Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam

1. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam Adriana Roldan-Perez Maria Alejandra Gonzalez-Perez EAFIT University Medellin, Colombia Pham Thu Huong Dao Ngoc Tien Foreign Trade University Vietnam Geneva, Swizerland May 2009 1

2. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam Acknowledgements Funding: EAFIT University FTU University VI, UNCTAD Institutional Affiliation: Department of International Business at EAFIT University Foreign 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) 2

3. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam Content • Rationale and objective of the study • 2. Methodology chosen • 3. Main findings • 4. Challenges faced • 5. Intended use of the study/follow-up 3

4. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam 1.1. Rationale of the study • Research on Trade, Investment and Development: • Policy making: • EAFIT University and FTU: 4

5. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam 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 industry • To 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 mechanisms • To 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. 5

6. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam 2. Research methodology • Secondary 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 data • In- 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 6

7. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam 3. Main findings Global value chain of coffee Theory on Global value chain Overview of world coffee market Mapping the global value chain of coffee 7

8. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam 8

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10. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam Data source: Kaene (2008). 10

11. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam 3. Main findings Analysis 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) 11

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14. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam 3. Main findings Comparative 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 14

15. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam 3. Main findings Cooperation Coffee selling: different types and harvest seasons Instant coffee production Labour conditions Technological transfer Competition Export Market Production cost / Social & Environmental pratices 15

16. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam Recommendations Vietnam Reform ViCOFA National trade mark Coffee specialities Domestic consumption Instant coffee market 16

17. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam Recommendations Colombia 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 17

18. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam 4. Challenges faced • Coordination of communication • Different expectations and level of expertise • Language barriers • Financing/payment modality of the project • Allocation of resources 18

19. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam 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? 19

20. Coffee, Cooperation and Competition: a comparative study between Colombia and Vietnam Thank you Cám ơn / Muchas Gracias Questions and comments are welcome.