Table of Contents

A. INTRODUCTION ......................................................................................... 3
B. COMPANY OVERVIEW AND EXPORT PLAN: ..................................... 3
I. Company overview: .................................................................................. 3
1. Vision & Mission: ................................................................................. 3
2. Product portfolio:................................................................................... 4
3. Company’s goals and export experiences: ............................................ 4
II. Selecting potential product of AEROCO ................................................. 4
1. Product introduction: ............................................................................. 4
2. Dimensions of the product .................................................................... 5
3. Strengths of exporting Arabica green coffee beans .............................. 7
4. Potential of AEROCO farm for growing coffee beans ......................... 8
5. Certificates of AEROCO about Arabica green coffee beans: ............... 8
III. Analysis of potential market: EU and Germany ...................................... 9
1. Reason for choosing EU market:........................................................... 9
2. Reason for choosing German market .................................................... 9
3. CHOOSING TARGET SEGMENT .................................................... 22
IV. Adapt product to the market ................................................................... 22
1. Mandatory adaptation: ......................................................................... 22
2. Voluntary adaptation: .......................................................................... 25
V. Distribution channel ............................................................................... 27
VI. Export promotional tool: ........................................................................ 29
1. Media Message .................................................................................... 29
2. Marketing Strategy .............................................................................. 29
C. CONCLUSION ........................................................................................... 32
 Table of Figures
Figure 1 Product image: Arabica green coffee beans ................................................................. 4
Figure 2 Package in PP bag inside with plastic bag ................................................................... 6
Figure 3 Arabica green beans THA1 .......................................................................................... 6
Figure 4 Trademark .................................................................................................................... 7
Figure 5 AEROCO's Processing area ......................................................................................... 8
Figure 6 Main European importers of green coffee from producing countries ........................ 11
Figure 7 Risk for Export Transactions and Direct Investments in Germany ........................... 12
Figure 8 GDP growth rate of Germany .................................................................................... 13
Figure 9 List of European countries by population .................................................................. 15
Figure 10 Espenses and wage in Germany ............................................................................... 18
Figure 11 GNI index of Germany (2021) ................................. Error! Bookmark not defined.
Figure 12 Age structure of Germany ........................................ Error! Bookmark not defined.
Figure 13 Location of Germany in EU ..................................................................................... 20
Figure 14 Example for adaption ............................................................................................... 25
Figure 15 The evaluation of cultural indicators according to the Hofstede cultural model ..... 28
Figure 16 Share of respondents ................................................................................................ 30
Figure 17 AEROCO website .................................................................................................... 30
Figure 18 AEROCO facebook account .................................................................................... 31
Figure 19 VN coffee exporters and Geran coffee importers .... Error! Bookmark not defined.

A. INTRODUCTION
The EU market accounts for 40 percent of the total volume and 38 percent of the total coffee
export turnover of Vietnam. The average value of coffee exports to the EU has reached up to
$1.4 billion per year in the last five years. Moreover, Vietnam’s exports to the EU mainly focus
on unroasted and decaffeinated coffee, with a volume of approximately 482,000 tons, worth
$838 million in the 11 months of 2021, down 12.8 percent in volume and 1.2 percent in value
over the same period in 2020. This leads to the fact that the European market has become one
of the most potential markets for Vietnamese coffee companies who want to expand their
market internationally. Aeroco is not an exception. That is the reason why our company
developed this plan. In the next parts, we would analyze the market to choose the most potential
product as well as decide which country would be the most appropriate to export our product
to. Besides, our company also tries to build a suitable distribution channel and promotion
strategy to maximize the profit along with minimizing the risk when exporting a product to a
new foreign market.

B. COMPANY OVERVIEW AND EXPORT PLAN:

I. Company overview:
1. Vision & Mission:
• Vision:

- Aeroco produces high quality and specialty coffee

- To make Vietnamese high quality and specialty coffee known all over the world

• Mission:

- Cooperate with and educate farmers on safe and clean farming

- Aeroco coffee is 100% natural. Only organic fertilizers are used at Aeroco farm and no
pesticides.

- Aeroco farm utilizes closed & scientific end-to-end processes, as per international standards,
to ensure only the highest quality coffee is produced.

- Slogan: “Aeroco - we make coffee, simply coffee!”

2. Product portfolio:
- Green Coffee Beans (Robusta beans and Arabica beans) – HS code: 090111

- Roasted Coffee Beans (Robusta beans and Arabica beans) – HS code: 090112

- Ground coffee (Mix Robusta and Arabica)

3. Company’s goals and export experiences:

- While our company keep produce coffee for domestic market, we still invest in R&D activities
(learning, developing, and researching methods and technology to improve the quality of
coffee) and simultaneously produce a product that meets the international standard

- This action is to take Vietnamese coffee across the globe

- From the beginning of establishing of the company, we desire to expand our market share in
both domestic and foreign market

- Export experiences: AEROCO's products currently have been exported to Hungary. In

addition, our company has also made an offer for importers in Japan, New Zealand, Korea, and
France.

