Selecting the right partner marks a pivotal step forward for the potential growth and extended reach of Phuc Long, as affirmed by its founder, Mr. Lam Boi Minh. Over the past 50 years, amidst numerous challenges, Minh’s aspiration has been not only to establish Phuc Long as a top-of-mind coffee and tea brand for the Vietnamese but also to ensure a “spiritual legacy” for generations to come. With more than five decades under its belt, Phuc Long, under new management, anticipates thriving in the next phase. Minh compares mergers to marriages, emphasizing the critical role of finding the right partner to determine the brand’s mission in the local market and foster success globally.
Strategic Shift
Prior to the merger and acquisition (M&A), Phuc Long Coffee & Tea boasted over 70 flagship stores in major cities, enjoying nationwide brand recognition. The company refrained from franchising to maintain control over product quality. According to Mr. Minh, a robust foundation was laid, leveraging Vietnam’s rich coffee and tea culture to attract a younger customer base.
To preserve core values and enhance performance, Minh insisted on handing over the beverage chain to a partner with stronger capabilities and financial resources. Post-M&A, the Masan Group aims to position Phuc Long Heritage as Vietnam’s leading coffee and tea retail brand in the next few years. Aggressively expanding the Phuc Long kiosk/mini model within its supermarket chain since 2021, Masan saw a restructuring of outlet numbers, leading to a 33% surge in Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in the third quarter of 2023. The company plans to scale up Phuc Long’s flagship stores to 147 outlets this year, with a goal of opening eleven more by year-end.
Optimism for the Future
Despite challenges, Mr. Minh remains optimistic about his partner’s ability to navigate the F&B chain. With Phuc Long Heritage now under the management of an experienced team, he acknowledges the complexity of devising a suitable strategy in current market conditions but trusts in their precision.
Looking ahead, Mr. Minh expresses his commitment to supporting the team in overcoming challenges and building growth strategies for Phuc Long Heritage. Recognizing Vietnam’s prominence in coffee and tea exports, he emphasizes the need for F&B brands to innovate and create products that align with local culture and consumer preferences to stay competitive.
Phuc Long Heritage, in its next stage, should focus on entering new markets while prioritizing internal operations and product research and development (R&D) to ensure quality before aggressive expansion. Mr. Minh echoes the sentiment that, regardless of technological advancements, human resources management and training remain crucial for success, aligning with the vision of sustainable growth. The journey ahead holds promise for Phuc Long Coffee & Tea, guided by a strategic partnership and a shared commitment to excellence and sustainable growth.
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