Starbucks Wakes up to Vietnam

When I first showed up in Vietnam in 1992, Coca Cola was not readily available, nor was Pepsi. A trade embargo was in effect. American companies could not sell in Vietnam. And so, back then, we drank Tribeco soda, which wasn’t all that bad.

After the embargo, consumer brands dipped their toes in Vietnam’s waters. Baskin-Robbins tried to make it work, but were stymied by various impediments. I remember one guy telling me Baskin-Robbins couldn’t figure out how to negotiate their ice cream from the container ships to the shops through the bureaucracy fast enough. The ice cream kept melting and refreezing, and no one likes that.

Burger King recently opened in Saigon, and I believe there’s even an outlet at the new airport in Danang. No sign of McDonald’s yet. I expect the burger joints will go over as well in Vietnam as KFC is now. Which appears to be pretty well. Burgers and fried chicken are novelties in Vietnam.

But Starbucks? The Vietnamese may take a shine to the brand — which says it’ll offer flavors “tailor-made” to Vietnamese tastes when it begins pouring in next month — but I think it’s likely to be a tough sell, asking very sophisticated consumers of coffee to give up their kind of coffee, be it the cafe fin served hot or cold, with or without condensed milk, for Starbucks’ take on what makes a good cup.

Jim Sullivan Managing Director
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