II. Selecting potential product of AEROCO

1. Product introduction:
Green coffee beans are the raw seeds
of coffee cherries. Arabica green
coffee beans, also known as tea coffee,
is usually grown at altitudes of 1000m
or more. Arabica coffee is loved for its
aromatic flavor, special aftertaste, less
bitter, and elegant taste.

HS code: 090111 (Unroasted and

decaffeinated coffee)

Figure 1 Product image: Arabica green coffee beans

 Parameters ARABICA – THA1

Type THA1

Processing method Dried fruit (1 month)

Moisture ≤12.5%

Size 15-16

Season New crop season

Altitude 1,200 – 1,500m

Farm area Kontum farming area, Vietnam

Store in Cool store < 25 cel. degree

Density 720 – 725g/l

Caffeine content <1.0% /100g

MOQ 10 kg

Factory price 600,000 VND/1 kg

2. Dimensions of the product

2.1 Physical core:
❖ Functional features:

• Coffee is a catalyst for work spirit

Coffee is a beloved beverage known for its ability to fine-tune the focus and boost energy levels
every morning in Western culture

• Increasing metabolism in the body:

A cup of Arabica coffee can help increase the metabolic rate by 16% in our body, burning
calories faster which can help you lose weight. In addition, drinking Arabica coffee without
sugar makes the digestive, excretory, and circulatory systems are also more active
 • Help to fight cancer diseases

Help you fight cancer disease: Arabica coffee contains antioxidants that have the ability to fight
the development of cancer and the most noticeable effect on liver cancer, cervical cancer or
skin cancer in women. You can improve your risk of cancer by 40% if you drink 2 cups of
unsweetened coffee a day.

• Prevent aging and protect dental health

Arabica coffee contains substances that have strong antioxidant effects. As a result, the habit of
drinking Arabica coffee will prevent the aging process and help you stay younger longer. In
addition, polyphenols in coffee can partially dissolve tartar and kill some harmful bacteria.

2.2 Product package:

❖ Package:

Figure 2 Package in PP bag inside with plastic bag

Green coffee beans will be packed according to the specified size and quantity variation of
60kg/bag. In addition, Aeroco company also provides retail bags with 30kg/bag

Bag material: jute sack or PP bag inside with a plastic bag

❖ Brand name:

❖ Trademark:
Figure 3 Arabica green beans THA1
 Figure 4 Trademark
2.3 Auxiliary services:
• A return and refund policy
In the rare case that the product you receive is defective, damaged, or not as described, we are
committed to protecting our customers with the following return and warranty policy:

+ If Delivered goods are broken, have mistaken content, or missing, the shop will bear the entire
cost of return.

+ For other cases, all shipping costs are borne by the customer

+ Customers are entitled to return the product and receive 100% of the amount paid in cash at
the store or by bank transfer if the customer buys Online if the shop determines the error.

• Next purchase discount

Offer a discount on the next purchase to first-time customers buying your products with a
specific number

3. Strengths of exporting Arabica green coffee beans

3.1 Compare to Robusta green coffee beans
• Flavor: While Vietnamese people prefer strong, bitter Robusta coffee when brewed
with filter and added condensed milk, foreign people prefer Arabica coffee with a lighter
and sour taste.

=> Arabica coffee can relatively meet the world demand with its taste compared to Robusta
coffee

3.2 Compare to roasted/processed coffee beans

• Storage and export
One of the advantages of selling green coffee beans for export is their ability to better preserve
the flavors and aromas of the beans, allowing for longer storage life and transport over great
distances.
 • Coffee quality
Grading: the evaluation of coffee’s color, classification, screen size, number of defects, and
visual aspects is only possible with green beans. The smell of green coffee offers the first hints
of the final quality of the beverage.

Prior to roasting, it is also possible to visually identify the post-harvest processing to which the
coffee has undergone. Appearance is an important indicator of the quality of a lot and is related
to the complexity, body, intensity, acidity, uniformity, and sweetness of a coffee.

Dry-processed (natural) coffees are distinguished by a central brown skin and a green bean,
while wet-processed (washed) coffees tend to have a silver skin and a bluish color. A uniform
color both denotes a good appearance and serves as a reliable indicator of the quality of the
drying process.

• Variety of roasts
Once they reach their markets, green coffee beans can be subjected to many different roasting
styles. Light, medium, or dark roasts—coffee preferences vary from country to country, region
to region, and person to person! The level of roasting can highlight or conceal the properties of
the selected coffee beans.

Proper roasting brings out the best flavors, aromas, and acidity of each coffee. Regardless of
how they are roasted, our green Arabica coffees combine natural Vietnamese aromas and
exceptional flavors with internationally recognized certifications.

4. Potential of AEROCO farm for growing coffee beans

At AEROCO Coffee farm, we apply the management process from planting, tending, and
harvesting. We also cooperate with farmers who do not use pesticides; take care of coffee trees
in favor of organic, take advantage of available organic sources in the garden, and using
biological products to enhance soil fertility and be environmentally friendly.

Figure 5 AEROCO's Processing area

5. Certificates of AEROCO about Arabica green coffee beans:
In addition to complying with the regulations of the Rainforest Alliance, ISO 22000, HACCP
Codex Alimentarius, and FDA (USA) certification, we are proud to have achieved Arabica
Champion (2020), Best favorite Arabica (Most favorite Arabica 2020) at Vietnam Amazing
Cup 2020.

