuk sells three main products: ice cream, tea, and coffee. Not only opening in the traditional store model, Chuk Chuk oriented to develop more kiosk and trolley models. At the time of launching Chuk Chuk, Kido wanted to make Chuk Chuk a national brand in the F&B market with the ambition of not only covering the country but also developing a franchise chain according to international standards.
Mr. Nguyen even emphasized that Chuk Chuk will be profitable in the first year. In 2023, it is expected that over 100 points of sale, the revenue is estimated at more than 1,200 billion VND, by 2025, there will be about 1,000 stores with a revenue of over 7,800 billion VND.
However, in business no one can predict anything, in July 2022 Chuk Chuk silently changed its name to Chuk Coffee & Tea, before approving the shareholders’ opinion, they will divest all capital at TTV at the end of the year.
Other popular brands like Highlands, PhinDeli also close 2022 with many levels
Accepting the invitation to join Nova Group’s ecosystem at the end of 2021 (previously refusing Kido’s offer), PhinDeli thought that 2022 would be the year of “makeover”. With strong potential, Nova Consumer has promised to bring PhinDeli Café to many prime locations in Ho Chi Minh City and projects developed by Novaland such as Aqua City (Bien Hoa, Dong Nai), Nova Hills Mui Ne Resort & Villas… Besides the domestic market, PhinDeli Café will also gradually develop the international market. Up to now, the fluctuations in Nova are dragging PhinDeli down with the restructuring.
It is known that the PhinDeli brand of founder Pham Dinh Nguyen is famous for the take-away segment. In the previous period, PhinDeli’s operation was not impressive with revenue of approximately 20 billion dong per year and loss per year.
As for Highlands, business is still stable with the mid-range segment, the brand also experienced a year full of “scandals” after the news of price increase, and at the end of the year, the plan to sell capital was leaked.
According to a Reuters source, Jollibee Foods Corp (JFC.PS) intends to sell 10% to 15% of the shares it owns in Highlands Coffee to an investor. The coffee chain’s valuation is expected to fall around $800 million. The share transfer, if successful, will pave the way for the Highlands’s IPO, something Jollibee has been pondering for years.
Highlands Coffee is a chain of coffee and fast food shops founded by David Thai in 2009. Mr. David Thai was born in 1972, followed his family to the US to settle in 1979 before returning to Vietnam in 1996. From the original two stores, Highlands gradually expanded to many branches and established its name.
While doing well, in 2012, David Thai suddenly sold nearly half of the business segment of Viet Thai International Company (VTI) – the owner of Highlands – to Jollibee Foods. Accordingly, the Philippine Group spent $25 million to acquire 49% of VTI’s Vietnam business and 60% of VTI’s Hong Kong business, which is owned by this businessman.
In the higher segment, Starbucks also plans its own soon
In 2023, the company will open its 100th store – marking the 10th anniversary of the American coffee brand opening its first store in Vietnam in February 2013 (at Phu Dong intersection, district 1, HCMC).
“After 4 waves of the Covid-19 epidemic, the FMCG industry has had constant fluctuations. With Starbucks, 2023 marks 10 years of presence in Vietnam, the company determines that the goal in the “new normal” phase is to continue to find the right solution, increase the number of customers, and optimize costs. , the representative said at the recent review.
By the end of 2022, Starbucks had 87 stores, concentrated in big cities such as Hanoi, Ho Chi Minh City, Hung Yen, Hai Phong, Da Nang, Hoi An (Quang Nam), Nha Trang (Khanh Hoa). , Binh Duong. In which, Ho Chi Minh City alone has 50 stores. In parallel, Starbucks Vietnam last year also promoted online payment activities through e-wallets.
In the “new normal” period, Starbucks Vietnam’s orientation, according to the representative, is to open stores of moderate size or serve customers who just buy it. Starbucks Vietnam’s model is currently geared towards leanness, seeking more space in new urban areas, high-rise buildings or local communities to bring the Starbucks experience to more customers.
Sharing about Starbucks’ goals in Vietnam in 2023 in particular and in the long-term, Ms. Marques said: “We will continue to open more stores and will look for business opportunities in new places in addition to the existing ones. the city has arrived.”
Regarding the market, in 2023, according to iPOS.vn, the air is falling according to the general economic situation, this trend is expected to continue. In that context, individual investors are tending to be cautious and defensive, new opening plans are being postponed to listen to the market more.