The Vietnamese retail conglomerate says it will explore international outlet growth for Phuc Long Coffee & Tea from next year after the coffee chain achieved $8.3m profits in 2022
Masan Group said Phuc Long Coffee & Tea achieved sales of VND 1.6tr ($67m) in 2022 | Photo credit: Masan Group
Masan Group has targeted international expansion for Phuc Long Coffee & Tea in 2024 and is seeking for the brand to become the largest coffee and tea chain in Vietnam ‘within a few years’.
To prepare for international expansion, Masan Group said a new CEO for Phuc Long Coffee & Tea with a strong franchising record in the global food and beverage industry will start developing ‘international standardised processes and operating systems’ this year. The CEO has not been announced yet.
Vietnamese retail conglomerate Masan Group, which increased its majority stake in Phuc Long Coffee & Tea to 84% in August 2022, also plans to grow the coffee chain’s domestic footprint in 2023 and expects to increase its revenues by approximately 75% over the next 12 months.
Reporting its full-year 2022 results, Ho Chi Minh City-based Masan Group said Phuc Long Coffee & Tea achieved sales of VND 1.6tr ($67m) and generated profits of VND 195bn ($8.3m).
The strong performance of Phuc Long Coffee & Tea’s flagship stores was cited as the main driver of revenue growth, with the company opening 44 flagship outlets across the last 12 months, and 23 in its fourth quarter alone.
Phuc Long Coffee & Tea now operates 111 flagship stores across Vietnam, alongside 21 smaller format outlets and an expanding kiosk presence in Masan Group’s WIN convenience store network.
Based on the current level of growth, Masan Group expects the coffee chain to become Vietnam's second largest by outlets by the end of June 2023. It is currently the third largest, behind domestic market leaders Highlands Coffee and The Coffee House, which operate 573 and 154 stores respectively.
Looking ahead to the next 12 months, Masan Group expects Phuc Long Coffee & Tea to achieve revenue growth between 58-90% to reach VND 2.5trn ($107m) to VND 3trn ($128m).
Additionally, the company forecasts opening a further 75-90 flagship Phuc Long Coffee & Tea stores in 2023.
Phuc Long Coffee & Tea’s 2022 sales comprised approximately 2% of Masan Group’s total VND 76trn ($3.2bn) revenues, which fell 14% compared to the previous year.
Full-year results for Highlands Coffee and The Coffee House are yet to be published, but both coffee chains were cited as strong performers in their parent companies’ third quarters.
Filipino food company Jollibee Food Corporation credited Highlands Coffee as a standout contributor to its $957m third quarter revenues. The coffee chain opened 37 stores in the period to reach 562 outlets.
Meanwhile, Vietnamese retail group Seedcom announced revenues of VND 1.5trn ($60.5m) in the nine months ended 30 September 2022, driven by the 53% year-on-year sales growth of The Coffee House. The coffee chain’s VND 564bn ($22.7m) revenues represented 37% of Seedcom’s total sales in the period.