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PhinDeli enters US market on a wave of coffee

PhinDeli enters US market on a wave of coffee

Friday, September 06, 2013, 14:48 GMT+7

They call Wyoming, a state in the western United States “Big Sky Country.” The land is so open and treeless that you can see for many kilometers in any directions. And because of the dry air, the sky stays blue and stretches for hundreds of kilometers. Yes, it is a very big sky.

Wyoming is one of the least populated states but has been home for 170 years to people with business ideas as big as the sky. The first east-west intercontinental railroad was built through Wyoming.  And today people make a living working on cattle and horse ranches that stretch for over hundreds of hectares. 

Is the next big idea in Wyoming Vietnamese coffee?  That is the plan, according to Ho Chi Minh City entrepreneurs who today unveiled the new Wyoming town name of PhinDeli Town Buford on property, an entire town with a population of one, that was purchased in 2012 specifically to launch products made in Vietnam.

This seems very strange. Wyoming has only 576, 000 people who live in 253,340 square kilometers. This is not a big enough market for much of anything. For PhinDeli this is not a problem.

PhinDeli does sit under a big sky but more importantly it lies along a historic transportation route. The Union Pacific rail line started service in 1861 and still runs 1,000 meters from PhinDeli. That railroad became the route for Interstate 80, a highway heavily used 24 hours a day by big commercial trucks and passenger cars. That highway is 1000 meters north of PhinDeli. Exit off the highway and you are immediately at PhinDeli where gas, snacks and Vietnamese coffee waits for you.

The location makes it easy to get to PhinDeli.  But what will make people want to exit the highway and stop at PhinDeli? Curiosity. From highway signs motorist will see that Vietnamese coffee is available. That marketing strategy enjoys the surprise factor, one that the new owner is sure will help launch his brand across the US.

Nguyen Dinh Pham, 38, grew up in Ho Chi Minh City and graduated in economics. He started his professional career in corporate Vietnam, companies like Coca Cola, Nokia and Mars, but found it was too confining. He wanted to pursue his own vision be able to set his own course. He wanted to be an entrepreneur. He wanted to take a chance on his vision.

And his vision started with Buford, Wyoming. When he saw the opportunity last year to buy the town in auction he knew it would be his platform to enter the American market. It was only later that he decided that coffee was the product to launch from Buford.

He changed the town name to match the brand name. He modernized the gas station and small store. But in the store he built his PhinDeli coffee corner. There he sells coffee, provides coffee tasting and sells other Vietnam products.

Motorists will see a colorful wall sized mural, a painting of Vietnamese coffee growers in the field next to Americans enjoying coffee. There they will understand the connection.  And they will have something to tell their friends, in person or on social media.

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Town owner and co-mayor Nguyen Dinh Pham tries on his gift of traditional Wyoming wear (Photo: PhinDeli)

The PhinDeli Corporation has an ambitious distribution plan. It will use PhinDeli Town Buford as the physical retail store for coffee sales. But the product will also be sold on Amazon.com, where sales and shipping are done somewhere else. PhinDeli Corporation also hopes to place its coffee in supermarkets, where it hopes there will be room in the market for a new, Vietnamese-branded coffee.

Coffee is the second largest export out of Vietnam. The climate and soil are good for Robusta and Arabica coffee bean growth. But until now those beans were sold only as a commodity, where they are ground with other beans or additives to make several brands of ordinary American-branded coffee. This is different. PhinDeli wants to grow coffee and sell it in the US branded as Vietnamese coffee.

The entrepreneurial PhinDeli team was able to organize the supply chain for the coffee and plan the public relations campaign in only six months, leading up to today’s ceremony. Once PhinDeli’s coffee brand is established, the company sees future opportunity to export into the American market other consumer products. Coffee just leads the way since the US coffee drinking population is big, 150 million coffee drinkers big.

Yes there are challenges. First is price. PhinDeli must sell coffee at competitive prices, especially if it is being branded as premium coffee. After that, the challenge is in keeping the business venture sustainable. And if the hope is on internet sales, then the supply chain from coffee production to consumption has to stay efficient. Americans have high expectations for immediate delivery. Product reputation can be destroyed if product delivery takes a long time.

And PhinDeli Town Buford is in a part of the US that during the winter will get terrible snow blizzards, something no Vietnamese can understand. Keeping the store’s door open during these blizzards will be a big but important job.

Do memories of the American War help or hurt PhinDeli and the Vietnamese brand? Time helps heal most but not all wounds. Almost 40 years have passed and the war’s history is a fading memory for many. And today the image of Vietnam is different for a younger generation of Americans. Coffee drinkers between 20 and 40 have no experience with the war. When they hear the name Vietnam they think vacations, beaches and good food found at thousands of Vietnamese restaurants in the US.  Foreign trade has replaced foreign relations.

The establishment of PhinDeli is an early example of direct foreign investment into the US and an early venture of Vietnamese branded imports meant for more than just the 1.5 million Vietnamese Americans. That is what makes this news.

Today’s town renaming and store grand opening was attended by curious Vietnamese, curious ranching families and a host of international press. The press was there because it was so unusual. From a public relations perspective, no other grand opening can get better publicity unless one is willing to buy a town to do it.

Like any entrepreneur, Nguyen Dinh Pham knows that PhinDeli is risky. But he has the impressive Vietnamese energy and business expertise to do what he needs to. Yes, only the market will determine if he is a success. But powered by coffee, he is putting all his energy into making PhinDeli a success.

Written by Kip Cheroutes, Lecturer, University of Denver

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Kip Cheroutes

Kip Cheroutes

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