Success thanks to special "formula" and strategy

Vinacacao CEO Tran Van Lieng: Success thanks to special "formula" and strategy

After twenty years of perseverance and effort in building and positioning the brand, Mr. Tran Van Lieng has brought the Vinacacao brand to 20 countries, accounting for 80% of the market share of finished cocoa products in Vietnam. That success comes from a special “formula” and a different strategy.

Businessman Tran Van Lieng, Founder, Chairman of the Board of Directors of Vinacacao.

  Choose your own path

Not selling raw cocoa beans, businessman Tran Van Lieng chose his own path from the very beginning, which is to process finished products from cocoa beans.

Inviting us to enjoy a cup of hot cocoa, Mr. Lieng shared the story of how he came to this industry and the ups and downs he experienced. He said that since he was young, he always wanted to do something useful for the country's agricultural sector. In a conversation with a close friend, he learned that at that time, the Government encouraged businesses to produce finished cocoa products for consumption, not simply grow cocoa trees and sell raw products to foreign countries.

With his business acumen, Mr. Lieng realized that this was a great opportunity to enter the market. Europeans love chocolate, not only because of its nutritional value, but also because of the special layers of flavor in cocoa beans (the main ingredient in making chocolate) that few other beans have. The market potential is huge, however, Vietnam grows a lot of cocoa but only sells it raw, so it cannot maximize profits.

Thinking is doing, in 2004, Mr. Lieng decided to leave his position as branch director of an Australian investment fund in Vietnam to establish Thanh Phat Cacao Company (the predecessor of Vietnam Cacao Joint Stock Company - Vinacacao) with his friend.

Not only is he a shrewd businessman with strategic vision, Mr. Tran Van Lieng is also very dedicated to training human resources, especially young workers. He finds talented people in many ways, such as inviting young people to the Company to share ideas, even giving budgets to distributors to recruit employees...

In particular, Vinacacao always provides equal opportunities for employees, such as creating job opportunities for the visually impaired and young entrepreneurs. The company has a telesale department (product introduction and sales via phone) specifically for the visually impaired.

The opportunity that brought Mr. Lieng to cocoa was partly due to his “agricultural blood” that he already had. After graduating from university (in 1989), he worked in the rice sector for 10 years and in 1998, he officially took on the position of General Director of the Vietnam - US Rice Joint Venture in the Mekong Delta.

“In the early 2000s, when the economy opened up, Vietnam's rice industry was very prosperous. Our country was among the top rice exporting countries in the world, but rice businesses also encountered many difficulties in applying for quotas (export quotas)... I left this field in 2002 to pursue finance, then chose to stick with cocoa,” Mr. Lieng recalled.

Having graduated from university with a major in English, along with the experience accumulated from working in the financial sector, Mr. Tran Van Lieng quickly approached and connected with foreign partners right in Vietnam. In 2005, after only 1 year of establishment, Thanh Phat Cocoa Company's products appeared on the shelves of the Co.opmart supermarket system.

In 2007, businessman Tran Van Lieng officially established Vietnam Cacao Joint Stock Company (Vinacacao), as one of the first to enter the professional chocolate production. In addition to Co.opmart, Vinacacao products are also introduced into the store systems of major brands such as Starbucks, Lotte, Big C, Satra, etc.

“The biggest difficulty we encountered in the beginning was that no one knew what cocoa was, some even confused cocoa with barley. Vietnam grows a lot of cocoa, but consumers only remember and choose to buy chocolate products from foreign brands,” said the founder of Vinacacao.

The journey to build Vinacacao also went through many ups and downs. Mr. Lieng said that during the global economic crisis in 2008, Vinacacao was at risk of disbanding when some shareholders withdrew their capital. He and his colleagues had to organize many shareholder meetings to find solutions to increase capital; pooled savings, sold personal assets to invest in the business, and shared capital with each other...

“At that time, cocoa was not yet classified as a commodity with price and interest rate support. Market purchasing power was weak due to the unstable world economy; cocoa was also not an essential product, so domestic consumption was limited, but businesses were lucky to overcome it,” the businessman born in 1968 confided.

