Development Strategy of Coffee Industry in Yunnan

I. the course of coffee industry in Yunnan

(1) A brief history of introduction

The introduction of coffee in Yunnan is the product of foreign missionary work. After Burma became a British colony, British missionaries went to the Kachin region of Myanmar to preach, and the missionaries grew coffee for their own use. Then the Jingpo people in this area gradually began to grow coffee. Due to the cross-border residence of the Jingpo nationality, with the exchange of visiting relatives and friends and intermarriage, coffee entered the inhabited area of the Jingpo nationality in Yunnan Province of China, which is now Ruili City, Dehong Prefecture, about 1893. [1] in 1892, Tian Deneng, a French Catholic missionary, was sent to preach in Zhu Kula Village, Binchuan County, Dali. in the same year, he funded the construction of Zhu Kula Catholic Church. Tian Deneng planted the first coffee tree in Binchuan next to the church. [2] however, Yunnan did not form a coffee industry before liberation.

As far as the whole of China is concerned, Taiwan Province of China was the first to introduce. The history of trying to grow coffee in Taiwan can be traced back to the 10th year of Guang Xu (1884). The British of Dadao Chengdeji imported coffee seeds from Manila in the Philippines and began to grow them in the three Gorges. The early introduction and expansion of coffee in Taiwan and the later formation of a unique coffee culture are related to foreign trade and Japanese occupation of Taiwan, as well as Taiwan's own characteristics and climate. [3]

It is Hainan Province that has really realized the preliminary industrialization. The large-scale introduction and expansion of coffee in Hainan Island is the coffee planting history of patriotic overseas Chinese and Chinese people. Mr. Chen Xianzhang, a patriotic overseas Chinese, realized the industrialized cultivation of coffee in the earliest time in China (1935-1953). The whole family went to the island to set up two farms to develop the coffee industry on a large scale. Chinese coffee was exported to overseas markets for the first time and managed painstakingly for 15 years. [4] after that, it declined due to the adjustment of the country's economic structure and political movements.

(2) the start of the industrialization of coffee in Yunnan (1952-1961)

In order to meet the needs of Eastern European countries and the Soviet Union in the 1950s, Yunnan Province promoted the development of Lujiangba coffee in Baoshan City, making Lujiangba the first small seed coffee production base in the country.

In this way, Lujiangba in Baoshan City has become the scientific research center and birthplace of small seed coffee in China, which has played a positive role in coffee production.

Yunnan Province began to develop coffee production in the mid-1950s, mainly planted in Shuangjiang Farm and Dehong Sub-Bureau Experimental Station in Lincang area, covering an area of 18.67 hectares, and also planted in small areas such as Chaofang, Hekou, Lujiang, Jinghong and Olive Dam.

Because the local environment is suitable for coffee growth, since 1957, the farms have developed in a large area, and the first and most wonderful part in the history of Yunnan agricultural reclamation coffee planting has appeared.

In 1960, the planting area of the whole reclamation area reached 2186.67 hectares, accounting for about 60% of the planting area of the province and about 1% of the cultivated area of the whole country.

During the first peak period from 1952 to 1961, the coffee planting area in China was mainly in Hainan Island and Yunnan Province, with a total area of 5066.67 hectares, of which Hainan Island was 1426.67 hectares (cultivated variety is Robesta). Yunnan is 3644 hectares, of which 2186.67 hectares are cultivated in Yunnan, accounting for about 60%. The rural area of the province is 1457.33 hectares, accounting for about 40% (the cultivated variety is Arabica). [5]

At this stage, under the guidance of the national planned economy, Yunnan coffee had the first period of rapid development and realized the scale of planting.

