The Married Beans and the dream of “decent coffee”

Article quoted from yan.vn

“I didn’t think I would succeed with The Married Beans. But I could bring more choices for young Vietnamese people to enjoy, when the “third wave” of world coffee is rising strongly with high-quality coffee, artisanal coffee and experiential coffee” – Duy Ho, 31-year-old owner of The Married Beans, said.

Duy Ho spent 6 years working with coffee farmers in Lam Dong as a volunteer in a sustainable development project. But, as he said, when he founded The Married Beans here in 2015, he still had only “three nos” in hand as he said: no money, no machinery, no business experience.

Don't rush to calculate "how many tons to export, how much money to receive"

How did you overcome the "three no's" barrier?

We borrowed. We borrowed on trust, and paid interest on credit. It was the only way for me at the time to change the value of coffee, benefit the farmers and bring customers to better choices,

The first days I went alone on horseback all over Lam Dong to discuss coffee purchasing. Farmers shook their heads: It’s too risky. My whole family lives on 1-2 hectares, selling to agents for 5,000-6,000 VND/kg to get a few hundred million like before was reassuring. Now, a guy wearing a turban and riding a motorbike like you comes to place an order, the price is double or triple, but the process is complicated, if you don’t buy on the day, won’t you and your uncle lose money?

Of the 10 farmers I contacted, 7 responded like that, only 3 believed in me and wanted to try. The rest mostly depended on the agents because they were in debt. And I had to go hand in hand, both convincing the farmers and handling conflicts with the agents.

For farmers, I use advance payments: From March to September, before the harvest season, I advance about 30-40% of the money to purchase high-quality products by dividing it into small installments of about 3, 5, 10 million for them to buy fertilizer, pay bank interest, spend even on school fees, medicine. Then, I pay off the amount as soon as I get it so they can rest assured.

What about competing with dealers?

Commercial competition with the agents of shops and “village pimps” who control local interests is inevitable. These are the people who control 90% of the fertilizer production, finance, and loan sharking of farmers. It is necessary to convince them that the interests of the parties are mutual, not contradictory.

Knowing that, it was not easy for me. Many times I was threatened, had my car blocked, and even thought they were going to kill me. When they met me, I still tried to shake their hands and said: "I've been looking for you guys for a long time, now I have the chance to invite you to the shop." Sitting at the shop, I clearly explained: They need to collect more than ten tons a day, while I only collect 1.2 tons of high quality and I will pay double. If you have any, I will also pay the same price. Gradually, some agents joined my network.

With farmers who have grown coffee with many years of pure agricultural experience, how do you convince them to follow your process and standards?

Farmers often do not need money. They need respect, listening and connection with the outside world. They ask: "My coffee is bought for 40,000 VND/kg, who bought it for you for 150,000 VND/kg, are you cheating people?". I have to explain clearly and specifically: The current floor price is 3 USD (75,000 VND), but after I buy it, it will be processed, packaged beautifully, clearly stating the origin of Da Lat, Vietnam for export, and sold at 8 USD (200,000-300,000 VND), which is 2-3 times higher than the world floor price.

And not just talk, we have to do it with them. That is when we use our knowledge, skills and experience to teach – even digging holes, digging trenches, applying fertilizer at different intervals, spreading fertilizer at the base, increasing the amount of compost for planting trees, using measuring tools to prove it with actual data.

It was hard, but that story is related to my principle: Don’t rush to calculate how many tons to export, how much money to make. Let’s start everything by returning the right value to Vietnamese coffee.

"Absorb the blow" to know where you are

How do you build your output strategy?

To be introduced internationally, the product must meet at least four conditions: infrastructure, supporting equipment, international quality standards and unique flavor. First, as I observed the market in Vietnam, if I made roasted coffee, my potential and position could not compete with many others. Therefore, I had to choose a niche market, the most difficult market that no one had pursued at that time (2013) was specialty coffee.

Second, after identifying the segment, you must participate in coffee communities, languages, and forums. Your products cannot be judged by Vietnamese standards but must comply with international standards. From there, you must invest in science, technology, machinery, etc. according to the production process to ensure this standard.

