Specialty Vietnamese coffee brand Nguyen Coffee Supply is heading to the mass market with a launch into 500 Target stores across the country, a move that will grow the brand’s footprint for its RTD robusta bean coffees to over 300% since the start of the year.
Target will carry the New York-based brand’s three canned flavors – Classic Black Cold Brew, Coconut Cold Brew, and Condensed Milk, the latter a take on the traditional cà phê sữa đá style that’s colloquially called “Vietnamese Coffee” in America. Each 7.5 oz. can will retail for $3.99 and will also be sold online via Target’s website.
The expansion brings Nguyen Coffee Supply’s distribution to over 2,000 doors nationwide, adding to a footprint that also includes Sprouts Farmers Market, Whole Foods, QFC, H-E-B, Nugget Markets, Bristol Farms and more. The brand is also sold through ecommerce via Gopuff, FreshDirect, Getir, Weee! and direct-to-consumer.
In an email to BevNET, Nguyen Coffee Supply founder and CEO Sahra Nguyen said that launching into Target was not only a “major company milestone” but also had a more personal resonance for her, noting that the retailer “feels very ‘American Dream’” and helps the brand reach more working class people such as her parents.
“Candidly, my parents were especially hyped about the Target news even though we didn’t have one in Boston growing up, but still, they were like, ‘WOW, Target means America,’” Nguyen wrote. “It’s a super mainstream brand appealing to all types of families for every occasion, including baby clothes, birthdays, household goods, and now their growing grocery department.”
To support the roll out, Nguyen said the brand is beginning the launch with a five week promotion through Q2, with an initial discounted price of $3.49 to help drive trial. As well, the company will focus on digital marketing, email and social media, including influencer support, to promote the Target launch. Nguyen Coffee Supply has also set up Circle promotions, redeemable through the Target app, she added.
Even as the company has grown its retail footprint by around 10x year-over-year, Nguyen said the business has been “hyper focused on efficiency and balancing the growth with sustainability,” working to decrease COGS, increase production capabilities, and negotiate price breaks.
Earlier this year the company brought on its first director of marketing, Danny Pham, and closed a bridge funding round in Q1 primarily fueled by existing investors.
The ready-to-drink coffee category has seen sales decline in recent months – according to NielsenIQ, retail dollar sales for liquid coffee were down -8.1% in the two-week period ending April 6 with volumes sliding by -8.7%. Category leader Starbucks has been a primary source for the decline, with its sales down -11.4% in the period, but other top competitors such as Black Rifle (-1.2%), Califia Farms (-11.7%) and functional brand Super Coffee (-29.7%) have also fallen.
Nguyen Coffee Supply, meanwhile, has continued to rise even as the category has slowed. According to Nguyen, in the trailing 52-weeks, SPINS showed the brand’s sales up around 36,000% – albeit starting from a much lower baseline. However, she suggested that a lack of unique innovation could be part of the problem with the category, pointing out that most flavor extensions from existing brands focus on the same things – Vanilla, Mocha Latte, Oat Milk, etc.
However, she believes the unique positioning of Nguyen Coffee Supply – both as an AAPI-owned brand celebrating cultural heritage and as an original product in the U.S. market with its use of robusta beans and flavors like condensed milk – is helping drive the brand’s growth.
“The timing is ripe for disruption and innovation in the category,” she wrote. “Consumers want more – more flavor, more energy, more culture. Our brand’s positioning is super unique next to the Top 10 on SPINS, as we’re focusing on areas that are not built into their brand identity: Vietnamese coffee, robusta beans and cultural connection.”