(3) the low period of Yunnan coffee (1962-1980)

Since 1962, China's coffee industry has entered a depressed period affected by the following four factors: (1) the continuous deterioration of Sino-Soviet relations and the closed-door policy and imperialist blockade at that time; (2) national macroeconomic adjustment, the focus of national agriculture is to solve the food problem related to the food and clothing of the people. (2) especially during the ten-year turbulent Cultural Revolution, the consumption of coffee was also regarded as an asset-price lifestyle, with limited sales in the domestic market, falling prices and setbacks in exports; (4) serious diseases and insect pests in coffee planting areas. seed expansion and yield are restricted.

In view of the above factors, during this period, a large number of unproduced coffee trees in Yunnan were destroyed. by 1970, only two farms in Lujiang and Xincheng had left 37.07 hectares. Although it has recovered somewhat since then, by 1980, the planting area of the whole reclamation area was only 78.53 hectares. [6] Coffee acreage shrank by an astonishing 96% during this period. It can almost be said that the coffee industry in Yunnan is not the same industry as the coffee industry before 1980, and it is no longer the same thing.

(4) the recovery period of Yunnan Coffee (since 1980)

With regard to the description of this section, the editor reviews the material and has a variety of phased descriptions. However, the editor believes that the development of the whole coffee industry in Yunnan since 1980, like many industries that have developed and changed with the whole historical process of China's reform and opening up, has bright spots, ups and downs, successes and failures. But the main difference is that coffee cultivation in the land reclamation system dominated by the planned economy is slowly and gradually transformed into the planting behavior of market-led coffee enterprises and cooperatives. At this stage, with the strong support of the government, the planting area of coffee in Yunnan has gradually expanded and the export volume has gradually increased, but the so-called industrial chain has not been formed.

Second, the present situation of coffee industry in Yunnan.

(I) Overview of global coffee production and marketing in 2016

From the above chart [7], we can see that the global coffee consumption is increasing year by year, and the output fluctuates little, while China, or Yunnan, is not in the top five in the whole global industry chain. On the other hand, at present, the coffee industry in Yunnan is insignificant in the global coffee industry chain.

However, on the other hand, from 1998 to 2012, China's coffee consumption rose from 199000 bags to 1.1 million bags, an annual growth rate of about 12.8%. The total population of our country is about 1.3 billion, and the per capita coffee consumption has increased from 9.6g to 47.6g, with an average annual growth rate of about 12.1%. [8]

In 2016, China's per capita coffee consumption continued to rise from 47.6g to 90g raw beans (5 cups) per person, with an annual growth rate of about 17.26% (117000 tons) compared with the same period in 2012.

If we maintain a growth rate of 17.26%, by 2020, China's coffee consumption will reach 4.51 million bags (270000 tons) and China's per capita coffee consumption will be 208g (12 cups). [9]

Like other industries, coffee has become an important member of China's FMCG market based on China's huge market demand and growing consumption. With the growing demand and imaginative space to be developed, everyone has a new expectation for coffee.

(II) Coffee cultivation and export in Yunnan in 2016

Statistics at the end of the 2016 harvest season showed that coffee production in the province reached 139000 tons, an increase of 21000 tons over the 118000 tons in the 2014-2015 harvest season. Coffee has been planted in Pu'er, Baoshan, Dehong, Lincang, Wenshan, Xishuangbanna and other 9 states and 35 counties. By the beginning of 2016, the planting area of coffee in Yunnan had reached 1.77 million mu, with a total output of 139000 tons, accounting for more than 99 percent of the country's total and about 1 percent of the world's total output. [10]

There is no doubt that according to the data alone, Yunnan coffee already accounts for 99% of China's coffee production. Compared with the situation analyzed in the previous section, Yunnan coffee seems to have achieved a round of "Phoenix Nirvana". From a sharp decline in acreage, Yunnan coffee has rapidly grown into the absolute overlord of national coffee cultivation in the past 30 years. It is these persuasive and deceptive figures that make Yunnan coffee industry employees and local governments show a certain degree of excitement and have a certain imagination for a certain beautiful vision.

