Vietnam coffee exports face a higher bar under EU rules

By Amara Osei

Vietnam’s low-cost coffee exports face a higher bar as EU sustainability rules apply to most companies from Dec. 30, 2026. Smaller businesses will have until later in 2027. Nestlé Vietnam warns that Vietnam’s historic price advantage could erode unless producers move toward higher-value, sustainable coffee.

At the Fortune Southeast Asia 500 Summit in Ho Chi Minh City on Nov. 3, Binu Jacob, chairman and managing director of Nestlé Vietnam, framed a direct risk: coffee sold mainly on price may no longer be attractive to export.

“Vietnam was always known to produce cheap coffee, but cheap coffee is no longer going to be attractive to export because [the] EU is coming up with very stringent norms,” Jacob said. “So if we don't go up the value chain and create coffee that is sustainable and that meets the very high standards, we will be unable to export.”

Why does Europe’s market matter to Vietnam?

Vietnam ranks as the world’s second-largest coffee producer and the largest producer of robusta, the variety largely used in instant coffee. Europe is the world’s largest coffee market, accounting for about 24% of global consumption, according to the European Coffee Federation.

That market share gives Brussels’ standards outsized importance for producers. Low cost cannot compensate for coffee that fails the EU’s requirements.

Takeaway: For Vietnam, EU compliance now sits beside price as a condition of export access.

What changes on Dec. 30, 2026?

The EU Deforestation Regulation applies to most companies from Dec. 30, 2026, though some smaller businesses need not comply until later in 2027. It seeks to curb deforestation and forest degradation linked to the production of certain commodities.

It also aims to reduce the bloc’s contribution to greenhouse gas emissions and biodiversity loss. Together, those goals make the regulation relevant to Vietnamese coffee suppliers seeking continued access to Europe.

Takeaway: Most companies face the Dec. 30, 2026 deadline, while smaller firms receive more time.

How is Vietnam preparing?

Hanoi is working with Brussels on compliance. The multiyear, EU-backed SustainCoffee project aims to help Vietnam’s coffee sector meet international environmental, social and governance standards.

It also seeks to support more than 400 coffee-related businesses and indirectly benefit an estimated 1.4 million farmers and workers in the supply chain. That reach makes the program a sector-wide response.

Takeaway: Vietnam is using a broad support program to bring more of its coffee chain into compliance.

What is Nestlé putting in the ground?

Nestlé has applied its global research and development capabilities through a partnership with the Western Highlands Agriculture and Forestry Science Institute, a prominent agricultural research institution. The partners developed a coffee plantlet suited to Central Highlands soil conditions, Jacob said.

Nestlé propagates the plantlets through tissue culture. Jacob put the scale this way: “From one leaf of this coffee plant, you can actually make 2,000 trees, and this is what we've been doing in the last 15 years.”

The company says it has made 100 million of these disease-resistant plantlets and distributed them to farmers across central Vietnam at subsidized rates. Jacob said Vietnamese coffee productivity and yield now stand at three times the global average and that the model can be replicated worldwide.

Takeaway: Tissue culture gives Nestlé a scalable route to distribute disease-resistant coffee stock to farmers.

Can Vietnam keep more value at home?

Jacob still saw the rules as an opportunity. He argued that small farms can move relatively easily from traditional farming to regenerative farming. That shift could give Vietnam a competitive advantage, support higher exports and keep more value in the country.

The warning and prescription point in one direction: Vietnam can continue competing on volume only if it also competes on sustainability and value retention. The cheaper route risks losing access.

Takeaway: Better farming practices offer Vietnam a way to meet EU standards while retaining more export value.