Doi Chaang franchise flies to foreign lands

In Thailand, the company has plans to open an average of up to six new franchised outlets a month, as it aims for 600 franchisees by 2020, its advisory chairman Phitsanuchai Kaewphichai said. Currently, Doi Chaang Coffee has 300 outlets nationwide – 10 of which are owned by Doi Chaang Coffee Original Co Ltd and the rest franchises. 

The company has about 50 franchised outlets overseas, including in China, South Korea, Malaysia, Canada, UK, Singapore, Laos, and Myanmar.

“We will have production capacity to produce coffee beans of up to 7,000 tonnes a year on 34,500 rai (5,520 hectares) of Doi Chaang land in Chang Rai. As a result we have to limit our coffee houses to only 600 in Thailand, and not over 300 outlets overseas,” Phitsanuchai said. Doi Chaang franchisees pay an entrance fee of Bt150,000 and a monthly fee at least Bt6,000 for a 40-square-metre branch. 

Return on investment is between 18 months and 48 months, depending on the location, Phitsanuchai said.

At present, Doi Chaang Coffee produces 3,000 tonnes of coffee a year on 15,000 rai. Half the total is exported overseas, with the rest distributed domestically. 

Doi Chaang Coffee has received a Thai Geographical Indication and EU Organic Farming recognition. 

It is a premium coffee that sells between US$10 (Bt357) and $20 per kilogram at a time when the average market price for the industry is between $3.50 and $4.20 per kilogram.

Doi Chaang Coffee was established in 2003 by Wicha Promyong, and Panachai Pisailert, the headman of the Doi Chaang village. 

The business was started over 500 rai. It produces quality Arabica coffee.

Phitsanuchai said that since the company was launched, it had gone from a local coffee to a premium coffee brand. But he said its financial results still showed net losses because its key to doing business was to focus on developing the quality of life of the Akha hilltribe, the Lisu hilltribe, and the Haw Chinese who live at Doi Chaang.

“Ten years ago, the hilltribes who stay in Doi Chaang had income from the sale of coffee beans that was on average Bt5,000 per rai per year,” he said. “But now they have income from the sale of coffee beans that is on average Bt45,000 per rai. This [raising the hilltribes’ income] is our motto to do this business,” he said.

He reiterated that Doi Chaang was a social enterprise that did not do business for net profits but to generate high incomes for farmers.

As a result, when the company expanded it was based on how to boost the income of the farmers.

He said the demand for premium coffee had strongly grown, especially for organically grown coffee.

This had the potential to boost Doi Chaang Coffee to achieve its target of having 900 franchised outlets in Thailand and overseas by 2020.