According to the statistics in the above chart, China imported 84000 tons of coffee and exported 85000 tons of coffee in 2016. What does that mean? Even from these two simple figures, we can see that Yunnan coffee is only a raw material for foreign investment and has little to do with China's growing coffee market. From the real value chain analysis, the status of Yunnan coffee industry since 1980 is only the end of the global coffee industry value chain, that is, the end of the raw material base. Up to now, Yunnan coffee industry has not got rid of the status of "industrial colony".

(3) an ambitious government

The people's Government of Yunnan Province issued document (2017) No. 7 on the Development Plan of Modern Agricultural Industry with Plateau characteristics of Yunnan Province (2016-2020) on January 13, 2017.

Development direction: take green development as the direction, supply-side structural reform as the driving force, market-oriented, science and technology as the support, enterprises as the main body, industrialization as the starting point, fine coffee as the guide, institutional and institutional innovation as the guarantee, speed up the transformation of the development mode of the coffee industry, optimize the industrial layout, strengthen the base construction, improve the processing and market system, and strengthen quality and safety. Continuously improve the level of specialization, scale, standardization, intensification and informationization of the coffee industry, extend the industrial chain, enhance the value chain, promote the integrated development of the primary, secondary and tertiary industries in rural areas, and start the brand of "Yunka". Strive to build our province into an internationally famous base of high-quality coffee raw materials, the largest coffee processing center in China and the largest coffee trading center in Asia.

Development goal: by 2018, the total agricultural output value of the coffee industry in the province will reach 3.6 billion yuan, and the agricultural added value will reach 2.3 billion yuan, driving the per capita income of employed farmers to reach 2900 yuan. The comprehensive output value of the whole industrial chain has reached more than 23.7 billion yuan, of which the primary output value has reached 3.5 billion yuan, the agricultural product processing output value has reached 6.7 billion yuan, and the tertiary output value has reached 13.5 billion yuan. The annual per capita comprehensive income of employed farmers from industry reached 3700 yuan. The planting area is stable at about 2 million mu, the annual output of raw coffee reaches 150000 tons, the proportion of fine coffee has increased from the current 3 per cent to more than 5 per cent, and the proportion of highly processed products has increased to more than 20 per cent. There are 15 leading enterprises at or above the provincial level, 10 standardized production demonstration parks and 30 high-standard primary processing plants.

By 2020, the total agricultural output value of the coffee industry in the province will reach 5.5 billion yuan, and the agricultural added value will reach 3.5 billion yuan, driving the per capita income of employed farmers to 3800 yuan. The comprehensive output value of the whole industrial chain has reached more than 31.8 billion yuan, of which the primary output value has reached 5.4 billion yuan, the agricultural product processing output value has reached 8.9 billion yuan, and the tertiary output value has reached 17.5 billion yuan. The annual per capita comprehensive income of employed farmers from industry reached 4200 yuan. The planting area has stabilized at about 2 million mu, the annual output of raw beans has reached 200000 tons, the proportion of fine coffee has increased from about 5% to more than 8%, and the proportion of intensive processing has increased to more than 30%. There are 20 leading enterprises at or above the provincial level, 20 standardized production demonstration parks, and 50 high-standard primary processing plants.

Industrial layout: considering the scale, resource conditions, geographical location and market space of the development of coffee industry in the province, the layout is core area, key area and leading area. Longyang District, Simao District, Ning'er County, Mojiang County, Menglian County, Lancang County, Mangshi City, Yingjiang County, Zhenkang County, Gengma County, Yun County and other 11 major production counties with an planting area of 100000 mu and an output of more than 5000 tons are the core areas. Jinggu County, Jiangcheng County, Jinghong City, Linxiang District, Shuangjiang County, Yongde County, Cangyuan County and other 7 counties, cities and districts with a planting area of 50, 000 mu and an output of more than 3000 tons are key areas. Nine counties, cities and districts with outstanding regional characteristics, obvious regional product value and potential for development are Binchuan County, Lushui City, Menghai County, Hekou County, Malipo County, Fengqing County, Longchuan County, Ruili City and Longling County.