III. Analysis of potential market: EU and Germany

1. Reason for choosing EU market:
• TARIFF:

+ With the commitment to eliminate tariffs under EVFTA, coffee exported to the EU will have
93% tax lines to 0% as soon as the Agreement comes into effect. Therefore, EVFTA is entering
the implementation phase in the third year with more extensive tariff commitments, which will
contribute positively to Vietnam's coffee exports to the European Union.

=> The EVFTA Agreement is expected to help Vietnam regain its position and market share in
the EU in the near future.

• MARKET:

+The EU is the world's largest coffee consuming market and is considered a potential market
for coffee exporting countries, including Vietnam, with imports from non-EU countries about
10 billion USD/year, accounting for 66% of imports and about 30% of global consumption.

+ In addition, according to the International Trade Center (ITC), the EU accounts for 47-49%
of the total value of global coffee imports in the 2017 - 2021 period with an average growth
rate of 3.7%/year, turnover reaching USD 15.7 billion/year. In particular, EU coffee imports
are on the rise, reaching USD 17.3 billion in 2021, the highest since 2011.

• DEMAND:

Europe accounted for 33% of global coffee consumption in 2020/21, amounting to an estimated
3.244 million tonnes of coffee. This makes Europe the largest coffee market in the world.

Between 2017/18 and 2020/21, Europe’s coffee market is expected to increase only slightly at
an average annual rate of 0.5% in volume. In general, demand in Europe is expected to remain
stable in the long term, as the European coffee market is saturated. Nevertheless, consumer
demand for specifically higher-quality coffees is expected to increase in Europe.

2. Reason for choosing German market

Dimensions Indicators

TRADE INDICATOR • Value of imports for the last full year

• Volume of imports for the last full year • Unit

value

• Annual growth rate in value over the previous 5

years (%)

• Annual growth rate in volume over the previous

5 years (%)

• Share in world imports

• Concentration of supplier countries

Macroeconomic and political data • Country risk

• Political risk

• GDP

• GDP per capita

• Economic development

• Market size

Purchasing power • CPI

• Minimum salary

• Average salary

• GINI index

Demographic • Germany population density

• Age structure

Geography and Transport • Geography

• Transport

Taste • Taste and consumption trends

 2.1 TRADE INDICATOR

Figure 6 Main European importers of green coffee from producing countries

European importers sourced approximately 87% of their green coffee beans directly from
producing countries in 2020, corresponding to 3.1 million tons. The largest direct importers
from producing countries are Germany (35% of total European imports) and the second is Italy
(18%). This is the reason why we choose two countries to consider the potential of exporting
coffee.

The goal of the business is to achieve great profits and bring customers high quality products.
Therefore, when choosing a target market, the markets that appreciate the product will be the
most potential markets. In other words, markets have high unit value and growth in value is
greater than growth in quantity (when the market has a higher value growth rate than the
quantity growth rate, it means that the product will cost more in the future and bring a greater
profit to the business) will be the first choice. Based on Trademap data, for HS code 090111,
there is an overview of target markets (with high unit value product and high value growth rate,
growth in value greater than growth in quantity) as follows:

4 Value Quantity Unit value Annual Annual Share Concentration

countries imported imported (USD/unit) growth growth in of supplying
of EU in 2021 in 2021 in value in world countries
imported (USD between quantity import
most thousand) 2017- between s (%
from 2021 2017-
Vietnam (%) 2021 (%)

Germany 3,238,322 1,109,980 2,917 1 0 14.8 0.19

Italy 1,448,974 617,212 2,348 -3 1 6.6 0.16

By using Trade map we can see Germany and Italy are two countries which have the most
imported value for the product HS code 090111.

*Germany
In the EU market, Germany is the largest market where the value imported for this product to
Germany in 2021 is approximately 3 million $.

*Italy
Whereas, Italy is the second largest market, following Germany, but the value imported is only
half compared to Germany. The imported value of this product in 2021 is nearly 1,5 million $

=>So, we prefer Germany to Italy. In Germany, the annual growth in value and quantity didn't
show a considerable increase trend. Still, the unit value is quite high, the economy is strong,
and the share in world imports (14.8%) is the higher one, this is the reason why we choose
Germany as one of our potential markets.

2.2 Macroeconomic and political data

a) Country risks and political risks:

Figure 7
Risk for Export Transactions and Direct Investments in Germany

Figure 8 Risk for Export Transactions and Direct Investments in Italy

 • About export transactions:

Country risks are risks in investing in a particular country, but with an uncertain level of
coverage that can lead to economic loss for investors. This can positively impact Vietnam's
finances when exporting coffee to these two countries. However, we have to pay attention to
high commerce risk since business environment risk is about E.

• About direct investment:

Political risks, expropriation risk, and currency inconvertibility and transfer restriction risk are
also on low level (1/7) in Germany and Italy
=> This can minimize the situation that threatens export markets, production conditions, or
makes it difficult for investors to repatriate profits. In addition, we will also spend less time
solving those problems.

b) GDP and GDP per capita

b.1) GDP

Figure 9 GDP growth rate of Germany and Italy

*Germany: The German economy is the fourth-largest in the world with a GDP of $4.0
trillion. Germany’s highly developed social market economy is Europe’s largest and strongest
economy and has one of the most skilled workforces. According to the International Monetary
Fund, Germany accounted for 28% of the euro area economy.

