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Saturday, June 22, 2024

Reputation is more valuable than money

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Discussing the future of Phuc Long after its multimillion-dollar merger and acquisition (M&A) deal with Masan Group, the founder of Phuc Long Tea and Coffee, Lam Boi Minh, shared some intriguing insights about his brainchild. What he shares offers a unique perspective on a brand with a 50-year history.

50 years in the blink of an eye

Only a few know that Lam Boi Minh conceived the idea of establishing Phuc Long in 1968. It was not until the 1980s that the three Phuc Long stores were opened for business on Le Van Sy, Tran Hung Dao, and Mac Thi Buoi streets under his direct management. Throughout its half-century existence, Phuc Long has been a means to realize Minh’s unwavering dedication to serving customers top-notch drinks and preserving the essence of traditional Vietnamese tea and coffee culture.

The business world can be likened to a battlefield. From the 1990s to 2012, the Vietnamese F&B market saw the entry of many renowned global brands, such as Starbucks, Gloria Jean’s Coffees, NYDC, Gong Cha, and Ding Tea. With abundant supply and a highly competitive pricing landscape, the F&B market was more intense than ever during this period. Faced with formidable competition, F&B businesses were compelled to enhance their product quality and services. Rather than merely following in the footsteps of others, Phuc Long Tea & Coffee carved out its own niche in the market by introducing creative drinks to its menu. Peach milk tea, peach tea, and oolong milk tea from Phuc Long became favorites of many customers.

In the F&B market, it is expected to see that many businesses, especially those simply following trends, struggle to stay afloat and are forced to exit the market when their products and services become less attractive. However, Phuc Long Tea & Coffee is an exception. Despite these challenges, the brand has stood firm through half a century and maintained a solid position in the Vietnamese market.

Apart from creativity and meticulous dedication to creating a variety of quality drinks suitable for consumer preferences, what else enabled Phuc Long to grow over time until today?

Lam Boi Minh: Phuc Long’s success is mainly thanks to “passion” and “prestige.” No industry requires as much perseverance and patience as the tea and coffee industry in Vietnam. We tried hundreds of times to create a perfect brewing formula that satisfied all the requirements for color, aroma, appearance, and taste for each type of drink. Moreover, those working in this industry need a deep passion for the art of tea and coffee preparation and must be meticulous in selecting high-quality ingredients. Without a great passion for drink exploration and research, Phuc Long would not have thrived on the market for so long.

Additionally, I firmly believe that reputation is more valuable than money. Building a brand’s prestige may take a lifetime!

Phuc Long is usually mentioned as a massive achievement in your life. After those years of building this tea and coffee chain, what do you think when you reflect on it?

Fifty years is a lifetime, yet it also feels like the blink of an eye to some extent. Before Phuc Long was transferred to Masan Group, we operated more than 70 stores nationwide.  Given customers’ boundless love for Phuc Long, I want to make even greater efforts to further develop this tea and coffee chain.

Of course, everyone wishes for success in their life, but I believe that Phuc Long has its own mission. Vietnamese tea and coffee need to be more widely recognized around the world. In recent years, Vietnam has consistently ranked first or second globally in coffee export and has consistently been among the top 10 countries in tea export. Only a few countries boast tea and coffee of the same high quality as Vietnam. Therefore, we need to find ways to help the younger generations understand more about the culture, quality, and unique identity of Vietnamese products and foster a sense of pride in them.

Furthermore, our traditions and cultures surrounding tea and coffee are on par with those of other nations. So why not seek ways to promote Vietnamese coffee and tea products globally? Although Phuc Long is my lifelong dedication, I cannot keep it for myself. I want to give it the opportunity to thrive not only in Vietnam but also in other countries.

After the M&A deal with Masan Group, a major business in the Vietnamese FMCG industry, what are your expectations for the future of Phuc Long?

Before the merger, Phuc Long had already established a solid presence in the domestic market for half a century. And it served as a foundation for our collaboration.

I developed Phuc Long Tea & Coffee to create both tangible and intangible values for society. Therefore, I hope that what I have built will leave enduring and sustainable values behind. This expectation extends to the collaboration with Masan, relying on the positive values forged by both parties during the M&A deal and for the future prosperity of Phuc Long.

To go far, go together. And Masan Group is a good partner. I trust Masan’s reputation, development strategy, managerial capabilities of leadership, and financial strength.

Have the aspirations you held for your brainchild’s future come to fruition?

Currently, the M&A process has come to its final stage. Although Phuc Long is operating with an experienced team, it is hard to say it is easy to formulate a suitable development strategy in the current tough economic conditions. Nevertheless, I am confident that Masan’s leadership and analysts will devise appropriate solutions. Whenever my partner needs support, I am always ready to accompany them in addressing and overcoming challenges to build a development strategy for Phuc Long.

In today’s economic climate, businesses in the F&B industry are grappling with substantial market challenges. As a business leader in the field, what do you think about this situation?

There is always a business cycle, with its ups and downs. Every challenge we face is an opportunity for growth, especially in the F&B industry. I believe that the Vietnamese F&B market still has much potential for further development. All businesses have equal opportunities to develop; creativity is vital to making a difference. It is also crucial to balance the quality of your produce and its price. Additionally, human resource training and management are vital if your team is not qualified enough, your products cannot meet customers’ strict requirements. More importantly, it is vital to keep learning and stay updated with technology trends to improve service quality day by day.

When developing Phuc Long, I began with simple and small steps, such as learning about tea and coffee. In the 1990s, when coffee machines were still considered luxury items, I was determined to buy one for the store on Mac Thi Buoi Street. From there, I created unique formulas to craft different types of tea and coffee. During the Covid-19 pandemic, I even devised a method to transport drinks to customers with pulleys. If you dare to think and dare to act, opportunities will always emerge in difficult times.

What do you think about the M&A trend’s impacts on businesses in the F&B industry?

M&A is no longer a new trend in this field. Instead, it has been adopted by many businesses for a long time. I am not an expert in providing technical or analytical insights into the M&A impacts on businesses. However, from my perspective, many M&A models and implementation methods exist. The development of M&A models heavily depends on the strategic direction of the parties involved, so those parties need to have detailed discussions and thorough research before coming up with M&A models. Beyond technical factors, M&A agreements must be executed in accordance with current laws and mutual respect. As I mentioned before, reputation is more valuable than money. Together solving problems is critical to ensuring a smooth M&A process and the development of the parties involved.

After half a century grappling with challenges, Phuc Long Tea & Coffee has earned recognition in the domestic market and won the hearts of many customers, from young to middle-aged individuals, from office workers to creative freelancers. When it comes to Phuc Long, the first thing that comes to mind is a place that integrated creative formulas into traditional Vietnamese tea and coffee culture, establishing itself as a trendsetter in HCMC for a long time.

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