What’s the Coffee Scene Like in China? Cozy and Becoming Cool

By Colleen Luckett

Part 1 of a two-part series on coffee in China.

Photo source:  https://www.comunicaffe.com/china-coffee-sales-to-increase-by-a-9-cagr-between-2012-2017/

Photo source: https://www.comunicaffe.com/china-coffee-sales-to-increase-by-a-9-cagr-between-2012-2017/

When we think of China and beverages, what comes to mind first? Tea? Exactly. But did you know they also have a burgeoning coffee industry? Cozy . . . and cool! Indeed, coffee production, largely based in Yunnan province, is a relatively new idea for China, but the younger generations have encouraged increasing focus on our favorite bean.

A Brief History

A French missionary first introduced coffee to Yunnan, known for its lush hills, in the late 1800s. However, the industry had its boon in the 1980s when Nestlé started operations there, offering training and purchasing coffee from growers. Since 2005, the number of China’s suppliers has grown from 147 to more than 2,000. Coffee provides a much higher return to Chinese farmers than other crops. In 2012, farmers’ income from coffee was double that for tea grown on the same acreage, according to the Financial Times. China has, in fact, risen from the 30th largest producer of coffee in the world in the mid-90s to one of the top 20 global coffee producers today.

Arabica Leading the Way

Most of the coffee produced in Asia – mainly in Vietnam and Indonesia – is robusta, the lower quality bean used in instant coffee. Yunnan’s specialty is the higher-quality arabica bean. Known for its light body and fruity aroma, coffee from the southwestern province of Yunnan has become a staple of European Arabica blends, say international commodity traders and roasters.

“The mild taste and aroma is similar to the beans from Honduras or Guatemala,” said Wouter DeSmet, head of Nestlé’s coffee agricultural services team in China.

The quality is inconsistent, however: too good for local consumption, but not good enough for specialty roasters abroad. A large percentage is exported to Germany. Most of what the Chinese drink is imported from Vietnam (the world’s biggest robusta producer), just over the border from Yunnan Province.

Markets and Trade

Photo source:  https://unsplash.com/search/photos/ chinese-coffee-beans

Photo source: https://unsplash.com/search/photos/ chinese-coffee-beans

According to Wikipedia, in Yunnan about half of the crop went to export markets in 2016, generating $280 million in earnings. Most Chinese coffee beans are commercial grade, and exports are primarily green beans sent to European markets. Major trading houses like Volcafe, the coffee arm of London-based commodities trader ED&F Man with an office in Yunnan, source from China to balance deficits in supply from traditional exporting countries during years of drought or crop rust.

The United States is also an export market for Chinese beans, with Starbucks purchasing more than half of the coffee imported into the U.S. from China in January-September 2014.

However, with rising anti-U.S. sentiment in the face of President Trump’s trade war, fast food restaurants like McDonald’s and Starbucks there may take a hit as citizens start turning toward local brands in a wave of nationalism.

In Part 2 of this two-part series on coffee in China, we’ll cover the rising popularity of the modern specialty coffee movement in this ancient part of the world.

Perry LuckettComment