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Trung Nguyen’s David and Goliath story

From the February 2015 issue.

Trung Nguyen on making global companies rethink their strategies.

Here in Vietnam, our story of G7 coffee is a bit like a fairy tale, and one that – at Trung Nguyen – we like to tell each other often.

It’s the story of a 12-year old company from a developing nation defeating a 100-year old multinational, what we have previously referred to as our own David and Goliath story.

It’s a tale of how a brand from a coffee producing nation has forced major multinationals the world over to rethink their approach to local markets. Most impressively, it’s the story of Vietnam’s first global brand.

Today, we’re proud to say that G7, Trung Nguyen’s instant brand of coffee, is the proudly exclusive coffee of Vietnam Airlines. Regional global conferences including those run by the Asia-Pacific Economic Cooperation (APEC) and The Asia-Europe Meeting (ASEM) serve almost exclusively G7 coffee.

There are currently around 4 million Vietnamese people living oversees in more than 100 countries, and G7 coffee is a popular gift. More than just being loved by the Vietnamese, G7 is conquering Chinese and South-East Asian markets.

In these emerging coffee markets, G7 is well poised to be a leader in this space. Major supermarkets – including Costco, Emart, and the world’s largest retailer Walmart – are featuring G7 as a quality instant coffee choice. G7 has even officially penetrated Dubai, a market known for its preference of luxury products.

According to a survey by Kantar WorldPanel, in 2012 – 2013, among any 10 instant coffee drinkers, five will choose G7. Back at home, G7 continues to be a home-grown local favourite. A Nielsen poll confirmed G7’s market dominance in Vietnam, leading the instant coffee market by accounting for 40 per cent of Vietnam’s market share and 35 per cent of instant coffee sold by volume.

Indeed, the story of how G7 has managed to obtain market dominance has spread the world over, showing that producing countries still have some power in their hands.

The story starts in 2003, before the launch of G7. The Vietnamese instant coffee market had only Nescafé and VinaCafe. Nescafé enjoyed a dominant market share of 60 per cent, while VinaCafe has 38.45 per cent market share, with a few niche brands making up the difference.

Just a year later, the picture changed dramatically. One year after the launch of G7, Trung Nguyen’s instant coffee accounted for an impressive 21.8 per cent market share. Nescafé saw its slice of the pie drop down to 44.05 per cent and VinaCafe had just 28.95 per cent.

G7’s market share only continued to increase, according to figures released by AC Nielsen.

In 2011, G7 started taking the lead, one that it had held onto for three consecutive years with 38 per cent market share. VinaCafe followed by 31 per cent, while Nescafé trailed behind at just 27 per cent.

We at Trung Nguyen like to see G7’s victory as the symbol of the spirit of “Little David”. It’s the spirit of warriors who are not afraid of adversity and willing to overcome challenges. 

Trung Nguyen is driven by a desire to be No. 1, and with our G7 coffee we wanted to offer a product that would be on par, if not better than, major multinationals. 

G7 shows how a coffee producing country like Vietnam can triumph in providing value within our own industry, even with a small fragment of the resources available to multinationals.

A new generation of coffee to new consumers

Trung Nguyen won’t be sitting comfortably on this achievement. We continue to look to improve our products, aiming to appeal to global audiences.

Having achieved victory at home, we’re now preparing to lead the world. We have released a new product called Passiona, an Italian-style instant cappuccino. Advances like these are keeping G7 ahead of the game.

With Asia’s younger customers the most prolific new coffee drinkers, G7 is gaining a strong following among this increasingly affluent generation.

This age group is self-confident on the global scene, and creative. They have an entrepreneurial spirit, are looking to make a difference with their lives, love adventure, are pioneers. They want to enjoy new experiences, appreciate innovation, and are passionate about what awaits them in life.

G7 will continue its journey to win over these consumers in more than 60 countries, as a choice for this new generation of coffee drinkers.

Importantly, G7 will play an important role in boosting Vietnam’s economy. The country will never make enough money from exporting raw materials. Coffee roasting, and the creation of instant coffee, presents the greatest potential for generating real value in the coffee chain.

G7 is helping lift Vietnam out of poverty, bringing our coffee industry to a truly profitable level.

Our goal at Trung Nguyen is to increase the total value of Vietnam’s coffee industry from US$3.6 billion annually to $20 billion within the next 10 – 15 years.

We released Legendee coffee for heads of states, royals, and the intellectual elite.

If this was our gift to them, then G7 is a gift to the new generation, a sign that we can truly conquer the world.

Together, we can realise our dream of creating a truly global Vietnamese brand. GCR

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