(4) the other side of Yunnan coffee industry

Does anyone think of the emperor's new clothes? Today, Yunnan coffee is only in the planting, primary processing and raw material sales stage of the coffee industry chain. The editor interviewed some heads of Yunnan coffee enterprises and relevant employees. At present, Yunnan coffee is lively, and even Foreign Minister Wang Yi is shouting hard for Yunnan coffee. However, it is not wishful thinking and good self-feeling that determines the growth and development of an industry, but the objective laws of business and industrial development. The following questions are just a brief summary of some of the problems of Yunnan coffee.

1. Extensive planting end

The land reclamation system has been disintegrated, and from the perspective of planting industry, from the perspective of modern agriculture and modern forestry, most coffee growing areas in Yunnan Province are still in a very extensive and low-end coffee planting stage. Most coffee growing areas in Yunnan Province have high mountains and steep slopes, poor planting conditions and backward traffic conditions. Due to the lack of funds, the construction quality of coffee garden is poor, the standard is low, the soil erosion is serious, the soil fertility is declining, and the construction of roads and water conservancy facilities in coffee garden lags behind, and the ability to resist natural risks is weak. it seriously restricts the high yield, high quality, high efficiency and sustainable development of coffee industry. In spite of this, Yunnan coffee has grown rapidly, expanded its scale and formed a large stock.

2. Processing industry is small, scattered, weak and chaotic

Based on the situation of the above planting base, it is conceivable that the primary processing link in Yunnan coffee industry is naturally in a "supplied material processing" stage, or the initial processing link built by the base itself. At present, there are enterprises and individuals engaged in processing and acquisition, but few enterprises have reached a certain scale. In terms of processing technology and technology, it is the most basic primary processing for the purpose of providing raw coffee raw materials for the lower reaches. Therefore, these seemingly "enterprise" processing enterprises are only supporting the raw material planting base. Even for some enterprises that claim to have a 10,000-ton deep processing production line, the true sales volume and market coverage of their products have never been reported, and only this one knows whether it is a valuable deep processing in the end. On the contrary, there are a large number of "small grains of coffee" marked with "Yunnan specialties" in tourist scenic spots and street stalls, promoting them at low prices with all sorts of strange shapes, and there is a "chaos of prosperity."

3. Only category, no brand

The coffee industry in Yunnan has been restarted since 1980. After more than 30 years of development, Arabica small seed coffee has become well-known at home and abroad. However, this popularity does not belong to an enterprise, nor does it belong to a product, it is only a category, thanks to Yunnan's unique geographical and climatic conditions to grow out of the product attribute. The attribute of the category, like a blurry figure, can be attributed to Yunnan or small grains of coffee; it can be attributed to Yunnan coffee or to any product sold to consumers after deep processing of Yunnan coffee beans, which can even be traced back to the unique vision of a missionary. In short, it has not brought any cognitive dividend to the coffee industry and enterprises in Yunnan, at least not as much as people think.

4. Can't make money.

Over the years, foreign coffee companies have helped Yunnan coffee improve varieties and planting techniques, and done a lot of work. However, today, as there is only the growing end of Yunnan coffee, it has become a "surplus industry" that worries about every time it is sold. In fact, over the years, with the process of reform and opening up, the enterprises at the top of the value chain of the global coffee industry chain have gradually entered China and gradually mastered the data, production capacity and quality of Yunnan coffee. And through continuous order trade and order planting to grasp the voice of the sales end of Yunnan coffee raw materials, and then grasp the pricing power. The pricing power of the purchase price of coffee raw materials is in the hands of foreign companies. If they do not set the price, no one dares to set the price, and no one can sell the goods. Behind those beautiful import and export figures is the tragic situation in which Yunnan coffee has been reduced to a supply of cheap raw materials for foreign companies. Coffee growers make a profit and lose money for two years, and coffee farmers cannot afford price fluctuations, some cut down trees, and some are abandoned. Enterprises and farmers can not make money, naturally do not have the ability and willingness to invest in the improvement base, and there is no way to extend the industrial chain and upgrade the level of modernization.