*Italy: With a nominal GDP of $1.99 trillion, Italy is the eighth-largest economy in the world.
Unfortunately, Italy is experiencing a relatively high unemployment rate of 9.7% and a debt at
132% of GDP. Italy’s exports are helping to recover the economy. Italy has a significant trade
surplus from exporting machinery, vehicles, food, clothing, luxury goods, and more.
=> By comparing the GDPs of Germany and Italy, we give priority to Germany for the selection
of export markets for our products. Italy is promoting exports for economic recovery so we will
probably need a lot of competition to capture this market.

b.2) GDP PER CAPITAL

Figure 10 GDP per capital of Germany and Italy

Italy has a GDP per capita of $35,625 as of 2021, while in Germany, the GDP per capita is
$51,238 as of 2021.
=> We can see that Germany has GDP per capita much more than Italy. Gross Domestic Product
(GDP) per capita shows a country's GDP divided by its total population. Therefore, Germany
is a potential market to do business with, compare to Italy
c) Economic development of Germany
Germany
• Level of development: Developed country
• The economy of Germany is a highly developed social market economy. It has the
largest national economy in Europe, the fourth-largest by nominal GDP in the world,
and fifth by GDP (PPP).
Italy
• Level of development: Developed country
• The economy of Italy is a highly developed social market economy. It is the third-largest
national economy in the European Union, the 10th-largest in the world by nominal GDP,
and the 12th-largest by GDP (PPP).
=>Both Germany and Italy are developed economies. However, Germany is still slightly ahead
of Italy in terms of economic size. This is an advantage when we choose to export to a country
with economic potential, we will be less risky, but also more competitive.

d) Market size
d.1) Population:

The most populous European country is Russia, with a population of 145 million. Turkey,
with a population of 84 million, straddles both Europe and Asia, with most of its population
living within its Asian part; though within its territory in Europe, some one-tenth of its
population is situated. Excluding Turkey, Germany is the second-most populous country in
the continent, with a population of about 83 million. Whereas, the population of Italy is
about 59 million and is the fifth-most populous country in EU

Figure 11 List of European countries by population

d.2) Population change

Figure 12 Population change of Italy

Figure 13 Population change of Germany

Moreover, considering the population change, from 2015-2020, the trend of the population size
in Germany and Italy differ considerably. Whereas Germany illustrates an increase in the
population over the 2015-2020 period, Italy shows a decrease trend. In Germany, the population
change has increased steadily over the years, which has shown a steady increase in the demand
for coffee products, thereby increasing the potential of exporting coffee to this country.

d.3) Population density

The total land area is 348,560 km2 and the population density in Germany is 240 per km2 .
Germany has 76.3 % of the population which is urban (63,930,305 people in 2020)

Figure 14 Population density of Germany

With a total land area of 294,152 km2, the population density of Italy is 205 persons/km2, with
69,50% of the population living in urban areas (42.006.701 people in 2020).

Figure 15 Population density of Italy

=>Since the population of Italy is significantly less than that of Germany, the population density
is also higher than that of Italy. As we all know, the greater the population density, the higher
the concentration of population. If the population concentration is high, the demand for goods
will be more. Therefore, the consumption of coffee products will be greater. In terms of
population density, Germany has a much better advantage than Italy to develop a business
career.

Especially, Germany is the largest importer of green coffee beans in Europe. In 2021, Germany
accounted for 34% of total European imports sourced directly from producing countries, an
approximate 1.1 million tonnes valued at €2.6 billion. Total import volumes remained stable
between 2017 and 2021 on average, growing at an average rate of 0.3% annually.

2.3 PURCHASING POWER:

a) CPI

Figure 16 CPI of Germany

Consumer Price Index CPI in Germany is expected to be 120.54 points by the end of this
quarter, according to Trading Economics global macro models and analysts’ expectations. In
the long-term, the Germany Consumer Price Index (CPI) is projected to trend around 128.98
points in 2023 and 133.63 points in 2024, according to our econometric models.
 Figure 17 CPI of Italy
-Consumer Price Index CPI in Italy is expected to be 117.31 points by the end of this quarter,
according to Trading Economics global macro models and analysts’ expectations. In the long-
term, the Italy Consumer Price Index (CPI) is projected to trend around 121.07 points in 2023
and 123.25 points in 2024, according to our econometric models.

=>The Consumer Price (CPI) is a measure of the average change over time in the prices paid
by urban consumers for a market basket of consumer goods and services. The higher the CPI,
the higher the average spending. Germany’s CPI is higher than Italy's, so CPI is a potential
index of these two countries, especially Germany's

b) Minimum salary and average salary in Germany

Minimum wage: As of October 1, 2022, the gross minimum wage in Germany is €12 gross per
hour. This minimum wage also applies to expats, international students, and overtime work
(unless your contract states otherwise or you agree to take time off later)

Figure 18 Average wage in Germany and Italy

-A good annual gross salary in Germany is between €64,000 to €81,000. But most Germans
earn a yearly gross salary of €60,000
-The average gross salary for Italy is around €44,640 per year or €3,720 a month
=> Germany‘s average salary is higher than Italy’s
=>As you can see, working in Germany results in a net salary that is on average 5% higher
than in the nearby expat havens.

c) GINI index

Figure 19 Average wage in Germany and Italy

The average cost of living in Germany ($1325) is 8% more expensive than in Italy ($1221).
Germany ranked 30th vs 38th for Italy in the list of the most expensive countries in the world.

