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Trung Nguyên: A living legend

From the January 2019 issue.

Trung Nguyên Legend has launched its first capsule range to align its corporate and sustainable values. Research and Development Director Trinh Ty tells GCR why the company has stepped out of its comfort zone.

For the first time, Vietnamese roasting giant Trung Nguyên Legend has revealed the man behind its research and development division for the past 22 years is Trinh Ty, a childhood friend of Trung Nguyên Group CEO Dang Le Nguyen Vu, or “Chairman Vu” as he is better known. For 11 of those years, Trinh has spent his time researching coffee capsules, a product that years ago seemed so alien-like, a stranger he’d heard of but never dreamed to meet.

For something so initially foreign, Trinh recounts his years of capsule research fondly. “[I’m] not pleased. Elated,” he tells Global Coffee Report.

Since 1996, the name Trung Nguyên Legend has become synonymous with gourmet blends of Vietnamese coffee and coffee houses around the country. Now, for the first time, Vietnam’s leading coffee company has added a series of coffee capsules to its portfolio, the first and only of its kind made in Vietnam.

The new range, called Trung Nguyên Legend Capsules, launched in December 2018 and will be distributed domestically, and available in some of the largest international markets, starting with France and Japan, and followed by the United States, China, and Russia.

For previous products, the Trung Nguyên Legend R&D stage takes a set two years. “But this one took 11,” Trinh says. “There were uncountable internal debates. There were so many times my colleagues asked: ‘Why has it taken so long?’ The day our chairman nodded his head in approval meant the world to me.”  

The capsules come in three different blends: Ottoman, Roman, and Thiền, meaning oriental meditation. The first two take inspirations from and are in honour of Turkish and Italian coffee traditions, or “civilisations”, as Trung Nguyên Legend describes, while Thiền represents the Eastern continents. This brew is designed to be reminiscent of oriental ways of spiritual being, “a reminder for one to be awake and in the moment, to contemplate the quintessence of being, to find peace with the world without, and within”, Trinh says.

That echoes a dualistic concept of “coffee of the senses” and “coffee of the mind”, in which Chairman Vu stirred amongst the press a few years back. He redefined that coffee was more than just a beverage, but a stimulant that transports the drinker into untapped corners of the mind, where they can find inspirations, and their intellectual, and spiritual potentials. Accordingly, the Thiền blend demonstrates its sensory side in the harmony of taste, and its mental side in the harmony of the mind and soul of the drinker.

Twenty-two years of growth has lead to Trung Nguyên Legend’s commitment to revolutionise the coffee industry at home and abroad. In its revitalisation of old products and introduction of new ones, Trung Nguyên Legend sends a message loud and clear: coffee is not just a beverage. It is a magical source of energy that spurs human intellect, creativity, and spiritual awareness.

Trung Nguyên Legend plans to extend that core message into its new capsule range and challenge the current market offering.

In October 2018, the European Union voted to ban single-use plastics across its member countries. In December 2018 at the United Nations summit, World Bank CEO Kristalina Georgieva declared “we are clearly the last generation that can change the course of climate change, but we also the first generation with its consequences”. As such, Trung Nguyên Legend is taking its sustainable commitment seriously.

On 10 December 2018, Trung Nguyên Legend moved to eliminate all plastic straws in its chain of 1000-plus coffee houses across Vietnam. In addition, it is proud to offer what it says are the first and only capsules from Vietnam with packaging that prevents 99 per cent oxidisation and is biodegradable within a mere 18 weeks.

Many single-serve capsules currently on the market are made of aluminum and/or plastic for technical and economic reasons, and are estimated to take anywhere from 150 to 500 years to biodegrade.

Thanks to closed-circuit packaging technology, and years of trials and testing, Trung Nguyên’s Legend Capsules have been designed to keep oxygen residual in each pod under one per cent, thereby helping keep the ground coffee fresh and at their peak for longer – up to a year in fact.

“We looked at other capsule suppliers, you know, the big guys… None had managed to produce capsules that prevent oxidation and left no environmental impact to a satisfying, radical extent,” Trinh says. “So we said: ‘we’ll do it’.”

Trung Nguyên Legend’s move into the capsule market is a strategic decision, and one that sends a strong sustainable message for others to follow.

