Ramon Esteve III, Board Member Ecom Agroindustrial Ltd
Over the last 30 years, Vietnam has become the second largest producer of coffee, after Brazil. Vietnamese coffee is found everywhere around the world in products consumed daily. A local favorite is the unique cà phê sửa đá, an iced coffee made with condensed milk.
Vietnam’s potential has long been recognized by most trading houses that compete with development schemes to differentiate and add value to their products. ECOM for example, entered in 2001 as a Foreign Direct Investment company to set up a dry mill, which now operates fully on solar energy. This investment was accompanied locally by programs funded by roasters, NGOs and development banks, supporting farmers with certification premiums. Not only does this create a more agile value chain for coffee, but it is how renowned coffee trademarks such as Smiling Tiger and Blue Dragon came to life: a fascinating a culture of innovation aiming to create solutions for our customers and farmers.
The World Bank recognizes trading companies as very effective vectors for rural development; traders do a lot more than just bring you your morning coffee. Enabling producers to develop more sustainable farming practices is part of the different ongoing projects supported by traders and roasters. This is achieved by providing subsidized agricultural inputs to farmers, not using herbicides, lowering carbon emissions, and creating bio-diversity-friendly habitats.
In 2023, IDH the Sustainable Trade Initiative assisted in funding a financing program to subsidize smallholder coffee farmers, allowing for an increase in farm productivity and yields thereby improving income while reducing production costs. Farmers receive access to high-quality fertilizers and seedlings, helping diversify sources of income and climate resilience.
Another example, Arabica varieties developed by CIRAD* in 2000 and tested in Vietnam since 2017 are widely distributed locally: these varieties have proven to be more productive, resilient to climatic stress and disease, as well as having exceptional cup quality. Over 100 million new coffee trees have been distributed to farmers in the past 10 years from their various plant nurseries. Coffee is purchased directly from farmers, creating a unique supply chain, increasing the reputation of the region and therefore the price of their coffee.
The implementation of these tailored programs supports smallholder farmers in sustainable practice, and contributes to increasing their income while developing traceability within the supply chain and reducing pressures from highland forests.
Additionally, in light of the European Deforestation Regulation, Vietnam has been selected to develop technologies with blockchain and innovative data management resources to reinforce the first-mile data collection and reporting solutions.
Whether it is finding new ways to grow coffee, collecting better data for farmers and customers, or supporting communities, Vietnam is definitely the place where we take coffee forward and help secure its future.
*CIRAD is the French agricultural research and cooperation organization working for the sustainable development of tropical and Mediterranean regions. (https://www.cirad.fr/en)