The average after-tax salary is enough to cover living expenses for 2 months in Germany
compared to 1.2 months in Italy. Ranked 17th and 28th best countries to live in the world.

d) GINI index
 Figure 20 Gini Index in Germany and Italy form 2015 - 2021
The Gini index, or Gini co-efficient, measures income distribution across a population.
Developed by Italian statistician Corrado Gini in 1912, it often serves as a gauge of economic
inequality, measuring income distribution or, less commonly, wealth distribution among a
population.

Based on the above chart, Germany’s GINI index line is relatively similar to Italy’s line. Both
countries’ Gini coefficient is less than 0.4 each year from 2015-2021. As a result, Germany and
Italy are considered to have a low level of inequality. This is a safe and reasonable range to
pursue its goals of high and stable economic growth.

2.4 Geography

Germany is known as the heart of Europe because

it is located in Central Europe and shares borders
with 9 countries: Denmark, Poland, Czech
Republic, Switzerland, Austria, Netherlands,
France, Belgium, and Luxembourg.

Figure 20 Location of Germany in EU

 Italy - a country of south-central Europe,
occupying a peninsula that juts deep into the
Mediterranean Sea. Italy's geography is mainly
mountainous terrain with scattered valleys.

2.5. Taste, consumption trends:

TYPE OF COFFEE

Arabica Coffee is the Largest Segment in the German Coffee Market. German consumers prefer
high-quality, lightly roasted arabica coffee. The arabica coffee bean is prominent among the
German consumers, as compared to Robusta beans.

Despite containing less caffeine than Robusta, Arabica beans are often considered superior in
taste. Arabica tends to have a smoother, sweeter taste, with flavor notes of chocolate and sugar.
They often also have hints of fruits or berries. Robusta, on the other hand, has a stronger, harsher
and more bitter taste, with grainy or rubbery overtones. According to Chiara, the standard
Italian coffee consumer looks for “strong, bitter, and cheap espresso”, and values “a famous
brand and the glamour that it carries. Thus, they are inclined to prefer Robusta than Arabica
according to their preferred taste.

ORGANIC COFFEE MARKET TREND

The popularity of organic foods in Germany is driven largely by consumer interest in health
and environmental impact. Therefore, Germany is the leading importer and consumer of organic
coffee, with the demand for organic coffee in Germany continuing to grow.

According to a survey conducted by Tchibo, 19% of German consumers are willing to pay a
higher price for coffee that is certified as organic.

Italy is the fifth-largest organic market by value in the world at €1.6 billion in 2018. The organic
market in Italy is estimated to have grown by 5.8% between 2017 and 2018. Organic ground
coffee follows this trend, reaching a turnover of €6 million in 2018, registering a steep 18%
increase in value and 15% in volume between 2017 and 2018. Despite the growth rates, beware
the organic coffee market remains a small niche. Italians spent approximately €26 on organic
products per capita in 2017, placing Italy 14th in per capita spending in the world. Within
Europe, the largest organic markets are in Germany and France.

GREEN COFFEE BEANS CONSUMPTION

 Germany is Europe’s largest importer of green coffee beans. In 2021, Germany accounted for
34% of total European imports sourced directly from producing countries, an approximate 1.1
million tons valued at €2.6 billion. Total import volumes remained stable between 2017 and
2021 on average, growing at an average rate of 0.3% annually.

Italy is the second-largest importer of green coffee beans in Europe, after Germany. Italian
coffee imports accounted for 17% of total European imports in 2018, totalling 606 thousand
tonnes, which makes Italy the second-largest importer of green coffee beans in Europe. An
estimated 97% of all Italian coffee imports are sourced directly from producing countries.
Import volumes increased at an average annual rate of 3.2% between 2014 and 2018.

In conclusion, after considering 6 indicators, it is easy to see that Germany is the market
with the greatest potential. With great advantages of geographical location,
demographic factors, market size, taste and consumption trend….Germany has much
more potential to import Arabica Coffee Green Bean Product.

3. CHOOSING TARGET SEGMENT

-Context:
+The on-site roasting segment (instead of using packaged or ready-to-drink coffee) enjoying a
distinct coffee flavor according to preferences is also preferred by a group of consumers in
Germany
+The demand for specialty coffees also tends to increase in the high-end segment of customers,
who prefer high-quality coffee lines and "unique" origin from a particular farm with a brand
name or meet sustainability criteria.
+There is an increase in the demand for freshly brewed coffee, primarily due to the rising
preference for specialty coffee and freshly ground coffee pods. This is mainly due to an
increase in the number of specialty coffee shops, coffee consumption in offices, and in-house
brewing.
• Decision of AEROCO:
We choose Specialty coffee shops and Retail coffee shops (B2B) as the target segment of our
strategy. This strongly influenced our company in making adaptations to work with this customer
segment.
IV. Adapt product to the market
1. Mandatory adaptation:
1.1 Legal requirements:
• To enter the EU markets, especially the German ones, Vietnamese coffee products must ensure
that there are no residues of pesticides and comply with strict quality regulations of the market,
including traceability and geographical indications.