“Standing on the shoulders of giants” strategy

When it comes to chocolate, consumers often think of and choose foreign brands. However, in recent years, some foreign newspapers and news agencies such as the New York Times, Bloomberg, and Nikkei have begun to praise the quality of some “made in Vietnam” chocolate products.

Mr. Lieng said that Vietnamese cocoa was classified as “premium” by the International Cocoa Organization in 2015 thanks to its fruity flavor and mild acidity. This factor has helped Vietnamese cocoa become increasingly popular and exported to many countries around the world.

“Vietnamese enterprises are hundreds of years behind in the cocoa processing industry, but being behind is also an advantage, because they can learn, approach, and cooperate with experienced enterprises,” Mr. Lieng shared.

The Chairman of Vinacacao emphasized that the important factor in processing high-quality cocoa products to win customers does not lie in modern machinery or high standards, but in the experience and formula of each enterprise. Mr. Lieng compared that processing cocoa products is like making cakes, with the same type of flour, but whose formula is more special, will make more attractive cakes and win the hearts of customers.

Up to now, Vinacacao has connected and supplied raw materials to big names such as Starbucks, Lotte... as a manufacturer. This is the leverage for Vinacacao to increase brand recognition and value positioning. With his negotiation experience, the Chairman of Vinacacao has requested these big brands to clearly state information about the manufacturer, Vinacacao, on the products sold.

“At first, many partners did not agree, because they were too big, and our business was small. But I analyzed to show them that if there was a problem with the product that affected the health of the user, who would be responsible? If we were not co-branded, we would not be responsible. After listening to this analysis, the partners agreed. Standing on the shoulders of giants is how Vinacacao positions its brand value,” Mr. Lieng proudly said.

Expand bilateral cooperation

Over the past twenty years, businessman Tran Van Lieng and his team have always been persistent in their initial orientation of focusing on the segment of deeply processed cocoa products. In terms of export channels, Vinacacao products are now present in 20 countries around the world, the largest market being the US, followed by Korea, Malaysia, etc. Domestically, Vinacacao accounts for 80% of the market share of cocoa products.

According to Mr. Lieng, the Vietnamese chocolate industry is currently worth about 250 million USD, only reaching about 10% of its potential value when considering the size of the population and the number of people in the middle class. The world chocolate market is estimated at about 57 billion USD. If Vietnam fully exploits its market potential, it can account for 2.4% of the world market share, reaching about 1.36 billion USD.

Despite boosting exports, Vinacacao does not neglect the domestic market, and even has certain priorities to exploit available space and potential. With a strategic vision, Mr. Lieng wants Vinacacao's business picture to be harmonious, with many highlights and the enterprise must proactively respond to market movements.

At the end of 2023, the Chairman of Vinacacao decided to pioneer the MTA model when signing a cooperation agreement with Libeert, a 100-year-old high-end chocolate manufacturer in Belgium. MTA is a two-way trade business model, based on the principle of "buying to sell and selling to buy", a method of cooperation between two partners from two different countries. They exchange markets to support each other in penetrating and developing distribution systems in each other's country, aiming to bring products closer to consumers.

Cooperating with a reputable enterprise in the world's leading country in terms of production capacity and chocolate quality is considered a smart move in the strategy to bring the Vinacacao brand into the potential European market in the near future.

In the domestic market, the cooperation agreement with Libeert also helps Vinacacao continue to affirm its position. Currently, the enterprise has more than 5,000 distribution points in 63 provinces and cities nationwide.

Mr. Lieng shared that the MTA model is new, but the implementation process of Vinacacao is bringing positive results. Vinacacao will replicate this model and is negotiating with a Korean partner. Korea has many businesses with rich experience in processing and manufacturing and is also a market with high demand for cocoa processed products, especially chocolate. Therefore, if the negotiation is successful, the production and business activities of both businesses have a lot of prospects.

Source: https://baodautu.vn/ceo-vinacacao-tran-van-lieng-thanh-cong-nho-cong-thuc-va-chien-luoc-dac-biet-d217625.html