coffee, cooperation and competition: a comparative study between colombia and vietnam

Coffee, Cooperation and Competition: a comparative study

between Colombia and Vietnam

Geneva, Swizerland

May 2009

Adriana Roldan-PerezMaria Alejandra Gonzalez-PerezEAFIT UniversityMedellin, Colombia

Pham Thu HuongDao Ngoc TienForeign Trade UniversityVietnam

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AcknowledgementsFunding:

EAFIT UniversityFTU UniversityVI, UNCTAD

Institutional Affiliation:Department of International Business at EAFIT UniversityForeign Trade University (FTU)

Other:Eamonn McDonagh and Ignacio Mastroleo

Research assistants:Catalina Tabares (Colombia)

Melissa Eusse (Colombia)Franz Xaver Riegler (Colombia)Stephanie Riegler (Colombia)Nguyen Thu Hang (Vietnam)



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Content

1. Rationale and objective of the study

2. Methodology chosen

3. Main findings

4. Challenges faced

5. Intended use of the study/follow-up



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1.1. Rationale of the study

Research on Trade, Investment and Development:

Policy making:

EAFIT University and FTU:



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1.2. Objectives of the study Contributing to the understanding of context and processes of the

coffee industry. To identify links and dynamics in the value chain in both

Colombia and Vietnam that have been developed in the coffee industryTo explore the context, players, stages and features to explain

the differences between Colombia and Vietnam.To compare development policies in both countries and identify

regulatory mechanismsTo identify current/potential patterns of cooperation and

competition threats between these two countries.

To develop a methodology for comparative studies amongst developing countries in different agricultural sectors

To design a research instrument that will potentially be used in other coffee-producing countries, and other agricultural commodities.

To share expertise and knowledge in areas.



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2. Research methodologySecondary data.

Secondary data includes company and industry reports, books, academic papers, articles, databases, and websites related to coffee industry in both two countries.

Value Chain Analysis (Dolan & Humphrey, 2000; Gereffi, 1999; Gereffi, Humphrey & Sturgeon, 2005; Gereffi &

Kaplinski, 2001; Humphrey & Schmitz, 2001; Kaplinsky 2000; Kaplinsky & Morris, 2000; Sturgeon, 2000) was chosen as the primary methodology to choose the potential sample, and to design an observation protocol

Primary dataIn- depth interviews with key players in both in coffee industries Colombia: Antioquia coffee region and in Medellin between

October 2008 and January 2009. Vietnam: Hanoi, Hochiminh and Buonmethuot February 2009



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3. Main findingsGlobal value chain of coffee

Theory on Global value chain

Overview of world coffee market

Mapping the global value chain of coffee



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Data source: Kaene (2008).

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3. Main findingsAnalysis of Colombia’s and vietnam’s participation in coffee value chain

Coffee industry environment

Position in international market

Actors:

Casestudies

Vinacafe Buonmathuot (Vietnam)

Phuongvy coffee company (Vietnam)

National coffee Federation (Colombia)

Colcafe S.A. (Colombia)



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Farmers

Collectors

Coffee processors

Traders

Export

Vietnam

Foreign country

Domestic coffee bars

Domestic retailers

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Consumer

Retailer

RosterInstant coffee manufacturer

International Trader Broker Intermediary

National Federation of CoffeeProducers

(NFC)

Exporter(National or MNC)

Threshing and quality control process

Local cooperatives-NFC-

Retailing store

Domestic consumer

Colombia

Consumer Markets

Drying, washing and cleaning

Hand picking and selecting

Plantation and growing

Domestic roasting and grounding

Instant coffee manufacturing

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3. Main findingsComparative Analysis

Position in global market

High reliance on coffee export (5.7% - 3.9%)

History of coffee exporting

Structure of export product and level of processing

Main exporters

Export market

Participation in coffee’s GVC

Arabica vs Robusta

Nestle in instant coffee market: 46% (colombia) 33% in Vietnam



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3. Main findingsCooperation

Coffee selling: different types and harvest seasons

Instant coffee production

Labour conditions

Technological transfer

Competition

Export Market

Production cost / Social & Environmental pratices



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RecommendationsVietnam

Reform ViCOFA

National trade mark

Coffee specialities

Domestic consumption

Instant coffee market



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RecommendationsColombia

Advertisement and coffee promotion

More added value

Quality and traceability

Advertise and promote Colombian coffee brands internationally

Increase its domestic consumption

Scientific research on behavioural patterns, and physiological aspects of consumption



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4. Challenges faced

Coordination of communication

Different expectations and level of expertise

Language barriers

Financing/payment modality of the project

Allocation of resources



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5. Intended use of the study/follow-up Research instrument applicable to other countries with coffee

industry, such as Brazil, Indonesia, India, Mexico, Ethiopia

Research instrument applicable to other agricultural commodities (value chain analysis)

Presentation of research results:Foreign Trade University, Hanoi/Vietnam (19 February 2009); Colcafe, Medellin/Colombia (May 2009)

PACIBER Annual Meeting, Queenstown/New Zealand (3-6 July 2009)

Journal paper

Paper presentation and/or publication through Vi network members?



Thank youCám ơn / Muchas Gracias



Questions and comments are welcome.

coffee, cooperation and competition: a comparative study between colombia and vietnam

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