Highlands Coffee steps up investment, export, and IPO strategies

Vietnam’s coffee industry stands at a crossroads. With global robusta prices reaching record highs and production volumes falling, the market is undergoing a drastic transformation. At the farm level, investments including soil technology, regenerative agriculture, agronomy training, and technologies like drone mapping and blockchain are revolutionising farming practices.

The key benefits of these investments include providing sustainability for farmers and overall robusta supply by enabling better crop yields, higher prices, and higher profits while enabling the production of ‘fine robusta’ at scale, to drive the ‘robusta renaissance’ globally. At the café level, significant investments are being poured into new cafes for independents and chains, bringing innovative products and services to consumers.

As both an exporter and an investor, Highlands Coffee stands at the forefront of the investment waves in Vietnam’s coffee industry. Not only does it understand what the world wants from Vietnamese coffee, but the company is also deeply embedded in the local landscape – working alongside farmers, navigating cultural nuances, and investing in what matters most: people and potential.

Specifically, consumers today expect brands to be authentic and share their values. Highlands Coffee is a proudly Vietnamese brand. Born in Vietnam and a ‘brand of origin’, Highlands specialises in robusta-based products that are sourced in Vietnam, roasted to perfection in its state-of-the-art roasting facility, and distributed globally.

Highlands Cai Mep Roastery has a planned production capacity of 75,000 tonnes per year as operations mature

Capitalising on the rising demand for robusta and origin coffee, Highlands is investing in its people, cafes, technology, and supply chain, ensuring long-term sustainability for the business, suppliers, employees, Vietnamese communities, and the environment. Efforts are also made to drive the growth of the Vietnamese speciality coffee segment internationally, which is an emerging and high-growth segment of the global coffee industry. To facilitate the goal, Highlands is acting as a flag carrier for Vietnamese culture by exporting Vietnamese coffee and heritage.

At the heart of Highlands’ corporate culture lies its ‘soul.’ From the founder, David Thai, to lower-level employees, there is a culture of care and love and a passion to help develop the Vietnamese coffee industry and the country overall. Thus, the company is achieving growth and success by staying true to Vietnamese coffee culture and heritage.

Another factor contributing to Highlands’ success is consumers' emotional attachment to Vietnamese coffee. The brand is defined by the sum of perceptions, emotions, and experiences that consumers associate with its product, service, and company, shaping their loyalty, trust, and emotional connection beyond functional benefits. This underscores the importance of brand strength as a key driver of enterprise value.

In light of its ongoing investment, Highlands will stay true to its Vietnamese roots by continuing to champion robusta-based Vietnamese coffee and conscientious service.

Driving purposeful investment and IPO plan

In addition to customers, investors also play a key role in Highlands’ success. Investors are assessing Highlands as an investment opportunity by looking at the company’s performance, growth profile, and capabilities. For investors, sustainability is considered an important driving force to stimulate the company’s growth. Thus, Highlands is encouraged to have the proper environmental, social, and governance platforms in place to ensure long-term sustainability.

When done right, Highlands’ sustainable investment in robusta supply chains can create a win-win-win for farms, coffee brands, and Vietnam. Specifically, farmers can benefit from sustainable farming practices with higher yields and income. By investing in sustainability, Highlands can secure supply and co-develop fine robusta supply. Sustainable investment will allow Vietnam to develop and advance the Vietnamese robusta coffee industry overall by increasing volumes and quality, while providing traceability and meeting sustainability and environmental standards.

It is evident that Highlands is looking to curate fine robusta rather than just volume and sustainable volumes. Tim Seltzer, CFO of Highlands Coffee, said, “We are in a position to not only benefit from but also to actually drive to be an influencer in the growth of global Vietnamese coffee. We need to move at the speed of that opportunity. We need to invest upstream in robusta supply to continue to grow and remain the market leader in Vietnam and to move outside of the country.”

The new roastery, combined with an upstream strategy, will allow Highlands to efficiently scale the production of fine robusta to address the demand in Vietnam and globally

“If we don't invest fast enough, we will sub-optimise the growth and the robusta industry in Vietnam. We will not maintain our position as the market leader, and we won't be able to have the influence we need. If we don't move more aggressively internationally, we will lag behind other players and fail to represent Vietnam's coffee culture or heritage.”

Tim Seltzer, CFO of Highlands Coffee

Highlands is committed to its initial public offering to share the success of the brand with employees, customers, and stakeholders and to drive accelerated investment and growth for the business.

Seltzer said, “While we have not finalised plans, our intention is to list Highlands in the next 18-24 months and to select a listing venue that best supports our growth ambitions and core values, continuing to champion Vietnamese coffee globally and remaining true to our Vietnamese origins, heritage, and pride.”

“It’s easy to list a business. It's very difficult to list the business properly. The challenge is to maintain premium multiples in the market years after listing,” he added.

The IPO is a mechanism to allow Highlands to continue to grow in a way where the company stays true to its values. In pursuit of the IPO, Highlands will continue to be the flag carrier for Vietnamese coffee. Overall, the IPO isn't the end. It's just a means to support the strategy, growth, and the existing vision.

F&B is still a game for TOP brands With a growth rate of more than 10 per cent per year, the food and beverage market is still a vibrant playground led by big brands.

Highlands Coffee opens roastery in Ba Ria – Vung Tau Highlands Coffee announced the opening of its Highlands Cai Mep Roastery in the southern province of Ba Ria-Vung Tau with a total investment of VND500 billion ($21 million) on April 16.

Domestic drinks chains set to step-up Foreign beverage chains continue to dominate the Vietnamese market, while local brands restructure and expanding to recapture market share.