• Food safety: When it comes to food products such as coffee, the focus of European Union’s
legislation is food safety and food hygiene. The General Food Law is the legislative framework
for this subject. This law ensures the quality of food products throughout the whole supply
chain. Products that are not considered safe will be denied access to the European Union.

=> Our company has defined the risks in the supply chain, indicating how we prevent or
mitigate and monitor these risks, as well as what to do if something does go wrong. We also
ensure food safety by following good agricultural practices (GLOBALG.A.P). GLOBALG.A.P.
 has a special green Coffee standard, which covers production from pre-harvest activities such
as soil management and plant protection product application to post-harvest handling and waste
management. As a result, we think that it would be a good idea if we follow their standard to
ensure the food safety of our product before entering the German market. In addition to that,
we are following the HACCP CODEX Alimentarius - the HACCP system according to CODEX
to ensure the food safety of our product

• As the bulk of green coffee beans sourced in producing countries will still be roasted in the
export destination, food safety management systems related to processing are not always
required. However, some German coffee buyers might require exporters to comply with a food
safety management system, for example ISO 9001 or ISO 22000 or hazard analysis and critical
control points (HACCP) principles

=> Aeroco has already followed the standard of ISO 22000 and HACCP CODEX Alimentarius

• Food contaminants: European Union legislation ensures that contaminants are kept at
levels that are as low as possible so that they do not threaten human health or negatively
impact the quality of food. The levels are set based on scientific advice provided by the
European Food Safety Authority (EFSA). The main contaminants likely to be found in
coffee products are:

• Pesticides

• Mycotoxins / mould

• Pathogens

• Extraction solvents

• Hydrocarbons

• Other: Acrylamide

=> Our company would comply with the regulation on contaminants in foodstuffs (Regulation
EC 1881/2006); otherwise, our products will not be allowed into the European market. We also
focus on applying good agricultural practices as mentioned above to reduce the presence of
food contaminants, as the risk of contamination of any kind can be prevented by better growing,
drying, processing and storage practices.

1.1. Quality requirements:

The quality of green coffee must be graded and classified before export. Aeroco is using the
Vietnamese grading system

Grading is based on the following criteria:

• Altitude and region.

• Number and classification of defects or imperfections.

• Screen size – screen size is important to ensure uniform roasting which improves the
quality of the final product.
 • Colour of the green coffee

• Density and water activity.

• Roast appearance, which helps to discover quakers. Quakers are lighter and
underdeveloped beans in comparison to the rest of the roasted beans.

German buyers will also perform a green coffee assessment. This includes a screen-size
evaluation assessment, defect count, and an assessment of bean colour, appearance and smell.
This is followed by a moisture check and water activity analysis. Sample roasting is then
performed to evaluate assess the quality and uniformity of the green coffee

=> By giving an accurate description of the physical properties of the coffee, such as screen
sizes, which and number of defects, at what altitude the coffee was grown, how the cherries
have been processed, etc. We can meet the required German coffee quality and create more
opportunities for exporting.

1.2. Labeling requirements

To ensure product identification and traceability, our product’s labels will be written in English
and include the following information to ensure traceability of individual batches:

+Product name.

+International Coffee Organisation (ICO) identification code.

+Country of origin.

+Grade.

+Net weight in kilograms.

+For certified coffee: name and code of the inspection body and certification number.
 Figure 21 Example for adaption
1.3. EU ORGANIC:
To market your coffee as organic in the European market, it should comply with the regulations
of the European Union for organic production and labeling. Obtaining the EU organic label is
the minimum legislative requirement for marketing organic coffee in the European Union. Note
that all organic products imported into the EU should have the appropriate electronic Certificate
of Inspection (COI). These COIs should be issued by control authorities prior to the departure
of a shipment. If this is not done, your product cannot be sold as organic in the European Union
and will be sold as a conventional product. COIs can be completed by using the European
Commission’s electronic Trade Control and Expert System (TRACES).

2. Voluntary adaptation:
2.1 Packaging:
• The green coffee is transported in traditional 60 kg jute sacks, each with a net volume of 17
tonnes of coffee. Green coffee beans are traditionally shipped in woven bags made from jute or
hessian natural fiber. GrainproGrainPro or other innovative material like Videplast liners, are
often used to pack specialty coffees inside jute bags

=> These materials would be used because they have added value over traditional packaging,
as they preserve grain quality, prevent post-harvest loss, reduce solid waste, reduce farmer’s
net carbon footprint, and facilitate chemical-free storage. We also consider using food-grade
quality packaging. Packaging materials can consist of fibers that have been softened by mineral
oils or have been written on with mineral oil-based ink – these could lead to potential MOAH
contamination of your green beans. Since Germany is planning to restrict the use of MOAHs
in food contact materials, food-grade quality packaging seems to be appropriate and effective.
 2.2 Labeling:
Unlike other EU countries, German consumers mostly use German, and they really respect their
mother language. That’s why besides the English labeling, we also have a sub-label written in
German. The label will clarify as much information as possible (about the origin, product’s
component, manufacturing process…) since the German market tends to demand high-quality
products with a clear origin.