5. Self-righteousness and self-deception

However, what is more frightening than the above problems is the self-righteousness and self-deception of Yunnan coffee industry, from government to enterprises. Yunnan coffee industry has been playing the role of providing coffee raw materials and has become the raw material base for multinational coffee enterprises such as Nestl é and Starbucks. The export figures in 2016 are increasing, it seems that the coffee industry in Yunnan has made progress, but in fact coffee enterprises cannot survive without export tax rebates. In the process of economic restructuring in the past decade, especially in the last five years, the so-called coffee leading enterprises, large coffee growers and deep processing enterprises in Yunnan have long been insolvent without the intervention of development finance or state-owned capital. and the industry it is engaged in has become a hot potato that the government and banks have to rescue and have to pull because it widely involves poor counties and livelihood issues. At present, in the face of such a huge planting stock, a coffee industry that no longer makes money and is related to countless people in poor areas to shake off poverty and increase income and become rich, Yunnan Province's plateau characteristic agricultural industry development plan involves the content of the coffee industry (which has been quoted at full length earlier), and still treats the "coffee industry" with "agricultural thinking", which has to make people worry about the future of Yunnan coffee industry.

Third, the analysis of deep-seated cognitive problems of Yunnan coffee industry.

CHAPTER THREE

(1) Coffee industry has been globalized

Any industry is the product of social division of labor caused by the continuous development of productive forces, and it is a meso-economic concept between macro-economy and micro-economy. It is a general term composed of various related industries with interrelated interests, with different division of labor, although their mode of operation, business form, enterprise model and circulation links are different, but, their business objects and scope are carried out around common products, and can complete their own cycles within the various industries that make up the format.

From the perspective of coffee industry, it not only involves the cultivation of coffee beans, but also inevitably includes scientific research, planting, primary processing, deep processing, warehousing, logistics, trading, standardization, financialization and so on. Today, the coffee industry has long been globalized. European and American enterprises represented by Nestl é and Starbucks, the coffee farmers, baristas and roasters qualification system represented by the American specialty coffee association (SCAA) and the European specialty coffee association (SCAE) (the two organizations merged into one in January 2017), and the coffee futures trading centers represented by the New York Commodity Futures Trading Center and the London Futures Trading Center The whole industry chain and value chain of coffee, the second commodity in the world after crude oil, have been laid out and controlled at the core. Although there seems to be competition among multi-brand, multi-variety and multi-level coffee products and coffee enterprises in the market, in fact, the global coffee industry is firmly in the hands of European and American enterprises, from futures trading centers to pricing power, from coffee delivery standards to planting standards, from coffee quality to the taste of different varieties of coffee, and even the expression words of coffee taste, everything. Has been controlled by a very small number of oligarchic enterprises and institutions.

With the upsurge of reform and opening up, foreign capital, enterprises, brands, technology and talents have entered China and Yunnan. Over the past 30 years, Yunnan coffee industry has long been a part of the global coffee industry. A large part of the coffee we drink at Starbucks comes from the base in Yunnan, but we don't think we are drinking Yunnan coffee, we think we are drinking Starbucks. The existing coffee technical standards in Yunnan and the baristas in the coffee shops dotted with Lijiang in Dali also hope to be certified by European and American institutions to reflect their professionalism and value.

The tide of globalization is irreversible, with the passage of time and the development of the times, Yunnan coffee industry will only be more integrated into the global coffee industry chain, but can not be closed because of administrative divisions, independent into a kind of detached existence. If there is, it is an illusion. The stories told by taking advantage of national feelings and local consciousness, and the idea of roasting Yunnan coffee on the stove of "revitalizing the national coffee industry" are either out of ignorance or bad intentions.

