Why Neumann Kaffee Gruppe is expanding into Asia

Neumann Kaffee Gruppe

Holding company Neumann Gruppe explains why Neumann Kaffee Gruppe is expanding in the Asia Pacific region, and how the group is responding to industry developments and challenges.

Ruben Scholz is a strong believer that the establishment of Neumann Kaffee Gruppe (NKG) Korea is an important next step in the group’s evolution. The Neumann Gruppe (NG) Chief Operating Officer says the new green bean trading company under the NKG Asia Hub will contribute to its overall growth ambition and increase its share of Arabica sales in the region.

“The Korean coffee market has experienced significant growth and transformation in recent years, becoming a vibrant and dynamic industry. Coffee consumption in Korea has been steadily increasing, with coffee becoming a popular beverage choice among consumers. The Korean coffee market has embraced the specialty coffee movement, characterised by a focus on high-quality beans, precise brewing techniques, and artisanal coffee experiences,” he says.

“We are convinced at NKG, that through our strong coffee origin setup, we will be able to add value to our clients in Korea from major roasters, wholesalers to small- to medium-sized roasters to respond to these trends.”

As its first Korean-based company, NKG Korea will be offering all types of coffees from commercial mainstream to specialty qualities.

“The Korean coffee market is relatively well-balanced, consuming a good mixture of Arabica and Robusta coffees with an interesting split of commercial and specialty coffees, while the most recent trends are heading towards consuming premium coffees. We expect to have a wide range of origins available following the main imported origins such as Brazil, Colombia, Vietnam and Ethiopia to high-end specialty, single estates from Central America or East African origins,” says Scholz.

“In our procurement, we will focus on our NKG exporters network and market their respective qualities and brands to our clientele in Korea.”

The new NKG office is located in the Mapo-gu district in the western part of Seoul with easy access to both the Incheon and Gimpo airports. Scholz says the location in the industrial and younger generation area is close to some of the company’s main, and potential new customers.

“Korea is a very exciting market because of the continuous growth in consumption and diverse landscape of customers, who expect proactive communication and innovation. NKG Korea is a local business with a focus on client communication, importing, and the distribution of coffee. In order to deliver these services, we established a team of professionals who are from the community and have a great understanding of the culture. With this setup we can respond to all types of clients who ask for full container loads to one-kilogram green coffee online shopping,” Scholz says.

NKG is working with local warehouse partners and other service providers to distribute coffee country-wide in the near future.

“Currently, we are in a stage where we can deliver coffee in original bags, by pallets, or a whole container load. At a later stage, we will consider entering the online distribution of smaller sized packaging to respond to even the smallest size of customers,” Scholz says.

As a growing global network, Scholz states NKG is committed to continue playing a leading role in global coffee supply chains. He is eager to apply his knowledge of the Asia-Pacific (APAC) coffee markets to further support the company’s growth in his new role as COO.

“The transition [into my new role] has been smooth in terms of coming back to my hometown and our headquarters in Hamburg, Germany after three years in Singapore,” says Scholz.

Scholz has worked for NKG for more than 25 years. He has operated as Co-CEO of Bernhard Rothfos and Managing Director of Bero Coffee Singapore, both NKG brands, and played a leading role in developing the Asia and Oceania region for NKG.

He has joined the Board of Management of NG as Chief Operating Officer and is responsible for the global business operations of NKG. With a wealth of experience under his belt, Scholz declares he is ready to put his in-depth knowledge to the test.

“In my previous roles within NKG the focus was directed towards Latin America and Europe. Therefore, my time at Bero Coffee Singapore complemented my coffee knowledge on two of the main Robusta producing origins, Vietnam and Indonesia, and it allowed me to learn more about the growing potential of APAC consumer markets,” Scholz says. “My time in Singapore also complemented my understanding of leadership and work attitude in a different cultural context.”

Scholz was able to deepen his knowledge of the Asian coffee markets and came to understand the vast potential that the region had to offer the global coffee industry.

“My main takeaway is that there is no one Asian coffee market. It is an aggregation of many individual consumer markets with completely different levels of consumption behaviour, distribution channels, and consumer sophistication. To manage this diversification in a growth strategy is a great challenge but makes our business much more interesting and rewarding when you achieve a milestone like this,” Scholz states.

“We have a very strong setup of companies in Southeast Asia, with NKG Vietnam, Berindo Jaya in Indonesia and Bero Singapore under one commercial roof that we call the NKG Asia Hub. When I worked as Managing Director of Bero Coffee Singapore in 2020, we developed a three-year strategic growth plan and vision for NKG in the region, which included the incorporation of the company in Korea.”

Scholz says the challenging part in managing his new role is the pure amount and importance of topics the NKG is currently dealing with.

Some of those matters include strategic planning, operations management, and performance monitoring. Scholz also oversees departments that address changes in the global coffee industry, such as climate change and providing smallholder farmers with the services and resources they need to continue to make a living from coffee.

“We have developed our NKG Responsible Business Program, which defines strategic objectives for our work, building a robust framework for our group’s sustainability efforts.

The consideration of social, environmental, and economic needs is an integral part of our business model and contributes to our long-term success,” Scholz says.

“To positively impact smallholder coffee farmers’ livelihoods, we have created NKG Bloom. This initiative focuses on safeguarding the future of green coffee supplies by ensuring that coffee farming is a financially viable business that can provide economic security to families. We are currently active in Uganda, Honduras, Kenya, and Mexico and already work with more than 81,000 smallholder farmers, some through farmer organisations.”

Another initiative the company has launched to support the coffee industry is NKG Verified, which intends to provide traceable coffees produced on farms that comply with specific social, environmental, and economic criteria.

“As of December 2022, NKG Verified has reached 12,958 farmers in Mexico, India, Vietnam, Colombia, Indonesia, and Brazil. We are currently working on further supply chains,” adds Scholz.

Scholz says NKG’s global network of 60 companies in 27 countries and more than 3200 highly skilled employees makes the green coffee service group particularly strong and flexible in responding to changes.

“While we operate globally, we have our own teams on the ground in most important exporting and importing markets, which gives us a local view of developments, and enables us to respond to challenges on short notice,” he says.

“We will continue to build on these strengths and create synergies as a group in the face of increasing challenges, so that everyone along the value chain can make a living from coffee in the long-term.”

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This article was first published in the September/October 2023 edition of Global Coffee Report. Read more HERE.

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