Vietnam Instant Coffee Market Size, Share, Opportunities, And Trends By Type (Freeze-Dried Instant Coffee, Spray-Dried Instant Coffee, Others), By Distribution Channel (Offline (Retail, Food service), Online), And By Province - Forecasts From 2023 To 2028

Vietnam's Instant Coffee Market was estimated to be valued at US$325.574 million in 2021 and is anticipated to grow at a CAGR of 12.26% to attain a value of US$731.443 million by 2028.

Instant coffee is a type of coffee made from the dried coffee extract and is one of the most popular beverages all around the world. Being the world's second-largest coffee producer, Vietnam holds significant importance as a pivotal trading point in the global coffee market. According to World Bank, the growing population of the country with a population nearing 99.46 million in 2022 along with the influence of French colonialism is a key driver behind the growth of the instant coffee market in Vietnam.

Changing Lifestyle of the Population

According to World Bank, Vietnam’s GDP has reached a value of US$ 408.8 billion in 2022. The country depends mainly on its agricultural sector with recent shifts to the secondary and tertiary factors of the economy. Rapid digitization has also furthered the development of the country. Cumulatively, these factors have led to an adoption of a fast pace of life in the country and this changing lifestyle has expanded the instant coffee market in recent times. The coffee culture in Vietnam has a rich historical background, with its roots dating back to the 19th century when coffee was introduced by the French. Following the Vietnam War, the government implemented a large-scale coffee production initiative, further solidifying the country's deep connection with this beloved beverage. As people are advancing, there has been a shift to instant coffee powders like Nestle, Trung Nguyen, etc.

Presence of International Coffee Chains

The proliferation of both local and international coffee chains in Vietnam's urban centers has attracted a diverse crowd of busy professionals, students, and tourists, resulting in a surge in demand and driving the market forward. Additionally, the rising popularity of instant coffee in the country can be attributed to the growing number of young consumers, further contributing to the market's growth. According to the World Bank, the median age in Vietnam is 27.6 years, which is one of the youngest in the world. This young population is increasingly demanding convenient and easy-to-prepare beverages, and instant coffee fits the bill perfectly.

Increasing Urban Population

The rapid growth in Vietnam's urban population from 35.213% in 2017 to 38.766% in 2022 has significant implications for the country's instant coffee market. As urbanization accelerates, it fosters a burgeoning consumer base with changing lifestyle patterns and an increasing demand for convenience products like instant coffee. The expanding urban population creates a favorable environment for the growth of the instant coffee market, as these areas tend to exhibit higher disposable incomes and modern retail infrastructure. Moreover, Urban dwellers, who often have fast-paced lifestyles, prefer easily accessible and time-efficient beverages like instant coffee. Trung Nguyen's marketing campaigns target young, urban consumers. The company sponsors a number of popular music festivals and television shows.

Increasing Production of Free-Dried Instant Coffee

Freeze-drying involves freezing coffee extract to about –40°C, then cutting it into crystals. Once the granules are frozen, they are then dried at a low temperature using a vacuum. Vietnam is one of the top two coffee-producing countries in the world, according to statistics from the International Coffee Organization. As per the report published by USDA Foreign Agricultural Services, the production of robusta, which is essentially used in freeze-dried instant coffee, was 28,740 thousand 60 kg bags in the year 2022/23 to 30,230 thousand 60 kg bags in the forecast period 2023/24, this growth is anticipated to significantly impact the regional market.

Increasing Accessibility Due to Online Presence

Rising internet penetration, as well as the constantly improving customer experience of online retail channels, is expected to be the major factor contributing to the growth of the online retail industry, which subsequently, is also expected to open up new sales avenues for emerging product categories such as that of instant coffee in the country. The shift of consumer preference to online channels is evident from the e-Conomy SEA 2022 report, which states that e-commerce has been witnessing significant growth at 53%, alongside strong growth across most sectors except for travel. Looking at 2025, the overall e-commerce value will likely reach $104 billion in value, re-accelerating to around 32% compound annual growth rate.

