China’s Yunan province which is famous for its tea production, is increasingly turning its attention to coffee production as the drink gains popularity with younger consumers. In 1998 per capita consumption of coffee in China was 9.6 grams, and by 2012 it was 47.6 grams – a growth rate of 12.1% per year according to Euromonitor. While coffee production in Yunan, China is in its infancy, accounting for 0.75% of global production in 2012, Yunan coffee exports increased 38.2% at a value of US$150 million – an increase of 12.5% on the year and food companies are investing in coffee operations in the province. Nestle, the world’s biggest food company has been involved in coffee production in Yunan since 1988 purchasing beans from 2,200 growers, and Starbucks began purchasing Yunan coffee beans in 2007; going on to expand its presence in 2012 with a joint venture with coffee supplier Aini Coffee and by working with local growers to produce new varieties of beans. Although consumption and exports numbers are high, some local growers are concerned by low international prices last year causing a shift in target consumers from international companies to local wealthy Chinese customers.
To receive relevant news stories with summaries provided by GAI Research & Insight, subscribe to Global AgDevelopments, our free bi-weekly enhanced eNews service