Vietnam Coffee Market Size & Share Analysis - Growth Trends And Forecast (2025 - 2030)

Vietnam Coffee Market Trends and Insights

Expansion of Café Chains & Franchise Models

Vietnam's café chains are shifting their focus from mere coffee sales to creating immersive retail experiences. Highlands Coffee, with 855 stores, boasted a 13% revenue growth in 2024. Meanwhile, Phúc Long made headlines by adding 79 new locations, bringing its total to 237 in 2024. Trung Nguyên Legend is making waves internationally, eyeing 1,000 global stores, with 130 set for China by 2024, showcasing the power of the franchise model. Vietnamese brands are not just stopping at home; they're making strategic moves into billion-dollar markets like the UAE, India, and Qatar. This is in line with the global franchising industry's bullish growth projections. Such strategies not only anchor Vietnamese coffee culture in upscale international arenas but also bolster brand recognition, aiding export endeavors. The triumph of local chains over global giants is evident. Starbucks, with its 127 outlets, pales in comparison to Highlands' 855, underscoring the edge of cultural resonance and strategic pricing.

Product Innovation with Functional Blends

Vietnamese coffee companies are innovating by turning traditional waste into premium exports, marking a shift from mere commodity production. Việt Thảo Nhiên has made waves by exporting coffee husk tea to Japan, a move that underscores the potential of the circular economy. By repurposing discarded Arabica coffee husks, they've crafted a health-benefiting beverage. With a decade of research backing their patented extraction technology, the company eyes expansions into South Korea and Europe. Nestlé's NESCAFÉ Plan, on the other hand, has empowered over 21,000 farmers with high-yield coffee varieties and digital tools, boosting incomes by 30-150% and championing regenerative practices. Meanwhile, Sucafina Instant forecasts a 59% rise in per capita spending on instant coffee by 2029, thanks to its rich flavors and health-focused offerings appealing to both busy professionals and traditionalists. Such strides elevate Vietnamese coffee from basic exports to sought-after, premium products on the global stage.

Sustainability & Traceability

Vietnam's coffee sector grapples with a shifting regulatory landscape, emphasizing the need for robust traceability systems. This shift presents both hurdles in compliance and avenues for competitive edge. Starting December 2024, the EU Deforestation Regulation mandates that Vietnamese exporters demonstrate their coffee is sourced from non-deforested regions. This regulation holds significant weight, given that the EU market constitutes 41% of Vietnam's coffee exports. In response, Vietnam's Ministry of Agriculture is crafting national mapping systems to aid in compliance. The regulation's 12-month extension offers businesses a crucial window for adaptation. Currently, only 25-30% of Vietnamese coffee aligns with sustainability benchmarks. However, certified farms are reaping the benefits, showcasing enhanced yields and income. Leading the charge in sustainability is Lâm Đồng province, boasting over 86,000 hectares either organically certified or meeting export criteria. Cooperatives, such as Bechamp Đắk Nông, are securing organic certifications tailored for global markets, with a notable focus on South Korea. This push towards sustainability is carving a divide in the market: compliant producers are tapping into premium markets, while their non-compliant counterparts face export hurdles. This dynamic could pave the way for a more consolidated industry, favoring larger, tech-savvy operations.

Growth of Specialty & Premium Coffee Culture

Vietnam's coffee culture is evolving, with consumers increasingly gravitating towards specialty products and premium experiences. This shift is reshaping both consumption habits and market dynamics. Per capita coffee consumption is on the rise. In 2024, the specialty coffee segment, holding a 12.3% market share, is the fastest-growing, expanding at a 7.32% CAGR. This growth is largely fueled by urban consumers prioritizing traceability and environmental responsibility. Vietnamese coffee chains are carving out a niche, competing effectively against global brands. By offering culturally resonant experiences at reasonable prices, Highlands Coffee boasts sales exceeding VND 3.5 billion in 2024, while The Coffee House is on a rapid trajectory, expanding to over 100 outlets. Digital sales are making waves, with online transactions accounting for 35% of Phúc Long's revenue. This trend underscores the digital engagement of Gen Z and Millennials, pivotal in propelling the F&B sector's growth. The premiumization trend isn't confined to domestic shores. In a notable 2024 milestone, Vietnamese Robusta prices eclipsed those of Arabica in export markets. This shift not only underscores enhancements in quality but also signals a growing market acknowledgment, bolstering strategies aimed at higher-value positioning.

