Milano Coffee Overview
Development Milestones
- In 1996, Mr. Le Minh Cuong entered the coffee market, primarily engaging in coffee roasting.
- In 2011, Le Phan Coffee Company Limited was founded, marking the initiation of franchising with its first store in Go Vap District, Ho Chi Minh City.
- By 2013, the franchise network had expanded to over 200 stores.
- In 2017, Coffee Milano Vietnam Joint Stock Company was established, achieving a milestone of over 1,000 stores.
- In 2020, an additional 179 new retail locations were opened, introducing 20 new beverages to the menu.
- On December 30, 2020, the company celebrated the inauguration of the Milano coffee production facility.
- By September 2023, the company boasted over 1,900 stores across 58 provinces and cities in Vietnam, estimated to serve more than 50 million cups of coffee annually nationwide.
Manufacturing Plant
Established in 2019, the Milano Coffee Production Plant, nestled in the Northwest Cu Chi Industrial Zone at Tan An Hoi, Cu Chi, enjoys a commendable annual production capacity of approximately 2,000 tons. This contemporary facility specializes in an array of premium coffee products, including whole beans, ground coffee, paper drip coffee, high-quality green coffee beans, wet-processed coffee beans, and natural coffee beans. It holds accreditation under the rigorous standards of FSSC 22000 version 5.1 and HACCP CODEX version 2020, in addition to being recognized as an institution compliant with stringent food safety and hygiene regulations.
Franchise Model
Milano Coffee has solidified its position as a welcoming and quality-focused coffee brand that seamlessly intertwines traditional coffee appeal with modern investment and quality control. With a thriving network of nearly 2,000 stores spanning across 58 provinces and cities, Milano Coffee has meticulously devised standardized franchise models tailored to varying investment capacities and floor space dimensions. Each model is continuously updated with modern facilities, adhering to operational procedures, yet retaining the distinctive traits of an airy and comfortable space characteristic of an affordable café. Moreover, Milano Coffee actively invests in a Point of Sale (POS) sales system, a tool designed to facilitate oversight of store operations, streamline processes, and minimize operational inefficiencies and waste.
Insight into the Maestro and Milano Coffee Partnership
Milano Coffee and Maestro Collaboration Overview
Milano Coffee possesses a prominent market position, with about 800 stores before receiving investments. As the largest F&B chain, there is significant potential for expansion, particularly in the northern region, where only 10% of the network exists.
Moreover, Milano has gained an advantage over competitors by being the fastest-growing chain in terms of the number of shops in the country.
One of the key strengths of Milano’s business model is its scalability. By leveraging the entrepreneurial spirit of Vietnamese families and adopting a light franchising model, they have developed a strategy that suits the Vietnam market well. This approach allows for easy replication and growth throughout the country. Moreover, the concept’s strength relies upon the product, which makes it more suitable for franchising compared to lifestyle concepts.
Milano Coffee is also a leader in the affordable market segment. This segment is the largest and most fragmented, with numerous independent shops that have suffered from scandals and poor practices. Milano’s position as a reputable chain sets it apart from the competition and presents an opportunity to capture a substantial market share.
In addition, Milano’s presence in third-tier cities is a valuable asset. These cities often lack branded chains and rely heavily on Milano as their only option. This provides Milano with unique access to valuable information that can be used to further optimize its operations and expand its market reach.
Overall, Milano Coffee’s potential lies in its existing market presence, scalable model, leadership position in the affordable segment, and the opportunity to gather valuable data from outskirt areas where modern chains are missing.
The key expertise and strategies to support Milano’s growth and success
First of all, the financial and legal experience helped the company to comply with international financial standards welcoming international investors in its growth journey.
Secondly, industry experience helped the company adopt a longer-term strategy focusing on its core business which is the affordable segment.
Third, thanks to our operational expertise, we supported the company in improving its planning and streamlining its revenue funnel, which is the process to embark and serve new franchisees.
Fourth, start developing digital capabilities that can bring huge leverage in a very traditional business. Through Shopee and similar platforms, we extended Milano’s reach to a broader demographic of coffee lovers who prefer online shopping and delivery services. The relationship with the franchisees is managed through a proprietary application that enhances the relationship with them. Start developing a consumer application that can collect information on the millions of customers crossing the Milano network every month.
Lastly, our operational experience and network supported the company in identifying and working with more professional and stronger partners to improve supply chain efficiency and start expanding the business internationally.
Digital Strategies
In recognition of the growing importance of digital channels in the coffee industry, we at Milano Coffee embarked on a digital initiative to boost our digital presence. One of the key strategies we implemented was transitioning our relationship with franchisees to a proprietary application. This application facilitates communication, reordering, and promotions, and even offers gamification aspects to enhance the overall experience.
Additionally, we expanded our market reach by offering Vietnamese ground coffee packs on popular e-commerce platforms such as Shopee. This move served several purposes:
Accessible Convenience: By making our coffee packs available on e-commerce platforms, such as Shopee, we have given our customers added convenience. They can now enjoy Milano’s coffee blends from the comfort of their own homes, thus reaching a broader audience beyond our physical stores.
Digital Accessibility: Embracing e-commerce is our strategic response to the digital age. This approach allows us to tap into the expanding online consumer base. Through platforms like Shopee, we have extended Milano’s reach to a wider demographic of coffee lovers who prefer the convenience of online shopping and delivery services.
Brand Visibility: Our presence on e-commerce platforms significantly enhances our brand visibility. It exposes Milano to a vast online community, solidifying our reputation as a provider of high-quality coffee products. This increased visibility not only boosts our e-commerce sales but also drives traffic to our physical stores.
Finally, we have initiated the development of a consumer application aimed at deepening the connection between Milano and our customers. This application will not only enhance their overall experience but also provide us with valuable insights as we collect data on the millions of people who engage with Milano Coffee every month.
While some technological companies are focusing on improving the coffee experience, such as Coffee Kenang and Luckin, we are determined to digitalize and strengthen the deep connection our customers have with Milano products.
How Milano Expanded and Diversified Post Maestro’s Investment
Franchise Network Expansion: Milano’s growth journey was significantly driven by the strategic expansion of its franchise network. We enhanced our offerings to attract potential franchisees, all while identifying regions and markets with untapped potential. Actively seeking franchise partners who shared our vision of delivering affordable, high-quality coffee allowed us to rapidly extend Milano’s presence, both in urban and suburban areas.
Urban and Suburban Strategy: We recognized the unique demands of urban and suburban markets and tailored Milano’s approach accordingly. In urban areas, we focused on space optimization, while in suburban locations, we prioritized accessibility and visibility.
Coffee Production Facility: The establishment of our coffee production factory marked a milestone in Milano’s evolution. It fundamentally transformed our operations by providing greater control over coffee quality, from sourcing to roasting and packaging, ensuring consistent excellence. This strategic investment improved cost efficiency through procurement streamlining and scale optimization, allowing Milano to maintain affordability while delivering quality coffee. The facility also promoted customization and innovation, enabling us to swiftly respond to evolving consumer preferences and market trends.
Menu Diversification: While keeping affordability at the core, we strategically diversified Milano’s menu by introducing new coffee blends.
