Story behind the success of Caty dragon fruit noodles

At the end of October, the name Caty Foods emerged when it successfully closed a deal with "Shark" Nguyen Hoa Binh, chairman of Next Tech Group, on Shark Tank Vietnam - Billion Dollar Deal, for $1 million to own a 10% stake at Caty Foods.

Shark Tank Vietnam is a reality television series where start-ups seek investments from a panel of investors, broadcast on Vietnam Television.

One year ago, Caty Foods launched its dragon fruit noodle brand with a very viral promotional MV on social networks through the simple lyrics "The first time dragon fruit is in instant noodles".

The person behind the idea of putting dragon fruit into instant noodles and the author of the promotional song is Le Quang Huy.

The Investor talks with Le Quang Huy, chairman of Caty Foods Company Limited - the name behind the success of Caty dragon fruit noodles, about the ways he has helped dragon fruit growers overcome difficulties and how he is nurturing bigger plans "to do more for Vietnamese agricultural products".

Where did you get the idea of making dragon fruit noodles?

At that stage of my life, I did not need to start a business or find a new source of income. I was vice chairman of the Dragon Fruit Association in Binh Thuan province then, I am still now, and I owned 20 hectares of dragon fruit orchards.

Through my years of growing dragon fruit, I’ve come to fully understand the struggles farmers face. They work tirelessly from dawn until dusk, yet when harvest time arrives, many issues arise: unsold produce, plummeting prices, and situations where the cost of labor to harvest the fruit exceeds its market value. This is the harsh reality for many dragon fruit farmers, not just for me but for countless others, especially in Binh Thuan’s main growing regions.

Witnessing these challenges firsthand, I felt compelled to find a solution, not just for myself but for the entire farming community. Together with the association, I traveled to various countries to explore opportunities for exporting fresh dragon fruit.

However, the costs of packaging and preservation were significant obstacles. Dragon fruit’s thin skin and high water content require sturdy packaging to prevent damage, and its short shelf life makes long-term storage impossible, unlike fruits such as grapefruit or coconut.

Given these limitations, deep processing became the only viable path. This idea has been discussed for generations and has led to products like dried dragon fruit, juices, and even dragon fruit wine.

One day, while shopping at a supermarket, I noticed how popular instant noodles are in Vietnam. Almost every family, regardless of their income level, buys them in varying quantities.

It struck me that if we could incorporate dragon fruit into something as widely consumed as instant noodles, it would provide a significant outlet for deep-processed dragon fruit products. This idea could open new doors for the dragon fruit sector and create sustainable demand for farmers.

The success of dragon fruit noodles today cannot be without the product advertising campaign "For the first time, dragon fruit is in instant noodles" that went viral on social networks at the end of last year. It is known that the lyrics were written by you.

I am the one who wrote and rhymed the lyrics. With the mindset of a dragon fruit grower and vice chairman of the Binh Thuan Dragon Fruit Association, I wrote the song with hopes that listeners would love dragon fruit more and care more about the lives of dragon fruit growers.

Since the idea of making dragon fruit noodles arose, I began to conduct in-depth research, hired experts, and bought a testing production line. During the process, I encountered many difficulties, such as the flour used to make noodles and dragon fruit being two different materials; and simply chopping them up and mixing them together broke them immediately, not creating chewy, delicious noodles.

The time to cook the two ingredients was also different; dragon fruit was easy to cook, while noodles were difficult to do so. While waiting for the noodles to cook, the dragon fruit burned, but if you waited for the dragon fruit to cook until it was just cooked, the noodles became hard.

Therefore, there must be new techniques and new technology to do it, but investing in too much new technology would cause production costs to rise, making prices skyrocket and making the product difficult to sell.

After going through so many difficulties and worries, I thought there was a time when I had to give up. So when I succeeded, I had many emotions and composed a promotional song. Naming the company and product Caty, I started from the name of the Ca Ty River, which is associated with the people and land of Binh Thuan.