Lam Dong is Expected to Grow Significantly

The prime reason driving the market products in this province is supportive government policy and reducing production at Dak Lak province, which has highlighted the potential of this region. Data from USDA shows that with a reduction in Dak Lak province to produce coffee, the central government is focusing on production in Central Highland, of which Lam Dong has a major area. The government implemented MARD policy, in 2025, to stabilize coffee cultivation in the Central Highland region covering Lam Dong province at 600,000 hectares, which supported the market growth in the province. Da Lat City, Lam Dong province, cultivates 3,000 hectares of coffee and produces 9,000 tons of green coffee. Furthermore, the increasing cultivation of Robusta coffee is another prime factor driving growth in the market.

Key Market Developments

• In January 2023, CCL Products India Ltd anticipates that by the December quarter of 2024–25, its recently announced $50 million freeze-dried coffee factory in Vietnam will be operational. The firm currently produces 30,000 tn of freeze-dried items in Vietnam each year, and it is currently building a new facility there to increase that capacity by 6,000 tn.
• In February 2023, Nestlé Vietnam disclosed an extra $132 million investment. The firm plans to treble the amount of premium coffee lines it can handle while still servicing the local market and exporting its goods to more than 25 nations, including discerning markets like Europe, Japan, and the US.
• In August 2021, a freeze-dried instant coffee mill was built and run by the Louis Dreyfus firm Asia Pte. Ltd. (LDC) and Instanta Sp. z o.o. (Instanta), a multinational private-label coffee firm, in the Vietnamese province of Binh Duong.

Vietnam Instant Coffee Market Scope:

Segmentation:

• By Type
  • Freeze-Dried Instant Coffee
  • Spray-Dried Instant Coffee
  • Others
• By Distribution Channel
  • Offline
    • Retail
    • Food service
  • Online
• By Province
  • Dak Lak
  • Lam Dong
  • Dak Nong
  • Gia Lai
  • Kon Tum
  • Others

1. INTRODUCTION

1.1. Market Definition

1.2. Market Definition

1.3. Scope of the Study

1.4. Market Segmentation

1.5. Currency

1.6. Assumptions

1.7. Base, and Forecast Years Timeline

2. RESEARCH METHODOLOGY  

2.1. Research Data

2.2. Sources

2.3. Research Design

3. EXECUTIVE SUMMARY

3.1. Research Highlights

4. MARKET DYNAMICS

4.1. Market Drivers

4.2. Market Restraints

4.3. Porter’s Five Force Analysis

4.3.1. Bargaining Power of Suppliers

4.3.2. Bargaining Power of Buyers

4.3.3. Threat of New Entrants

4.3.4. Threat of Substitutes

4.3.5. Competitive Rivalry in the Industry

4.4. Industry Value Chain Analysis

5. VIETNAM INSTANT COFFEE MARKET, BY TYPE

5.1. Introduction

5.2. Freeze-Dried Instant Coffee

5.3. Spray-Dried Instant Coffee

5.4. Others

6. VIETNAM INSTANT COFFEE MARKET, BY DISTRIBUTION CHANNEL

6.1. Introduction

6.2. Offline

6.2.1. Retail 

6.2.2. Food service

6.3. Online 

7. VIETNAM INSTANT COFFEE MARKET, BY PROVINCE

7.1. Introduction

7.2. Dak Lak

7.3. Lam Dong

7.4. Dak Nong

7.5. Gia Lai

7.6. Kon Tum

7.7. Others

8. COMPETITIVE ENVIRONMENT AND ANALYSIS

8.1. Major Players and Strategy Analysis

8.2. Emerging Players and Market Lucrativeness

8.3. Mergers, Acquisitions, Agreements, and Collaborations

8.4. Vendor Competitiveness Matrix

9. COMPANY PROFILES

9.1. Nestle

9.2. Tata Coffee Vietnam Company Limited

9.3.  Trung Nguyen

9.4. Vinacafé Bien Hoa JSC

Nestle

Tata Coffee Vietnam Company Limited

Trung Nguyen

Vinacafé Bien Hoa JSC