Trinh searched far and wide for a solution. He tested products from different suppliers until he sealed a deal with reputable names in the industry. Germany company Terracaps supplied the bio-capsules, and Italian roaster manufacturer Brambati provided a complete grinding line including degassing technology for ground coffee. In order to make products of the highest quality and rise tall in the industry, Trung Nguyên Legend needed to partner with the best and the brightest in their fields, or as Trinh explains, to “stand on giants’ shoulders”.

According to Modor Intelligence, the global coffee pod and capsule market was valued at US$14.74 billion in 2017 with an annual growth rate at six to seven per cent.

The market has “ballooned” in recent years and Euromonitor International analysts predict the pod market to register a compound annual growth rate of six per cent by 2023. Trinh is confident the capsule market will soon overtake instant and ground coffee as the leading beverage choice of consumers. Despite its slower growth rate, Euromonitor International says capsules remain the fastest growing category of coffee, and of hot drinks in general.

In Vietnam, more and more urbanites amble in and out of posh coffee houses with trained baristas in aprons, swapping their traditional drips for exotic brews of beans from Kenya, Japan, and Ethiopia. However, there hasn’t been an official estimate for the domestic capsule market. Unofficial statistics of importers suggest that this segment is worth about US$860,000.

Within the next two years, Trung Nguyên Legend aims for 30 per cent penetration into all Vietnamese households of the A-level income bracket, or those earning greater than US$645 per household per month. “Small but certain baby steps,” Trinh says.

But this is not Trung Nguyên Legend’s master plan. With the launch of its Legend Capsules, bundled with the introduction of Trung Nguyên Legend’s own brewing machine Legendera I, the company is aiming at the largest and most sophisticated capsule-consuming markets: France, Japan, the United States, China, and Russia. Prior to meeting with GCR, Trinh took executives of its strategic partners and buyers from some of these countries on factory tours.

“We are looking at some bulk orders and drafting plans for upscaling our production. Things look good,” he says.

Moving first into France and Japan, Trung Nguyên Legend believes its capsule range will be met with enthusiasm by gourmet coffee drinkers with high expectations for flavour and social responsibilities. Once Trung Nguyên Legend wins over the hearts of these two nations, it hopes coffee lovers all over the world will follow suit.

As the Director of Trung Nguyên Legend’s R&D Department, Ty Trinh is more enthused to discuss the company’s milestones in product development. His speech quickens as he speaks of its trajectory in conquering the coffee world. From a raw Robusta bean exporter in November 2014, Trung Nguyên Legend has morphed into a soluble coffee exporter, keeping the world astir with its own domestically manufactured G7 gourmet three-in-one instant coffee sticks and sachets. By introducing the Legend Capsules range, it is again catching the first waves of the world’s latest trends.

“When we launched G7 instant coffee, Nescafé had preceded us by probably 100 years in the segment. Everyone knew about them. We were small, we were from Vietnam. No-one knew about us,” Trinh recalls. “We called our coffee G7, promising ourselves that we would conquer the seven most developed nations.”

Trung Nguyên Legend has proved true to its word. After five years of export, G7 has established its name in the minds and hearts of consumers in targeted markets, hailed as one of the best case studies for business practice throughout Asia, and used as an example of success by the Association of South-East Asian Nations Brand Book. Trinh believes history will be repeated with its capsule range.

“Commercially, it is a product of high quality. Socially, it is a product that exercises our responsibility to the environment, to human livelihood. It is a product not merely of commercial values, but a manifest of our purpose to serve humanity in the best way we know,” Trinh says.

There are other reasons for his optimism. In all of its exploits, Trung Nguyên Legend’s visions have remained bold, its determination unaltered. Over the years, it has stayed strong as an indisputable industry leader in a country that provides the world with the largest export of Robusta beans, about 40 per cent.

The difference is this time, Trinh says, is “we have gone far out of our comfort zone”. This time, it is a whole different ball game, in which Trung Nguyên Legend does not rely on its home ground advantage in any form. Not in the famous traditional brew, nor in the copious beans that its lush land gives. Neither is it simulating foreign creations. It presents its own.

It is, of course, a commercial conquest, one of boldness and of excellent potential. But to the employees at Trung Nguyên Legend, like Trinh, this new addition to the brand portfolio is also personal.

“I used to bring Trung Nguyen coffee abroad as gifts. But the world’s changed. Single-serve pods are time saving, and convenient. That’s what this era demands. Now we can cater to it. I imagine our capsules brewing wonderful cups in kitchens around the globe. It’d be like [us saying]: ‘Hello, this is us, serving you the best of our flavours from our home, Vietnam.’ And that thrills me.”

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