Masan establishes strategic partnership with Phuc Long to develop Phuc Long Kiosk at VinMart+’s nationwide network
Ho Chi Minh City, May 24th, 2021 – Today, The Sherpa Company Limited – a subsidiary of Masan Group Corporation (HOSE: MSN, “Masan”) announced the signing of the definitive agreements to acquire 20% stake in Phuc Long Heritage Joint Stock Company (the “Transaction”). Phuc Long Heritage is the company which shall own the Phuc Long brand, one of the leading tea and coffee brands in Vietnam. The purchase price of the Transaction is 15 million USD.
As a part of the Transaction, VinCommerce entered into a Strategic Cooperation Agreement (the “SCA”) with Phuc Long. Accordingly, both sides will jointly develop "Phuc Long Kiosk" through a network of more than 2,200 VinMart+ stores nationwide. "Phuc Long Kiosk" at VinMart+ not only brings fresh and delicious tea and coffee drinks to 100 million Vietnamese consumers, but also plays an important part in converting each of the VinMart+ stores into a destination that satisfies daily essential needs for consumers of all ages.
Currently, Vietnam’s tea and coffee market value is estimated at $2.3 billion and is expected to grow more than 10% per annum. However, branded tea and coffee retail chains, including popular brands such as Highlands Coffee (over 300 stores), The Coffee House (over 150 stores) and Starbucks (over 70 stores), only account for 25% of the market. Given a young consumer base who aspires innovative products and services, both Masan and Phuc Long believe that branded tea and coffee chains will explode in the next decade. With the pilot results of 4 Phuc Long Kiosks in Ho Chi Minh in the last 3 months, both parties are confident that we can achieve the target of 1,000 Phuc Long Kiosks in the next 18-24 months.
“After 50 years of experience growing and developing the highest quality of tea leaves and coffee beans coupled with relentless innovation and strong passion, the Phuc Long team has created for consumers coffee and tea drinks with unrivaled quality. We are proud to have achieved important milestones in our first phase of development - building a network of 82 stores and the Phuc Long brand that is trusted and loved by consumers, especially the youth. I believe that in partnering with Masan, Phuc Long will unlock the next phase of growth and continue to offer Vietnamese consumers high-quality products and delightful experiences in enjoying tea and coffee drinks, while making Phuc Long a long-lasting brand for many generations.” - said Lam Boi Minh, Founder of Phuc Long Heritage.
“As two Vietnamese power brands who synergize their strengths, VinMart+ and Phuc Long are proud to serve Vietnamese people by uplifting their material and spiritual lives. Masan highly appreciates the achievements of Phuc Long, as well as the passion and enthusiasm of its founder - Mr. Lam Boi Minh. I believe that in combining the Phuc Long products and VinMart+ network of more than 2,200 stores today and 10,000 stores in the next 5 years, we will provide 100 million Vietnamese consumers with the opportunity to enjoy the freshest, most delicious tea and coffee drinks. With the goal of serving daily essential products that meet "The Very Best of Fresh" standards, we believe that each VinMart+ store will transform into a symbol of modern lifestyle, a destination for all ages, from the youth to housewives across Vietnam. In the near future, we hope to bring Phuc Long tea and coffee brand to go global, contributing to spreading our cultural identity and promoting signature drinks of Vietnam. At the same time, this partnership also accelerates Masan’s strategy to develop the Point of Life consumer ecosystem.” - said Truong Cong Thang, CEO of VinCommerce.
According to the SCA with VinCommerce, Phuc Long Kiosk will share 20% of its revenue with VinMart+. Based on the results of the pilot model, this partnership will enhance the profit margin of the whole VinMart+ chain by more than 4.0% compared to the current level.
Founded in 1968 on the famous tea highland in Bao Loc and opened its first retail store at 134 Tong Doc Phuong Street (now is Chau Van Liem Street, District 5, Ho Chi Minh City), Phuc Long began supplying high quality coffee and tea products, in which the traditional Vietnamese taste was preserved in combination with a modern appealing style. After 50 years of experience growing and developing the highest quality of tea leaves and coffee beans coupled with constant devotion, Phuc Long has earned the reputation as a pioneer brand having many trending ideas for the coffee and tea industry. In early 1980s, Phuc Long pioneered in opening new tea and coffee business model (self-service model) with the first store at 63 Mac Thi Buoi Street, Ben Nghe Ward, District 1, Ho Chi Minh City. Then Phuc Long opened the second store at Dong Khoi Street where Time Square is situated now and gained good traffic and popularity among tea and coffee connoisseurs. In 2012, Phuc Long Coffee & Tea opened its first store at a shopping mall in District 7, marking its official entry to F&B retail industry. At that time, Phuc Long’s creative drinks generated strong spillover effects among the youth. Phuc Long now has 82 stores nationwide, marking its milestone as an attractive lifestyle destination for young Vietnamese.
VinCommerce operates the largest nation-wide grocery Modern Trade retail platform in Vietnam with Supermarket chain VinMart and Minimart chain VinMart+. VinCommerce also owns VinEco – the largest Vegetable & Fruit brand in Vietnam that is available exclusively at VinMart and VinMart+ stores.
MASAN GROUP CORPORATION
Masan Group Corporation (“Masan” or the “Company”) believes in doing well by doing good. The Company’s mission is to provide better products and services to nearly 100 million people of Vietnam, so that they can pay less for their daily basic needs. Masan aims to achieve this by driving productivity with technological innovations, trusted brands, and focusing on fewer but bigger opportunities that impact the most lives.
Masan Group’s member companies and associates are industry leaders in branded food and beverages, branded meat, value-add chemical processing, and financial services, altogether representing segments of Vietnam’s economy that are experiencing the most transformational growth.
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This press release contains forward-looking statements regarding Masan’s expectations, intentions or strategies that may involve risks and uncertainties. These forward-looking statements, including Masan’s expectations, involve known and unknown risks, uncertainties and other factors, some of which are beyond Masan’s control, which may cause Masan’s actual results of operations, financial condition, performance or achievements to be materially different from those expressed or implied by the forward-looking statements. You should not rely upon forward-looking statements as predictions, future events or promises of future performance.
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