Vietnam’s cheap coffee may lose its edge as the EU tightens sustainability rules, Nestlé Vietnam’s chair warns

Nestlé Vietnam's chairman Binu Jacob cautioned that Vietnam's cheap coffee may lose its export appeal as the European Union tightens sustainability rules. Vietnam is the world's second-largest coffee producer and largest robusta producer, which is commonly used in instant coffee. Europe consumes the most coffee, accounting for about 24% of global consumption.

Therefore, the EU's strict new standards could significantly impact Vietnam's coffee exports. Jacob stated that if Vietnam does not improve its coffee's sustainability and move up the value chain, it will struggle to export. The EU's Deforestation Regulation, which takes effect on December 30, 2026, aims to reduce deforestation and greenhouse gas emissions linked to coffee production.

As a result, Hanoi is collaborating with Brussels to meet these compliance requirements. The EU-backed SustainCoffee project supports Vietnam's coffee sector in meeting these standards and indirectly benefits an estimated 1.4 million farmers and workers in the supply chain. Nestlé Vietnam has utilized its global research and development capabilities, partnering with the Western Highlands Agriculture and Forestry Science Institute, to create a coffee plantlet specifically adapted to central Vietnam's soil conditions.

By propagating these plantlets through tissue culture, Nestlé has distributed 100 million disease-resistant plantlets to farmers at subsidized rates. Consequently, Vietnam's coffee productivity is now three times the global average. Jacob views these regulations as an opportunity for Vietnam to advance its coffee industry by transitioning from traditional to regenerative farming practices, which could enhance the country's competitiveness in the global market.