The velvety coffee slowly dripping from the filter into my glass is bitter and dark. But once mixed with the sweet, silky condensed milk at the bottom, it turns into a rich chocolaty brew. It is a fitting metaphor for the story of coffee in Vietnam.
French colonists introduced coffee here in 1857. The central highlands region – known as Buon Ma Thuot – proved a perfect area for growing robusta beans. But a century later, the Vietnam war devastated the country and coffee production was severely disrupted.
After the long war, the government, supported by development agencies, launched a vast coffee-growing programme in the region to help put the country on the road to recovery. Its success has been astonishing.
In just two decades, Vietnam went from the scorched earth of Agent Orange to become the second coffee exporter in the world after Brazil, and the number one for robusta – one of the two main coffee species, often used in instant coffee. (Arabica, the other main variety, is grown at a higher altitude and comprises about 75% of world production).
This spectacular comeback has been a huge boon to the economy – coffee is Vietnam's key export, generating an income of more than $1.5bn. In total, the coffee sector represents 3% of national GDP, providing a livelihood for around 2.6 million people – 600,000 of them farmers and many from minority ethnic groups. Only 5% to 7% of the total production is used for domestic consumption; the rest is exported, mostly to the US and Europe.
But the coffee miracle has come at a terrible cost. In the 1990s, when coffee price was high, entire forests were razed to make space for more coffee, grown as a monoculture with heavy use of agrochemicals and over-irrigation. While the acreage under coffee expanded rapidly, the development of training and processing infrastructure could not keep up.
The proliferation of poorly managed coffee farms (coffee in Vietnam is mostly grown on small family-run farms of two to five acres), where beans were cultivated with little regard for the environment, resulted in a glut of low quality beans that drove export prices down, contributing to the global collapse of coffee prices in the 2000s. It has also caused widespread pollution, soil and water degradation, habitat destruction and loss of biodiversity in one of the most biologically diverse countries in south-east Asia.
Aside from the catastrophic impact on the environment and the quality of its beans, coffee in Vietnam is now facing new challenges, such as adaptation to climate change, a younger generation not wanting to be farmers and a global market changing from oversupply with record low prices to supply shortage with high prices (and as China and India are developing a taste for coffee, the demand is likely to skyrocket).
These issues are so critical that, for the first time, the government, farmers, traders and global food giants see the need to develop sustainable practices. They are working with social and conservation groups such as the Rainforest Alliance, the 4C Association and the Fairtrade Foundation to find ways to make coffee farming more productive, while reducing the cost on the environment.
"Vietnam's coffee industry is at a crossroads. The government is embracing the concept of sustainability and reaching out for support," says Pham Tuong Vinh, the Rainforest Alliance's co-ordinator for Vietnam. "It presents a great opportunity for proven production systems such as the sustainable agriculture standard that the Rainforest Alliance promotes to help define the future of coffee in Vietnam."
Pham took me, along with a delegation of Kraft Foods executives, to visit coffee plantations in the central highlands, where farmers have been trained to implement the baseline 4C standards or the stricter Rainforest Alliance certification programme over the past few years (both programmes address social, economic and environmental issues). The results are striking.
Farms that earlier had only produced coffee, now also grow sugar cane, pepper vines, pimentos and other crops. These crops improve the soil, protect the coffee plants from pests and provide additional income. Farmers have also planted hundreds of trees, such as acacia and papaya, to shield coffee plants from the sun, protect the soil and reduce the amount of water needed. And they have learned how to reduce their reliance on agrochemicals, segregate their waste, harvest only ripe cherries and protect the wildlife on their farms.
Coffee farmers in Vietnam generally earn more than the average per capita income of $1,300 a year, and certified coffee attracts an additional premium, which they often invest in their children's education.
These changes are encouraging, but are still limited. In Latin America, 75% of the coffee is grown according to sustainable standards, while in Vietnam it is only 10%.
Working with global companies like Kraft Foods and Nestlé, conservation agencies hope to reach large numbers of farmers and spread the concept of sustainability to all the coffee production areas. And because Vietnam is a key region for these multinationals, which need to ensure a long-term supply of quality beans for their instant blends, they are responding positively. For example, Kraft Foods, one of the two largest buyers of coffee in the world, has pledged to buy all of its coffee for its European brands from sustainable sources by 2015.
This commitment from food giants has encouraged the government to try to reach 25% of sustainable coffee production by 2015.
"There are still many challenges to a sustainable coffee sector in Vietnam, but if all actors in the supply chain work together, they can achieve a thriving, sustainable sector for generations to come," says Andrea Brüstle, key account manager at the 4C Association.
• Veronique Mistiaen travelled with Kraft Foods and the Rainforest Alliance
Update: 'Period when coffee price was high' corrected to 1990s on 26 March 2012.