This past April 2015, Trung Nguyen – Vietnam’s No.1 Roaster ¬– has made history with its G7 instant Cappuccino set to hit the shelves of Walmart in Chile.
It’s been 12 years since Trung Nguyen, Vietnam’s top coffee roaster, dared take on foreign giants who had for too long dominated the instant coffee segment. When Trung Nguyen released its G7 coffee, it gave power to the consumer by holding a blind taste test in Ho Chi Minh City at the Reunification Palace. It was an important moment in history, as one person after another expressed their preference for G7.
Since then, Trung Nguyen’s G7 coffee has quickly won market share in Vietnam. It quickly expanded overseas, launching an instant coffee war with its Western rivals. The rise of G7 coffee – today distributed in more than 60 countries around the world – proves that a coffee growing nation can play in the instant coffee market.
The move from selling a raw product to a roasted one can help lift a country out of poverty, and better spread the wealth among producing and consuming nations.
In 2003, Trung Nguyen was just a small coffee shop of several square metres, with a few workers and a small production line. Chairman Dang Le Nguyen Vu didn’t let the scale of the operation stop him from having big dreams, of not only his own company’s success, but indeed of lifting the position of Vietnam as a whole. Hence the name of the coffee, G7, referring to the group of seven major economic powerhouses that meet under the auspices of the International Monetary Fund.
Vu was looking to overcome what he saw as a paradox in the coffee industry.
Vietnam is the world’s second largest coffee exporter and top exporter of Robusta. Yet despite all this volume, the country was only reaping a fraction of the share of profits from the final coffee sold, compared to international corporations.
Vu saw that the only way to counteract this paradox was to enter the roasted coffee market. Even more ambitious, he eyed the advanced instant coffee market as a major step towards national prosperity.
Although Vu’s team shared his dream and vision, few had the confidence that a small company from a coffee growing nation could take on the world.
Vu was often told to leave the vision behind, and instead work on a safer path. This lack of confidence only inspired Vu to make his dreams of international success a reality, as he continued to boast about a vision for an international company few believed he could create.
With the world’s attention on a “dare to think big” leader, Vu led his team to unveil its G7 instant coffee in 2003. The marketing team engaged Vietnamese consumers through on-the-street marketing activities, such as the now famous blind street testing at Reunification Palace.
Vu has said of his ambitions: “If you have the desire to succeed and a belief in yourself, then you’ve already achieved 50 per cent of that success. The remaining 50 per cent depends on what you accumulate on the road of life.”
It was this belief that helped G7 win an overwhelming 89 per cent of blind taste tests during that first trail. This unexpected victory paved the way for the rise of G7 instant coffee in Vietnam in terms of market share, sales and production.
Following this success in the domestic market, G7 has made incredible leaps abroad. G7 has helped put Vietnam on the map as a major instant coffee player, as it’s currently being exported to 60 countries across the planet, including competitive markets such as the United States, United Kingdom, Germany, Japan, Korea, China, Australia, Singapore, Dubai, and many more.
G7 has become a case study for research and marketing work in both Vietnam and around the globe. Major magazines including, The Financial Times, have studied how a company from what has been considered a poor, developing nation could reach this level of success. Today, G7 is served at major international events such as the World Economic Forum, APEC Summits, and more. Trung Nguyen coffee has become such a national symbol that it’s a favoured gift for international visitors.
Making the giants change their game – and name
What is truly remarkable about G7 coffee is not only its appreciation at home, and its ability to add value to the nation’s coffee industry, but the fact that this small company has managed to challenge a multinational. Its major opponent Nescafe has had to reconsider its branding strategies across markets, going to lengths so extreme as changing its name.
Since the early 20th, the multinational’s product has dominated the instant coffee market. It was only with the success of G7 that forced Nescafe to “look at itself” and cater its offering to Vietnamese consumers with the launch of Vietnam Nescafe.
Vietnam is currently seeing a tough battle in the fight for market share. Following Trung Nguyen’s lead, other companies – even green bean exporters –are entering the instant market. With consumption in Vietnam at just 1.2 – 3 kilograms per person, the battlefield is tight and aggressive.
It’s a battle Trung Nguyen is currently winning. Not only is Trung Nguyen maintaining dominant market share, it’s witnessing its competitors copy its moves. After launching its G7 product packaging with the colours red and black, others quickly changed their packaging to adopt the same colour scheme.
G7 is finding ways to stay ahead of the game. It currently has one of the most diversified portfolios, with diversified products including the 3-in-1 G7, G7 strong X2, Passiona G7, G7 Cappuccino, and White Coffee G7.
It’s been 19 years since Trung Nguyen first started roasting coffee, a pet project by a group of students when the country just starting seeing the emergence of private enterprise. It’s incredible to think that in those two decades, Trung Nguyen has emerged as a symbol for what the Vietnamese can accomplish.
From a nation of poverty, the Vietnamese are now major international players in at least one market. Importantly, it’s a market that brings prosperity to coffee farmers all over the country.
The introduction of G7 to Walmart brings the company one step further in this direction. Chairman Vu continues to prove himself as Vietnam’s Coffee King. He is an inspiration to the youth to show that they can help Vietnam move one step closer to those G7 nations.
As Vu says: “We need to lead the youth to bring the influence of Vietnam to Paris, London, New York, and every road in the world.” GCR