Viral advertising MVs on social networks have proved effective. But the instant noodle market is fiercely competitive. What keeps consumers after the viral effect passes?

I have to admit that the virality of the promotional clip helped the dragon noodle product grow too quickly, beyond our expectations. Orders came in more than we could have imagined; we had to increase production and recruit more staff to deploy the delivery and sales system. After more than a year, up to now, the company's production capacity has not met the demand.

I believe that the dragon noodle product can survive in the market because it goes in a very different direction. Many noodle brands today pay little attention to improving the nature of the noodles; the noodles are still high in starch and fried, making consumers worry about eating too much starch. They also think it's hot for the body and not good for health. Meanwhile, dragon fruit has many nutrients that are good for human health, such as aiding digestion, anti-aging, and cooling.

When dragon fruit is combined with instant noodles, it creates a nutritious dish, balancing the noodles.

Children love instant noodles; we believe that if we do not have clean, quality, and safe products, it is a great sin to the younger generation.

On the other hand, in the end, my happiness is not how many packs of noodles I sell or how much profit I make but that everyone, every household is interested in dragon fruit and in dragon fruit growers. In particular, manufacturers really want to find a way to put dragon fruit into their products, from lip balms and skin care products to cakes and ice cream.

The popularity of dragon fruit noodles is just the first step; surely you already have plans to develop later.

Yes, there is still a lot to do to develop dragon fruit noodles. The first thing is to invest in production lines, reduce costs so that the product can reach many consumers but still retain the nutrients of dragon fruit, and neutralize the coolness of dragon fruit with noodles.

At the same time, Caty Foods focuses on market development, not only domestically but also exporting around the world. I determined that if I wanted to go out into the world, I had to go to the U.S. first, because this is the most difficult market. Conquering it will make other markets easier.

In this market, the biggest difficulty is the technique and product quality. Thanks to the initial standardization, Caty noodles quickly passed the test. Currently, the company has a branch in the U.S., responsible for distributing products in the U.S. and Canada.

Next is the world's most populous market, China. Technically, Caty noodles have passed the U.S. market, so they easily meet the standards. However, we encountered difficulties in the selling price. But after many negotiations and clarifying production costs, the partner agreed to import goods.

In general, in these two markets, Caty Foods has met requirements in terms of product quality standards, food safety, brand, and price. The next thing to complete is the distribution system.

What is Caty Foods's development orientation?

I want to diversify products, not only noodles but also produce drinks and fish sauce.

With drinks, I want to go in a different direction. Caty alkaline ionized water is not purified water. This is a type of water invented by Japan. The Japanese government asked scientists to find ways to prolong people's lives; one of the solutions is to invent alkaline ionized water.

Regarding fish sauce, I want to follow the traditional fish sauce direction. Binh Thuan has many advantages in terms of natural conditions and good sunshine to create delicious fish sauce products.

At first, you wanted to sell a 5% stake for $1 million but later agreed to sell 10% to Shark Binh for the same price. Can you give us details about this deal?

Actually, to raise capital, we have many ways; my wish when going on Shark Tank is not only to raise capital but also to find talented, dedicated people to accompany Caty Foods to go far.

Moreover, $1 million is only the initial cost when Shark Binh joins the business; we also have a story behind it, such as building a factory and expanding the scale; Shark Binh will be the companion.

Caty is still quite young; we have just mastered the technology, built the brand, and widely promoted the products. Caty Food has not been proactive in production; we have to outsource, which makes it impossible for the company to optimize production and fully meet the needs of partners and customers.

Caty Foods has planned to build a factory and distribution system next year and to be self-sufficient in production. I also set a goal of bringing Caty Foods to the stock exchange in the next 4 to 5 years.

In general, I determined that this success cannot be kept to myself; if I want to go far, if I want to develop well, I have to make an IPO. I hope that when an IPO takes place, there will be new talents joining to help the business develop to new heights. Then, Vietnamese agricultural products in general and dragon fruit in particular will have more opportunities to develop.