Vietnam’s cheap coffee exports could become less attractive as the European Union introduces stricter sustainability requirements, the chairman and managing director of Nestlé Vietnam has warned.
Binu Jacob made the comments at the Fortune Southeast Asia 500 Summit in Ho Chi Minh City on November 3, saying Vietnamese producers would need to improve the value and environmental credentials of their coffee to retain access to the European market.
“Vietnam was always known to produce cheap coffee, but cheap coffee is no longer going to be attractive to export because [the] EU is coming up with very stringent norms,” Mr Jacob said. “So if we don’t go up the value chain and create coffee that is sustainable and that meets the very high standards, we will be unable to export.”
Vietnam is the world’s second-largest coffee producer and the leading producer of robusta, the variety widely used in instant coffee. Europe accounts for about 24% of global coffee consumption, making the bloc’s requirements particularly significant for exporters.
The EU Deforestation Regulation is due to apply to most companies from December 30, 2026, while some smaller businesses will have until later in 2027 to comply. The rules are intended to limit deforestation and forest degradation associated with certain commodities, as well as the EU’s contribution to greenhouse gas emissions and biodiversity loss.
Hanoi is working with Brussels on the requirements through the EU-backed SustainCoffee project. The multi-year initiative is intended to help Vietnam’s coffee industry meet international environmental, social and governance standards, support more than 400 coffee-related businesses and indirectly benefit an estimated 1.4 million farmers and supply-chain workers.
Nestlé has also worked with the Western Highlands Agriculture and Forestry Science Institute to develop a coffee plantlet suited to soil conditions in Vietnam’s Central Highlands, Mr Jacob said. The company propagates the plants using tissue culture, allowing thousands of trees to be produced from a single leaf.
Mr Jacob said Nestlé had produced 100 million disease-resistant plantlets over the past 15 years and distributed them to farmers across central Vietnam at subsidised rates. He said coffee productivity and yields in the country were now three times the global average.
He described the EU’s sustainability rules as an opportunity for Vietnam to move up the value chain, arguing that small farms could shift from traditional methods to regenerative agriculture. That, he said, would strengthen the country’s ability to export while keeping more value within Vietnam.