2.3 Quality requirement:

• Western-European countries like Germany generally have stricter additional requirements than
Southern-European and Eastern-European countries

• In addition to compulsory grading, Aeroco is considering doing coffee assessment by a method

called cupping. The cupping tool which will be used is the SCA’s Coffee Taster's Flavour
Wheel. Some of the quality attributes assessed are flavour, fragrance/aroma, aftertaste, acidity,
body, uniformity, balance, cleanliness, sweetness, and off-notes. The Coffee Quality Institute
and the cupping protocols of the Specialty Coffee Association consider that coffees graded and
cupped with scores below 80 are considered standard quality and not specialty. Therefore, we’re
trying to get 85 points and perhaps above.

• Our company thinks that it is important for buyers to know what the cupping score of our coffee
product is. Although not mandatory, adding this information to the documentation of the coffee
that we are going to export can add value, especially when our target segment is specialty coffee
shops

2.4 Additional requirements:

• Additional food safety requirements: German importers might re-export large quantities of
green coffee to other destinations in Europe. Those other buyers push their requirements
forward to other players in the supply chain, which might increase the need for us to adopt other
specific certifications or standards. That is the reason why we will have:

• Implementation of good manufacturing practices (GMP): These general principles provide

guidance on post-harvest processes such as washed or natural processing, manufacturing,
testing and quality assurance to ensure that products are safe for human consumption.

• Implementation of a quality management system (QMS): Buyers increasingly require a system

based on Hazard Analysis and Critical Control Points (HACCP) as a minimum standard for
green coffee production, storage, and handling. Therefore, our company would check for (and
aim to prevent) Ochratoxin-A (OTA), polyaromatic hydrocarbons (PAHs) and contamination
from pesticides such as glyphosate contamination. Moreover, we proactively obtain certificates
of analysis periodically for our product, preferably from an EU-accredited laboratory such as
Eurofins or Tüv. Aeroco is trying to obtain ISO 9001-certification for our quality-management
system.

• Additional sustainability requirements: As an exporter, adopting codes of conduct or

sustainability policies relating to your company’s environmental and social impact may give
you a competitive advantage. In general, buyers will likely require you to comply with their
code of conduct, and/or fill out supplier questionnaires regarding your sustainability practices.
Coffee industry players, especially the leading companies in the German coffee market such as
Tchibo and Jacobs, have sustainability policies which reflect their relationship with farmers,
operational transparency, and social and environmental impact at origin. To meet these
requirements, Aeroco has followed standards like Rainforest Alliance-UTZ which are
important in the mainstream coffee market and are often part of the sustainability strategy of
traders, coffee roasters and retailers.

In addition, in mid-2021, the Supply Chain Due Diligence Act was adopted by the German
government. This Act will enter into force in 2023. It sets standards in relation to human-rights
and environmental standards for large German companies and their supply chains. German
buyers will implement stricter buyer requirements and increase supply chain monitoring to
comply with these standards.

V. Distribution channel
Aeroco is a small company so they should choose indirect approach which provides a way to
enter foreign markets without the potential complexities and risks of direct exporting. There are
some reasons why we choose indirect channel for Aeroco:

- International Marketing objectives of Aeroco:

• Profits: Increase revenue from sales in the shortest amount of time since launching the
product in Germany
• Sales: Set up sales infrastructure and processes to bring their products to end users as
soon as possible.
• Market share: Company’s objective is to reach as many markets as possible, maximize
profits and increase product awareness
• Target customers: Business in Germany

- Aeroco’s resources and experience

• Financial resources are quite limited. Therefore, Aeroco have to depend on

intermediaries for financial support and secure warehousing
• Aeroco has just established in 2017 and they are a manufacturing company, so trading
and exporting are not their cons as well as their limited ability to compete with some
local coffee brands in Germany is still limited so they need an intermediary to be able
to bring products coming to the German market.

-Availability of intermediary in Vietnam:

• Công ty XNK Nguyên Đức

• Vngrow Co., Ltd
• CÔNG TY TNHH THƯƠNG MẠI & DỊCH VỤ XUẤT NHẬP KHẨU CTS
• Zship Logistics
• ….

-Customer and product characteristics:

• German tastes tend to be mild, and this extends to their coffee as well. German roasts
tend to be lighter than French or Vienna roast, and this is probably why people can
consume so much coffee in one day; Germans don't care too much about the taste or
 "experience" of coffee, they prefer to keep their drip-coffee production method to grant
them their caffeine intake.
• Company products: Coffee is non-perishable, easy-to-preserve and has no requirement
on high technique or shipping terms. Therefore, indirect channel will not affect the
quality of company’s products.

