Nestlé Vietnam boss says cheap coffee won't sell once EU rules kick in

Jacob, chairman and managing director of Nestlé Vietnam, delivered the warning on Nov. 3 at the Fortune Southeast Asia 500 Summit in Ho Chi Minh City. Cheap coffee is headed for trouble because Brussels is rolling out what he called very stringent norms. Without sustainable, high-standard beans, he said, Vietnam will be unable to export.

The stakes are hard to overstate. Europe drinks about 24% of the world's coffee, according to the European Coffee Federation, making the bloc's rulebook the one producers have to live with. Vietnam is the planet's second-largest coffee producer and the top grower of robusta, the workhorse bean behind instant coffee.

The EU Deforestation Regulation lands on most companies from Dec. 30, 2026, with smaller businesses getting until later in 2027. It's designed to curb deforestation and forest degradation tied to certain commodities, and to shrink the bloc's contribution to greenhouse gas emissions and biodiversity loss. Hanoi is already working with Brussels on compliance, backed by the multiyear SustainCoffee project, which aims to help more than 400 coffee-related businesses and an estimated 1.4 million farmers and workers indirectly.

Nestlé hasn't waited around. The company teamed up with the Western Highlands Agriculture and Forestry Science Institute to breed a coffee plantlet suited to Central Highlands soil, propagating it through tissue culture. From a single leaf, Jacob said, 2,000 trees can be grown — a trick Nestlé has run for 15 years, producing 100 million disease-resistant plantlets and distributing them to farmers across central Vietnam at subsidized rates. Vietnam's coffee productivity now runs three times the global average, he said, and the method can be copied anywhere.

Jacob framed the crackdown as an opening rather than a death sentence. Small farms make it easy to swap traditional methods for regenerative farming, he argued. Do that, and Vietnam gains an edge to export more while keeping more of the value at home.

The Fortune Southeast Asia 500 Summit was held in Ho Chi Minh City, where Jacob spoke on Nov. 3.