Doi Tung turns to online after Ikea rolls back orders
The Mae Fah Luang Foundation, which runs the Doi Tung Development project, is beefing up online sales, aiming to tap the US and European markets in its fiscal 2019 and forecasting revenue of 582 million baht.
According to ML Dispanadda Diskul, the foundation’s chief executive, long-time partner Ikea just notified him that it will cut annual purchase orders to 15 million baht in 2019 from 60 million in 2018, reasoning that the global economy is poor.
The project started supplying weaving products to the Swedish furniture giant in 2011.
ML Dispanadda said ceramic products and handicrafts will be made available online soon.
The foundation reported revenue of 550.9 million for fiscal 2018 and 533.6 million baht in 2017.
Handicrafts contributed 29% of total revenue, followed by food (28%), cafes (13%), farm products (12%), tourism (11%) and gifts (7%).
ML Dispanadda said the foundation is in talks with department stores in the US and Europe to boost export sales and offset lower purchase orders from Ikea.
Contribution from exports is estimated to maintain 18-22% of total revenue in the years to come.
According to ML Dispanadda, the foundation is also committed to continuing developing Doi Tung coffee to become a premium product and ramp up coffee exports worldwide.
Doi Tung coffee is available in Asia and Europe.
Doi Tung was founded in 1988 by the grandmother of His Majesty the King on the edge of the Golden Triangle region bordering Myanmar, Laos and Thailand.
The foundation has exported coffee beans to Japan for years through Japanese partners such as Mi Cafeto Co and Kaldi Coffee Farm Co.
“We have been exporting coffee beans worth more than 10 million baht a year to Japan,” ML Dispanadda said. “Japan Airlines (JAL) is the latest partner buying our produce.”
The Doi Tung Development Project produces 250 tonnes of coffee beans annually, employing 800 households in the country’s highlands.
Some 30-50 tonnes of coffee beans are exported to Japan each year.
Doi Tung coffee is offered by JAL as part of its in-flight menu on service from Bangkok to Japan. The route carries 800,000 passengers a year and serves up to 300,000 cups of coffee.
ML Dispanadda said the collaboration with JAL will help expand the brand’s reach.
He voiced hope that the inclusion of Doi Tung coffee on flights would build further awareness of the product among Japanese consumers and, by extension, awareness of the Mae Fah Luang Foundation. JAL began serving the coffee on Dec 1.
According to ML Dispanadda, the foundation plans to restructure the Doi Tung cafe business after the unit generated 2.4 million baht in sales in fiscal 2018, which ended Sept 30.
The foundation operates 13 Doi Tung cafes, mainly in Bangkok and Chiang Rai.