Which coffee chain earns the most money and has the heaviest loss in Vietnam


Most of the major coffee chains operating in Vietnam have grown in revenue over the past year, but not many have achieved good profits.
According to the Nikkei Asian Review, The Coffee House is one of the coffee chains with the highest store growth and turnover in Vietnam. However, as of the end of 2018, the number one position in revenue in coffee business is not in the hands of this chain.

According to figures of Vietnam Industry Research and Consultancy Joint Stock Company (VIRAC), Highlands Coffee is the leading coffee chain in number of stores in Vietnam. By allowing franchising, the chain now owns 240 stores nationwide.

With an overwhelming number of stores, in 2018 Cao Nguyen Coffee Service Joint Stock Company - the owner of Highlands Coffee brand - achieved a turnover of VND 1,628 billion. This is also the number one coffee chain with the highest sales in Vietnam and completely outperforming the rest.

Highlands holds the number one position, Trung Nguyen is in decline
Highlands Coffee was founded in 2000 by Vietnamese-American businessman David Thai. Initially, the brand focused on selling packaged coffee products, but later expanded its retail system and became the largest coffee chain in the Vietnamese market.




In 2011, Viet Thai International sold 49% of Vietnam's business and 60% of its business in Hong Kong to Jollibee Group (Philippines) for USD 25 million.

The deal has become a push for this chain to rapidly increase the number of its stores. Highlands used to take 11 years to reach 50 stores in 2011, but it took less than 7 years to reach 240 stores by the end of 2018.

Ranked second in the number of stores in the market today The Coffee House chain with 140 stores nationwide. Currently, The Coffee House brand is owned by Vietnam Coffee Tea Trading Service Joint Stock Company, by Mr. Nguyen Hai Ninh is the founder and CEO.

In 2018, this chain reached nearly VND 669 billion in revenue, surpassing Starbucks Vietnam and the second-largest coffee chain in Vietnam.

Meanwhile, with 45 Starbucks stores on the market, the owner of this coffee chain is Viet Idea Food and Beverage Co., Ltd. with revenue of more than VND 593 billion.

Ranked next is Phuc Long with 473 billion revenue, up 39% YoY. Although well-known for its tea drinks, Phuc Long has recently promoted its coffee segment with the launch of new coffee drinks to stimulate sales from this product.

Once the hit coffee chain in Vietnam with the support of Trung Nguyen Group, Trung Nguyen Franchising stores - the company that operates and manages the system of Trung Nguyen coffee shops - only maintains its business. revenue over 350 billion in recent years.

The contradictions in the leadership superstructure not only made Trung Nguyen mother group struggle, but also member companies like Trung Nguyen Franchising also faced difficulties.

Meanwhile, some other famous coffee chains such as Cong Coffee, Aha Cafe or Gemini ... only had sales of less than 10 billion years.

Fate is the opposite
Over the years, the domestic coffee market has been expanding. The common point of the major coffee chains in Vietnam is that revenue has increased over the past year.

However, the business performance of these chains is completely opposite. Accordingly, 5/10 companies that own large coffee chains in Vietnam are in a loss situation.

With sales of over VND 1,600 billion, Highlands Coffee is one of three coffee chains with a large gross profit margin, approximately 70%. However, the operation of many stores and shops is well located at large streets and intersections, so the input cost of this chain is also very high.

In 2018, Highlands only earned over 99 billion dong of after-tax profit, equivalent to a net interest rate / revenue of about 6%. Even so, this number still makes the chain number one in profit.

Has the 2nd revenue and owns gross profit margin up to 69% in 2018, but the net profit that The Coffee House chain earned is less than 2 billion. The direct reason for the low profit of this chain is the rapid increase in the number of stores in the past year.

At the same time, many old stores of The Coffee House had to close for some time to renovate, resulting in increased operating costs. In 2018, The Coffee House also spent money to buy Cau Dat Farm's coffee production segment to complete the ecosystem from production to distribution.

Outperformed in revenue, but in terms of profits Starbucks Vietnam still ranked second with over 27 billion dong of net profit last year. Owning a gross profit margin of less than 20%, but supplying high-cost beverage products always helps the chain achieve a fixed profit in each product sold.

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