Smallholder Fragmentation

In Vietnam's coffee sector, smallholder fragmentation poses significant challenges. A staggering 91% of farmers cultivate plots smaller than 2 hectares, leading to inefficiencies that hinder scalability and compliance. Data from Vietnam's General Statistics Office reveals a rise in operational farms, from 24.08 thousand in 2022 to approximately 24.94 thousand in 2023. This fragmentation issue is magnified by the EU's Deforestation Regulation. Individual farmers find it challenging to gather essential traceability data and shoulder compliance costs, a burden more easily managed by larger operations. Furthermore, many farmers depend on middlemen for inputs and financing, which complicates the supply chain and diminishes their market access and price negotiation power. While Vietnam boasted a coffee cultivation area of 720,000 hectares in 2023, projections indicate a reduction to 650,000 hectares by 2030. This shift, driven by government initiatives, aims to concentrate production on higher-standard varieties. The U.S. Department of Agriculture reports targets of 80-90% of newly cultivated areas adopting premium cultivars. Given these challenges, there's a pressing need for cooperative models and technology platforms to unify smallholder production and ensure traceability. However, the uptake of such solutions varies across Vietnam's diverse coffee-growing regions.

Supply Chain Disruptions

Vietnam's coffee supply chain faces ongoing disruptions, causing fluctuations in export performance and domestic market stability, hindering growth. Geopolitical tensions and container shortages have disrupted export logistics, reducing export volume from October 2024 to January 2025, despite higher export values driven by price premiums. According to the USDA Foreign Agricultural Service, Vietnam's 2023/24 coffee exports totaled 25 million 60-kilogram bags, down from 28.04 million bags the previous year. Climate-related issues, including earlier dry seasons and low reservoir levels, reduced the 2023-2024 crop to a four-year low. Labor shortages and rising fertilizer and labor costs further strain smallholder farmers, pushing some to switch to more profitable crops like durian, reducing coffee output and creating supply uncertainties for domestic processors and exports. Post-harvest inefficiencies, such as inadequate infrastructure and limited advanced drying and storage facilities, lead to quality variations, restricting access to premium markets. These disruptions perpetuate supply uncertainty and price volatility, complicating long-term planning for producers and buyers.

Segment Analysis

By Product Type: Instant Coffee Dominance Faces RTD Challenge

In 2024, Instant Coffee commands a dominant 37.65% market share, underscoring Vietnam's prowess in catering to convenience-driven consumers and its robust export reach, spanning over 100 countries, with notable brands like G7 and Trung Nguyên. The segment enjoys the advantage of well-established distribution networks and a strong consumer base, especially in rural areas, where adoption stands at 62%, slightly trailing the 72% in urban locales. Meanwhile, the Ready-to-Drink segment is poised as the market's growth engine, boasting a 7.91% CAGR through 2030, fueled by urbanization and shifting preferences among the youth. Ground Coffee and Whole Bean cater to niche markets prioritizing quality and brewing rituals, whereas Coffee Pods and Capsules face challenges in Vietnam, hindered by limited equipment adoption and price sensitivity.

In 2023, Vietnam's instant coffee production hit 171,400 metric tons, as reported by the General Statistics Office of Vietnam, with forecasts suggesting a rise in per capita spending^{[3]Source: General Statistics Office of Vietnam, "Statistical yearbook of Vietnam 2023", www.gso.gov.vn}. The segment's shift towards functional blends and health-centric formulations caters to a spectrum of consumers: from busy professionals valuing convenience to traditionalists who savor robust flavors. Westrock Coffee's foray into Ready-to-Drink facilities, highlighted by a new plant in Conway, Arkansas, underscores the global acknowledgment of RTD's growth trajectory and Vietnam's pivotal position in worldwide supply chains. Moreover, the competitive landscape increasingly favors firms with cohesive supply chains and a knack for innovation. As product differentiation gains prominence in the mature instant coffee arena, the RTD sector emphasizes the need for advanced cold-chain logistics and innovative packaging solutions.

Note: Segment shares of all individual segments available upon report purchase

By Coffee Type: Robusta Supremacy Reinforces Vietnam's Global Position

In 2024, Robusta coffee holds 81.70% of the market, and Arabica is set to grow at a 6.92% CAGR through 2030, highlighting Vietnam's global coffee dominance. As the top Robusta producer, Vietnam supplies 40% of the global market, supported by favorable Central Highlands conditions, per the World Trade Organization. Improved Robusta quality has driven price premiums, with domestic prices surpassing Arabica for the first time in 2024, reaching VND 131,000 per kilogram. The smaller Arabica segment targets premium export markets and specialty niches like organic and single-origin coffee. Other coffee varieties remain negligible, reflecting Vietnam's focus on Robusta.