-Marketing environment: There are many cultural differences between Vietnam and Germany.
Below are the scores for the evaluation of cultural indicators according to the Hofstede cultural
model:

Figure 8 The evaluation of cultural indicators according to the Hofstede cultural model
=> The difference in culture between Vietnam and Germany will be barriers to Aeroco when
this company don’t have many experiences in this market. Therefore, if Aeroco apply indirect
channel, which means that company will have more intermediaries having good knowledge
about culture, working methods as well as relationships and customers available in the German
market, Aeroco can avoid many risks in compared to direct export.

=> Based on the mentioned analysis, Aeroco should apply indirect channel which is EMCs.

-The reason we choose EMCs: They can provide many marketing tools,

shipping, forwarding and agent services. Besides, we can reduce the disadvantages by offering
more regular in agreement for marketing efforts, promotion, sales and so forth.

-The reason we do not choose other channels:

+MEAs: lacking marketing service when we want to offer more. The primary way is direct
marketing by introduction to customer and basic promotion. It is hard for us to try to locate our
product to target customer

+ITCs: We can not attend in marketing process, so it is hard to sale our product for a long time
and widespread market share.

+Export commission agents and the resident buyer: lacking control marketing of product
+Export merchant: it is not good for sale in long term because of lost of brand name

+Cooperative exporter: depend on the exporter and lacking control marketing.

VI. Export promotional tool:

1. Media Message
By positioning business focused on product quality, the message of the company is: Aeroco –
we make coffee, simply coffee!

2. Marketing Strategy
We think that company should combine push and pull marketing strategies. In the early stage,
push strategy is suitable for our company's capacity to enter the Germany market to make
customer aware of the product or brand, make its mark in customers' hearts, creating curiosity
and wanting to learn about products in them. Then, we use pull strategy to encourages the
customer to seek the product or brand. As a result, they will voluntarily buy and use our
products.

Chairman of the German Coffee Association said that Germany imported 1.1 million tons of
green coffee beans in 2021, it proves that the demand for green coffee is high, and they are
likely to seek it out at the point of purchase. Furthermore, pull strategy is also suitable for small
size company and not have many employees like Aeroco

To achieve this aim, our enterprise uses some specific export promotional tools when entering
Germany market as follows:

2.1 Traditional advertising: magazines, newspaper and direct mail

-Magazines and newspapers: Reading culture in Germany is very popular: 70% of Germans
like to read, more than 1/2 people buy books and magazines regularly and 1/3 people read books
every day. Therefore, the company's products will have a higher ability to reach customers
through magazines and newspapers

-Direct mail: Because our target customer is business consumer so direct mail allows users to
apply with low cost but very effective. Businesses can know exactly about their potential
customers through direct mail. It helps businesses to locate advertising objects and customers
who need to use the company's products and services to maximize advertising effectiveness and
save costs.

2.2 Online advertising (website, WhatsApp, YouTube, Facebook)

According to research by Statista, until the third quarter of 2020, the most popular social
network in Germany was WhatsApp with 87% of Internet users already using this application.
YouTube and Facebook are the second and third choice respectively.

• The simplest effective way, taking advantage of the available power of social media
platforms. Today's popular social networking platforms such as Youtube, Instagram,
LinkedIn, Twitter ... have a large number of users. This results in increased visibility
and coverage for the business. In addition, taking advantage of social networks allows
businesses to reduce marketing costs, increase the number of potential customers,
increase conversion rates as well as personalize the brand.
• According to statistics, up to 70% of B2B marketers use social media sites in the
"Big4" including Facebook, LinkedIn, Twitter, YouTube to distribute content.
 • Furthermore, the most popular social network in Germany was WhatsApp with 87%
of Internet users already using this application. YouTube and Facebook are the second
and third choice respectively so online advertising is rather suitable for business
consumers

According to research by Statista, until the third quarter of 2020, the most popular social
network in Germany was WhatsApp with 87% of Internet users already using this application.
YouTube and Facebook are the second and third choice respectively

Figure 22 Share of respondents

Figure 23 AEROCO website

 Figure 24 AEROCO facebook account
2.3 Sales promotion: Trade fairs and exhibitions
• In today's digitalized world, trade fairs are always the first choice of business planners
and executives to find out information about markets, partners, customers and
competitors. At the same time, you can meet your potential partners directly and
thereby sign a contract right at the premises of the fair.
• Germany is the leading country in the world in terms of the number of international
exhibitions that take place here. 60% of international specialized and multi-
disciplinary fairs are held here because of geographical convenience (located in the
heart of Europe), by leading infrastructure along with long-term development policies.
term and reasonable, select visitors and exhibitors, bring the highest value and benefits
to the participants.
• For Vietnamese small and medium-sized export enterprises, attending the exhibition
in Germany is one of the important steps in the process of understanding and entering
the market or affirming the brand and finding important partners. other important and
reliable. The German Chamber of Commerce and Industry in Vietnam is ready to
advise and assist Enterprises in finding potential and suitable exhibitions, planning the
preparation for attendance and planning the essential plans to get a successful
international export.
C. CONCLUSION
After doing the research about potential markets in EU such as Germany and Italy, with the
examined advantages when the company enters to foreign market and supply capacity of
Aeroco, Germany is the market bringing huge profits for Aeroco Corp in the future. Proper plan
has been set up for the company including products, distribution, promotion.