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Truly a regional success story

Truly a regional success story

14 True coffee

With 70 outlets in Thailand and locally represen-ted by Golden Tree, True Coffee now has three coffee shops in Cambodia: one on Monivong, one in BKK1 and one more at the border in Poi Pet.

There are plans to open a fourth in the new headquarters building for Golden Tree, now under construction in Phnom Penh and called GT Tower.

One of Golden Tree’s directors, Morten Kvammen said the $3 billion True Corporat-ion in Thailand, a media and communications giant, set up internet cafes in Thailand as an easy way to give people access to mobile, internet and cable-TV services.

“It was probably ahead of its time in Thailand in terms of the coffee culture taking off, and True became a very well-known brand,” Kvammen says.

There are also a small number of True Coffee outlets in Laos.

The first True Coffee to open in Phnom Penh was the one on Monivong in 2011, followed by the one in BKK1, in 2012 and the third on in Poi Pet in late 2012.

“We buy and tap into the supply chain,” Kvammen said. “The cups, the napkins, everything comes from True in Thailand.  The coffee we can only buy from the approved suppliers to make sure the quality is consistent.

“One of the True Coffee trademarks has been to go all the way down into sour-cing beans, and making sure of their high quality.”

Kvammen said there was a similar taste preference between Thai and Cambodian people, for sweet and specialty drinks.

“What works in Thailand also works well in the Cambodian market,” he said.

As for additional future outlets, Kvammen says Siem Reap could be a possibility.

“Siem Reap is an interesting market, not as saturated as Phnom Penh, which is very saturated, especially in BKK and the riverside areas. It’s a question of what peoplelike.”

The next True Coffee location in Phnom Penh will be in the new GT Tower, a 15-floor building near the Olympic Stadium and Phnom Penh International University.

Kvammen said the cost of leasing space in the GT Tower building will be competitive, well below that of Phnom Penh Tower with 125 car parking spaces and 250 spaces for motorcycles.

Coffee shops need to be located near where people hang around, Kvammen says, because the market-place is becoming increasingly competitive.

“Riverside is interesting and there’s a potential for expansion into a walking street in Tuol Kork. That’s going to further develop that whole area.  Coffee shops target a relatively wealthy segment of the population,” he said.

“If you look at the coffee culture, it is a global phenomenon.  In Europe you still have the individual coffee shops, not so much taken over by big franchise chains like in Asia and the United States. People like coffee and the atmosphere of sitting around in a nicely dedicated place. People go there not just for the coffee;  they go there to eat.  We have pastries here and we have things to eat that go well with coffee.”

Kvammen, a graduate of both the INSEAD Business School and the Wharton School of Finance, says there is a limited market for coffee houses in Cambodia that exists mostly in Phnom Penh and  Siem Reap.

“When the market becomes saturated, as it is in certain areas of Phnom Penh, you are not going to get more coffee drinkers just by opening more coffee shops.The more interesting opportunity is to expand in buildings, other areas like Tuol Kork and closer to the airport.”

He says having a True Coffee Golden Tree’s new GT Tower has value in controlling the brand.

“We think there’s some value in controlling the brand to put it into our own developments.  It’s a service that adds value to the building and we can make that investment because it adds value to the building.”

He said coffee shops could also be helpful in apartment complexes.

“The fact that you have a coffee shop is good for the tenants.”

The True Coffee Cambodia franchisee, local conglomerate Golden Tree is owned by Cambodian businessman Heng Kimlang. Golden Tree trades in health and beauty products, food and beverage, Wasabi restaurants, a Chinese restaurant and automobile trading, real estate,  as well as ownership of Paradise Hotel.  Another business is leasing gaming machines to casinos.

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