Major coffee makers miss out promotional options

Vietnam is the second-largest coffee producer but could still improve promotions, photo Le Toan

The Singapore Coffee Association (SCA) is about to launch the first-ever micro lot Specialty Coffee Online Auction, making dozens of individual coffee lots available to international buyers online on October 1. However, instead of using this opportunity to promote domestic products, Vietnamese coffee exporters including Phuc Sinh Corporation announced they would not participate in the auction.

“That is not the market that we target,” said Phuc Sinh’s general director Phan Minh Thong.

According to Thong, Singaporeans are good at marketing and built a decent-sized rubber market, but failed in the coffee and pepper segment. “Singapore is not a big coffee market, and coffee is not a daily drink for Singaporeans. Thus, Phuc Sinh will not push into this market,” Thong said.

Still, Thong seems to miss that the event is not specifically targeting Singaporean but mainly international suppliers. Moreover, to participate at the auction, producers only need to provide 33kg of quality green beans and do not have to pay any fees.

The reveal of the SCA’s first virtual auction has received enthusiastic reactions from global producers with 56 lots of speciality coffee from 12 countries being registered for participation. This feedback exceeded the SCA’s expectations as they initially only considered a maximum of 40 lots and expected between 150 and 200 bidders to participate in the virtual auction.

Stefan Muller, CEO of Cafe Don Benjie and producer of the world’s most expensive coffee bean, Panamanian Geisha, hopes the auction will be a great success because its unique way of organising it via Zoom could possibly open doors for similar events. For Muller, it is an honour to introduce the best Panama Geisha to the Asia-Pacific market.

The pandemic has reduced coffee exports across the world, of which the largest drop occured in the British market with a fall of 24.6 per cent since early this year, amounting to $33.1 million. Meanwhile, the Chinese coffee market dropped 13.7 per cent in the first six months of 2020.

Nevertheless, Xenia de Ameglio, owner of Cafelino S.A. and also producer of Panama Geisha, said that business will continue for the industry and that the auction is taking place at the right time. She hopes that the event will help promote her products to Asia.

Online coffee auctions are nothing new, but to run a virtual live auction on a videoconferencing platform may be the first time in Asia, if not worldwide, with COVID-19 pushing the SCA to innovate sales for a new market environment.

SCA president Victor Mah believed that the virtual auction will also be different from other online coffee auctions as bidders will enter into the act as if they were participating physically in an auction, so they can interact in real time with each other.

Coffee auctions usually offer the flexibility and convenience of an on-site coffee tasting before the actual auction. In the SCA’s case, since the event happens online, the organisation must submit a green bean sample to potential bidders in advance so that they can evaluate them. Thus, a longer preparation is required before the actual auction.

Mah said that organising the auction virtually, “is a bold idea as coffee is something you need to smell and taste before you decide to buy it.”

In addition to sending samples in advance, the SCA has implemented an internationally recognised grading system that will provide contractors with a clear indication of the quality of the beans.

Mah believed the SCA’s partnership with Singapore’s largest hospitality trade show organiser Food & HotelAsia will also amplify the event’s reach to contractors.

Nguyen Quang Binh, coffee market analyst at the New York and London exchanges commented, “It is unfortunate that Vietnamese speciality coffee is not on the list,” adding, “Domestic speciality coffee makers have been making a lot of efforts in the last few years but to my surprise their associations do not see such a big event as a good opportunity for acquiring new distribution channels.”

According to the SCA, the auction will feature some globally prized coffee varieties from many of the world’s most renowned growing regions, including Mundo Novo and Yellow Catucaí from Brazil, Bourbon from Guatemala, Ateng Super from Indonesia, and Catuai and Catimor from Myanmar, among many more.

“It is the first time the SCA is holding the event online, and a missed chance for Vietnamese producers to promote their products to the world,” Binh concluded. “I hope if the Vietnam Coffee and Cocoa Association is not interested in participating in the next iteration of the event, perhaps the Buon Ma Thuot Coffee Association will be.”