Vietnam cultivates Robusta across 716,600 to 730,000 hectares, mainly in Đắk Lắk, Lâm Đồng, Đắk Nông, Gia Lai, and Kon Tum. The Ministry of Agriculture's replanting program (2021-2025) aims to replant 107,000 hectares, increase productivity to 3.5 tons per hectare, and boost incomes by 1.5-2 times. Global dynamics favor Vietnamese Robusta, as Brazil's reduced production and climate issues create supply gaps. This supports Robusta's growth and positions Vietnam's export revenue to exceed USD 7.5 billion by 2025.

By Category: Conventional Dominance Yields to Specialty Growth

In 2024, the Conventional coffee category holds an 87.70% market share, driven by established farming practices and competitive pricing in domestic and export markets. The Specialty segment, including organic and single-origin varieties, is growing at a 7.32% CAGR through 2030, fueled by premium demand and regulatory compliance. This growth highlights a shift where quality-focused producers benefit from sustainability certifications and traceability. Conventional producers face challenges from the EU's Deforestation Regulation and rising demand for eco-friendly products, creating a divide between compliant and non-compliant producers.

Specialty coffee adoption varies across Vietnam, with Lâm Đồng province leading with over 86,000 hectares meeting sustainability standards. Currently, 25-30% of Vietnamese coffee meets these benchmarks, with certified farms achieving higher yields and incomes. The National Agricultural Extension Center promotes sustainable practices through training, while cooperatives like Bechamp Đắk Nông secure organic certifications for export markets such as South Korea. This transition reflects Vietnam's strategy to move from commodity production to value-added exports, as specialty coffee commands premium prices globally.

By Distribution Channel: Off-trade Leadership Meets On-trade Dynamism

In 2024, off-trade channels, including supermarkets, hypermarkets, convenience stores, specialty stores, and online platforms, dominate with a 67.24% market share in Vietnam. This reflects a strong retail infrastructure and consumer preference for home-consumed packaged coffee. On-trade channels, however, show a 7.11% CAGR through 2030, driven by café culture, urbanization, and younger demographics' experiential consumption preferences. While traditional retail leads in volume, foodservice channels capture growth and premium positioning opportunities.

Online retail drives off-trade growth, contributing 35% of Phúc Long's revenue and highlighting digital adoption among Gen Z and Millennials. E-commerce fosters direct-to-consumer ties and premium visibility, while supermarkets and hypermarkets cater to the mass market with instant coffee and packaged goods. Specialty stores target niche markets with quality and brewing equipment, and convenience stores capture impulse buys and ready-to-drink items. On-trade benefits from café chain expansion: Highlands Coffee operates 855 stores, Phúc Long 237 outlets, and Starbucks 127 locations. Distribution channel evolution reflects consumer shifts toward premium experiences, offering opportunities for integrated retail and foodservice players.

Geography Analysis

Vietnam's coffee market showcases distinct regional patterns that not only enhance production efficiency but also shape market dynamics across its varied coffee-growing areas. Dominating the landscape, the Central Highlands boasts around 716,600 to 730,000 hectares of cultivated land, spearheaded by Đắk Lắk and Lâm Đồng provinces, especially after recent administrative changes. Price fluctuations across regions highlight quality disparities and market accessibility, with Dak Lak notably securing premium prices in February 2025. This geographic clustering has paved the way for robust processing infrastructures, drawing significant investments. Noteworthy facilities include Nestlé's Trị An in Đồng Nai, Trung Nguyên's plant in Buôn Ma Thuột, and Highlands Coffee's roasting hub in Bà Rịa-Vũng Tàu.

While northern regions of Vietnam produce smaller coffee volumes, they play a pivotal role in catering to domestic markets, especially in urban centers like Hanoi. Here, the burgeoning café culture propels growth in on-trade channels. The Mekong Delta, though producing less coffee than the Central Highlands, boasts a well-established agricultural infrastructure. This network efficiently channels coffee distribution to Ho Chi Minh City and southern markets. Adoption of sustainability practices varies widely across regions. Lâm Đồng stands out, aligning with export standards, whereas Gia Lai grapples with challenges. Nomadic farming practices in Gia Lai hinder compliance with the EU Deforestation Regulation, despite coffee exports constituting a significant portion of the province's revenue. Highlighting the strategic importance of Lâm Đồng in Vietnam's coffee evolution, the government has earmarked 36,000 of the 107,000 hectares slated for replanting by 2025, aiming for quality enhancements across all regions.