Modernizing Vietnamese Coffee: An Interview With The Coffee Factory
Open air street cafes are a staple of the Vietnamese office professional.
Plastic stools, low tables, and iced coffee. These cafes offer convenience and a relaxed environment right at the doorsteps of the skyscrapers that employ thousands of Vietnamese office professionals.
Yet these cafes are beginning to be outnumbered by the likes of new, more recognizable chains. Not all of these chains retain their Vietnamese identities, however. Many are beginning to move into Starbucks-like territory, with higher end interiors and Western-level prices.
Is there a cafe in Ho Chi Minh City that offers the same value and coffee bean that local Vietnamese coffee goers know and like? In a setting adapted for slightly more modern Vietnamese tastes?
The Coffee Factory aims to be that cafe. It represents the steady modernization of a timeless traditional Vietnamese concept.
Started by local Khanh Tran two years ago, it’s already opened 11 locations. Each spot is packed on weekday mornings and afternoons with locals enjoying their daily coffee.
We took the time to sit down with Khanh at their first location in District 3 to learn more about their company’s story, process, and why they started the brand.
What does coffee culture in Vietnam mean to you?
Everyone in Vietnam goes for a coffee everyday. As a local growing up and working in Ho Chi Minh City, I picked two of the most important factors in a coffee shop: it’s close to the main street and it’s open air. That’s what I like.
When I visit other open air coffee shops, I sometimes order tea and juice instead. Whenever I do that, there’s something missing. For me, it means that there’s a gap in the market. Today, 70% of the business is the traditional black or milk Vietnamese coffee.
Our team went out to create a high quality coffee at a local mass market price. Beyond that, we aim to offer an entirely new product category for that market, Fresh Roasted Coffee. The first shop is the rawest form of the brand, others are adaptations as we learned about what worked and what didn’t.
How did your background in finance influence how you operate The Coffee Factory?
I use my background in finance to inform decisions. A coffee shop model that serves premium quality coffee, aims at mass market, and is located at prime central business district areas. It’s a low margin business, so entering the market requires discipline. This philosophy also applies to how we hire and train baristas. We want our staff to be the best and to be proud of their work ethic. We have a ranking merit system that we use to recognize our top baristas, it helps to keep our staff involved in fun competition.
What kind of person takes their afternoon break at The Coffee Factory?
It doesn’t make sense to pay so much money to a foreign coffee shop brand like Starbucks for the average Vietnamese consumer. That’s why we exist. We want to offer high quality coffee, either Vietnamese or Italian, to the mass market consumer. Our bread and butter customers are office professionals.
We’re also a 100% cash only business since we know that most Vietnamese consumers don’t like using cards.
What’s next for The Coffee Factory?
So far we’ve dedicated zero dollars to marketing and PR. We’re looking more into positioning and brand imaging. We’ve got new drinks coming up that no other coffee shops are experimenting with. And we’re always opening new stores.
We want to scale up, while keeping one step ahead of our competition. We haven’t franchised because we want to control quality. We also believe in hiring and promoting internal staff.
What are your favorite cafes in Ho Chi Minh City?
I like to stick to my roots as a traditional Vietnamese cafe-goer. I enjoy going to coffee to meet friends in relaxing and convenient environments, it’s never about going to a specific place.
Where do you like to go on a Friday night?
If you like wine, go to Cork & Bottle on Thai Van Lung in Ho Chi Minh City. It’s simple and there’s no loud music. The Martini Bar at the Park Hyatt also has an excellent happy hour, 5pm-8pm daily.
What are your favorite travel destinations? Where do you want to go next?
France. I was taught to speak French since I was 5 and since then have always been in love with the country’s culture, food, people, etc. France has always been one of my favorite travel destinations.
Other than that, I’m looking at going to Japan next.
What are some nice-to-knows about Khanh and The Coffee Factory?
- I have spent more than 10 years living in the States, but the language that I first learned besides Vietnamese was French.
- I used to play a lot of sports: netball, softball, cross-country, soccer, tennis, swimming, surfing, and horse-riding, but unfortunately I’m not a professional at any 🙂
- The Coffee Factory is a roastery cafe. We roast our coffee beans every 3 days, raw with no additives to bring the freshest coffee to our customers.
- We started out roasting about 40kg of coffee beans per month to a volume of more than 2 tons per month now.
- Known for being a specialty coffee place, baristas and staffs at The Coffee Factory are quite ‘hard-core’. They are ranked by a seniority ranking system called “pin and gear” similar to that of the military.