Finally, there is the story of price, as well as the difference in taste. This comes from the fact that European and American customers have been used to drinking coffee from Brazil for decades. Now, we have to prove to them: Vietnamese coffee has the taste of Arabica coffee - a taste that was brought over from the French hundreds of years ago and is being revived by us...

The above strategy must have been drawn from many previous failures?

You poured me a bucket of water (laughs). An acquaintance introduced me to an organization called AVPA in France. They support poor countries in production, whereby small businesses have the opportunity to recognize their products through a coffee competition. In 2015, The Married Beans had its first product, so I sent 2 samples to the competition, receiving a second prize and a third prize. After that, many organizations, supermarkets, investors... wanted to buy the winning products - including a casino in Paris that promised to buy a 16-ton container of roasted coffee every month. The first time I entered the international market and achieved a high ranking and received a large order, I was proud.

After a whole month of hesitation, I called back and forth, not daring to set a price for fear of being overcharged. Finally, I said: Okay, now I'll sell at a loss to build relationships. I confidently quoted a wholesale price of 10 - 12 USD/kg (only 1/3 of the retail price at that time (600,000 VND/kg). After listening, they asked me 3 questions: 1) I see the price of Vietnamese coffee on the floor is 1.7 USD/kg, right? Yes; 2) Does your roasting technology follow any ISO standards? No; 3) My Turkish partners rent an office next to the casino, give away coffee machines, support cups, bases,... those costs are considered priceless. But can they do that? Of course not.

After the third sentence, I had to lower the price to 8 USD because below that level was a loss, I could not do it. They sent another list of 6 suppliers in the last 3 years with prices of 4.5 - 5 USD including incentives of free coffee machines, sugar, coasters, pre-delivery for 8 months of credit... Only then did I feel the blow and realize my position in particular and Vietnamese coffee in general.

And I have the first hard lesson: If you want to develop, you have to look straight at the market, accept the weak reality so as not to give up.

Necessary “stops”

Let's move on to a current issue: the Covid-19 pandemic. What are you doing to get through this period?

In the 3 years since 2016, The Married Beans has grown quite rapidly although it has not reached the final goal that I set. And in 2019, I wanted to stop to develop internally. Luckily, when the pandemic came, I had just finished the system. Some of the company's products have appeared on e-commerce platforms in 2021. In addition, we will bring anti-epidemic support coffee, serving the highest quality ready-to-drink coffee to quarantine areas and doctors.

That is to say, the story here is about choosing sustainable values, instead of being impatient with short-term things. And we are willing to stop for a beat or two if necessary...

In general, the coffee business is not an easy field, it requires preparation and perfection. I do not hesitate to share strategies because in the industry, it is impossible to be alone, we need to share and connect to develop this community.

Let me tell you another story. At the end of 2019, my Japanese partner deposited money for the new crop. At that time, I had just learned that there was an epidemic in Wuhan, although it had not yet broken out as it is now. After much hesitation, at the beginning of 2020, I decided to return the deposit to my partner because I realized there were too many risks. If the epidemic broke out and I could not export, the loss would be even greater than if I canceled the order at this time. The customer thought I was being too presumptuous.

Then, in May 2019, they emailed to thank me because the deposit that I returned had become a lifeline for them at that time. At that time, my reputation increased a lot. And after that, they came back to buy more products and paid before receiving the goods. We also relieved a lot of pressure during the epidemic season thanks to that money.

That said, I want to look at your question from the perspective of ensuring the interests of customers first. Like, in many cases, we still deeply discount our partners to reduce their losses. That is the strategy in building reputation and value.

So, what are your expectations and directions for the "specialty" coffee model in particular and Vietnamese coffee in general?

About a decade ago, coffee consumers in Vietnam were not too demanding, the group of customers who knew common sense and “the right taste” was still quite rare. As society developed, the demand for enjoyment increased, putting pressure on producers as well as coffee brands. Businesses began to research and invest in specialty coffee to catch up with the world wave. That is also the third wave of coffee that The Married Beans is trying to build.

From the habit of using industrial products such as instant coffee, many people now want to experience pure products, with a connection from farmers to brewers to bring the finished product of a cup of fresh coffee on the table every morning. I believe this is the trend, and I am following the trend.

I solve the output for farmers. Opening a store to bring products abroad so that customers can learn more about Vietnamese coffee culture is a further story .

Thanks for sharing!