The arrival of coffee giant Starbucks has seen mixed reactions, from disgust to excitement, but will it really change Vietnam’s already-entrenched coffee culture? By Sarah Dallof. Illustration by Johnny Murphy.
Nguyen Phi is pouring refreshing cups of iced Vietnamese coffee in the heat of the afternoon. His dozen or so customers sit in low-slung lawn chairs enjoying views of the chaotic traffic in the roundabout just west of the New World Hotel and of Phi’s newest neighbour and competitor, Starbucks. The two-story glass and wood coffee house sits in stark contrast to Nguyen’s 22-year-old business, which is located in what appears to be a vacant lot.
Starbucks opened its first store in Vietnam in February as part of an ongoing plan to branch into new markets and, some joke, to take over the world. Opening day lines were long, like “a trendy nightclub”, according to one patron. And outside, opinions on this newcomer were divided. Many wondered if the crush of excited customers would put small, family-run operations out of business. Will Goliath and his mermaid-adorned cup crush the Davids of the Vietnamese coffee world? Or will the faithful turn their noses down at the corporate giant? Neither, according to Phi, who believes they don’t operate on the same battlefield.
“We’re two different businesses,” he says. “My customers are here, theirs are there. They don’t mix.”
Le Suan, one of Phi’s customers, agrees. While he now lives in the United States, he grew up in Vietnam and defaults to local coffee joints when he returns to his home country for a visit.
“People here drink their coffee very strong. Starbucks coffee is very light,” he explains.
Cliché as it may sound, coffee is not just coffee but more a way of life in Vietnam. While it’s consumed as a morning pick-me-up in parts of the western world, it’s a social activity that takes place throughout the day here. Venue options, which range from mobile coffee carts to locally-owned cafes to big-but-still-local names like Trung Nguyen, are pretty much limitless. The rest of the world has caught on to the great flavour of the Vietnamese coffee bean and the country is now one of the top coffee exporters in the world.
Starbucks has some equally impressive statistics with 41 years of experience and 3,300 stores in 12 countries in the China and Asia-Pacific region. They also have an ongoing relationship with Vietnamese coffee growers. According to the company, Starbucks already purchases a “notable amount” of high-quality arabica coffee from Vietnam and are working to buy more.
“Starbucks is deeply respectful of Vietnam’s long and distinctive local coffee culture,” John Culver, president of Starbucks China and Asia Pacific, tells AsiaLIFE. “We know coffee is a national pride for many Vietnamese and as such, we look forward to contributing and growing Vietnam’s already vibrant coffee industry.”
The company also pledges to promote responsible business practices and production standards with coffee farming communities. While this is reassuring to some, others remain concerned, especially those who’ve come from areas where large coffee chains have pushed smaller mom-and-pop operations out of business. Expatriate message boards started lighting up as soon as the January announcement of a soon-to-open Starbucks was made.
“Starbucks is the new war face of America. Imperial conquest is addictive. And double roasted,” one commenter quipped.
“Everywhere we look there are cafes, and you can find whatever coffee you prefer. Starbucks is the antithesis of that idea. I’ll continue to get my coffee on the corner,” vowed another.
So who is Starbucks’ target customer in Vietnam? Which patrons are willing to wait in long lines for that tall, grande or venti cup at a price substantially more than what they can get on the street? Tourists and guests of the New World Hotel are among them. Young Vietnamese, seeking to try this internationally-known brand and perhaps hoping to impress others with it, are likely there as well.
“I think many in Vietnam know of Starbucks and want to be fashionable,” says Nguyen Phuong.
She and her friend Nguyen Nga are already part of the Starbucks in-crowd thanks to jobs that often take them outside the country. On those trips, they are regular Starbucks customers who go not for a standard cup of coffee but for the specialty drinks.
“Starbucks has so many things we don’t have here,” Phuong says. “Cappuccino is my favourite.”
“I love the taste,” adds Nga. “As for the price, I accept it.”
The key to all coffee vendors surviving in Ho Chi Minh City may come down to menu offerings. Joints like Starbucks and Coffee Bean and Tea Leaf succeed at higher-priced specialty drinks, while coffee carts focus on their classic offerings at extremely low prices. The face of the country’s coffee culture is changing but back at the busy roundabout, where Cach Mang Thang Tam, Nguyen Trai, and Ly Tu Trong streets meet, Nguyen Phi has no intention of changing his business plan. He’ll keep doing what he does best and his customers, he figures, will keep coming as well.
“No problem. I don’t care,” he says with a dismissive wave of his hand towards Starbucks, as he pours a cup of coffee for the next patron.