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Today in the morning we went to the offices of Highlands Coffee which is sort of the Vietnamese version of Starbucks. They gave us an interesting presentation about their business model and how they deal with competition. They also talked about how they were trying to create demand in a market that is very heavily saturated. Before the economic reforms the government found that some land in the central highlands is good for growing coffee. So although there was no excess demand they started to produce coffee. At the time one ton of coffee costed $1000 to produce but it sold for $1200-1300. As soon as the coffee production hit full swing the market price dropped to about $400. Most other independent growers outside of the country exited the business because the same ton of coffee still cost them $1000 to produce. However, the government told the Vietnamese growers they weren't allowed to exit the market. As a result nearly all coffee produced was from Vietnam, the same ton of coffee that cost $1000 to produce was now selling for $2000. The Highlands Coffee representative said that they believe that that was an accident on the part of the government, but it paid off. As it stands 70% of all coffee produced is from Vietnam. Interesting story!
Viet Thai corporation owns 13 brand franchises and they own a Hard Rock cafe franchise as well. After our Highlands Coffee presentation and Q&A session the representatives took us to the Hard Rock cafe. We talked to the manager a bit and we concluded with a lunch that was on the house! American food was nice except I once again felt sick after eating it, yuck. Trân liked her first set of wings ever and her first chicken fingers. They also had Heinz ketchup which we were collectively quite proud of. I told Trân that it was from Pittsburgh and that it was the best ketchup around!
Next stop, the war remnants museum.
An American Tank