A Phúc Long kiosk at a Vinmart+ store in HCM City. — Photo courtesy of Masan
HCM CITY — The Sherpa Company Limited, a subsidiary of Masan Group Corporation, announced on Monday the signing of an agreement to acquire 20 per cent of Phúc Long Heritage Joint Stock Company for US$15 million.
The latter owns Phúc Long, one of the leading tea and coffee brands in Việt Nam.
As part of the transaction, VinCommerce entered into a strategic co-operation agreement with Phúc Long to jointly develop ‘Phúc Long Kiosk’ at more than 2,200 VinMart+ stores nationwide.
Phúc Long Kiosk will bring fresh and delicious tea and coffee drinks to 100 million Vietnamese consumers, playing an important part in converting the VinMart+ stores into a destination that satisfies the daily essential needs of consumers of all ages.
Việt Nam’s tea and coffee market is valued at $2.3 billion and expected to grow by more than 10 per cent a year. But branded tea and coffee retail chains, including popular brands such as Highlands Coffee (over 300 stores), The Coffee House (over 150 stores) and Starbucks (over 70 stores), only account for 25 per cent of the market.
Given a young consumer base that aspires for innovative products and services, both Masan and Phúc Long believe that branded tea and coffee chains will explode in the next decade.
With the trial results of four kiosks in HCM City in the last three months, the two sides are confident of achieving the target of 1,000 Phúc Long Kiosks in the next 18-24 months.
Lâm Bội Minh, founder of Phuc Long Heritage, said, “After 50 years of experience growing and developing the highest quality of tea leaves and coffee beans coupled with relentless innovation and strong passion, the Phúc Long team has created for consumers coffee and tea drinks with unrivalled quality.
“We are proud to have achieved important milestones in our first phase of development - building a network of 82 stores and a Phúc Long brand that is trusted and loved by consumers, especially youths.
“I believe that by partnering with Masan Phúc Long will unlock the next phase of growth and continue to offer Vietnamese consumers high-quality products and delightful experiences in enjoying tea and coffee drinks while making Phúc Long a long-lasting brand for many generations.”
Trương Công Thắng, CEO of VinCommerce, said: “As two Vietnamese power brands who are synergising their strengths, VinMart+ and Phúc Long are proud to serve Vietnamese people by uplifting their material and spiritual lives. Masan deeply appreciates the achievements of Phúc Long, as well as the passion and enthusiasm of its founder Lâm Bội Minh.
“I believe that in combining the Phúc Long products and VinMart+ network of more than 2,200 stores today and 10,000 stores in the next five years, we will provide 100 million Vietnamese consumers with the opportunity to enjoy the freshest, most delicious tea and coffee drinks. With the goal of serving daily essential products that meet ‘The Very Best of Fresh’ standards, we believe that each VinMart+ store will transform into a symbol of modern lifestyle, a destination for all ages, from youths to housewives, across Viêt Nam.
“In the near future we hope to take the Phúc Long tea and coffee brands global, contributing to spreading our cultural identity and promoting the signature drinks of Việt Nam. At the same time this partnership also helps speed up Masan’s strategy to develop the Point of Life consumer ecosystem.”
Under the agreement with VinCommerce, Phúc Long Kiosk will share 20 per cent of its revenues with VinMart+.
If the results of the trial are an indication, the partnership will increase the profit margin for VinMart+ by more than 4 per cent.
Founded in 1968 at Bảo Lộc, the upland famous for its tea, and with its first retail store opened in HCM CIty, Phúc Long began supplying high-quality coffee and tea products in which the traditional Vietnamese taste was preserved and combined with an appealing modern style. — VNS