(2) the planting area of raw materials is not an advantage at all.

Among the top five global coffee exporters described above, we found that the top five exporters were all developing countries or third World countries. Brazil is the world's largest coffee producer, but it has not benefited much from it. In fact, precisely because of Brazil's huge planting stock, and the market and pricing power are in the hands of foreign companies, Brazil is very helpless and passive in the fluctuations of the world economy in recent years, affecting even its currency and exchange rate. not to mention the domestic real economy. If the coffee planting base is large and can have a say in the coffee industry, then Brazil has long been the leader of the global coffee industry. Unfortunately, there is nothing new under the sun, from oil to coffee, from rice to soybeans, any country, region or enterprise that is at the raw material end of the industrial chain has the least say, and there is no need to give more specific examples here.

Yunnan currently accounts for 1% of the world's coffee acreage and 99% of the country's. This means two things: first, the vast majority of China is not suitable for growing coffee; second, China's coffee acreage is negligible and insignificant in the world.

This also means that if we can not enhance the added value of Yunnan coffee, extend the industrial chain, gradually expand from the raw material end to sales, brand, finance and other higher dimensions, Yunnan should reduce the planting area, not expand. In fact, the coffee planting area in Hainan Province has been shrinking, and the current planting area is far lower than that of the early Hainan land reclamation. However, Hainan focuses on creating "Fushan Coffee", inherits and carries forward the characteristic industrial spirit of Mr. Chen Xianzhang, a patriotic overseas Chinese, creates a characteristic town, and emphasizes brand building and the promotion of added value. it is very possible to embark on an innovative road of the joint development of characteristic agriculture, processing and manufacturing, and tourism culture.

(3) what the hell is the coffee trading center?

At present, coffee futures in New York and London have basically monopolized the global coffee futures market. Since 1988, the purchase price of coffee in Yunnan has also basically referred to the international futures price, with the coffee futures price of the New York Mercantile Exchange (now incorporated into ICE Intercontinental Exchange) minus a small amount of transportation costs (not only transportation costs will be deducted but also certain price losses will be lost in the way of "discount"). In other words, at present, the global coffee pricing power and Yunnan coffee purchase price pricing power are in the hands of others.

To this end, some people hope to build a coffee trading center in China and Yunnan to seek pricing power. According to the results of public information inquiry, coffee spot trading centers have been set up in Shanghai, Chongqing, Kunming and Pu'er. Without exception, these trading centers all aim to obtain the pricing power of coffee, carry out spot trading in advance, and gradually seek futures trading. However, futures trading is a standard financial transaction, which is strictly controlled by the state, and the possibility of spot trading centers in the above places being able to carry out futures trading is extremely low.

In March 2017, Zhengzhou Commodity Exchange and Yunnan Securities Regulatory Bureau held a forum on the feasibility of coffee futures in Kunming. Regardless of the conclusion of the forum, at present, the global coffee planting area has reached 1.8 billion mu, with an annual output of nearly 10 million tons, while the annual consumption is only more than 8 million tons. The commodity economy is a surplus economy, and coffee cannot be spared. On the whole, supply must exceed demand, which further shows that the raw material supplier has no status and it is difficult to make money. On the other hand, Yunnan accounts for only 1% of the world's coffee production, while China accounts for only 2.25% of the world's consumption. Compared with the major consumer countries, especially Europe, the United States and Japan, it is impossible for China's demand side to have a say. Even if Chinese demand grows rapidly in the next decade, it will still be an unusually arduous and long journey for our futures to have pricing power.

Through the construction of a trading center, whether spot or futures, looking forward to a decade according to China's current coffee production and consumption, it is still a pipe dream to get the pricing power. Even so, the relevant government and some coffee companies are still keen to engage in trading centers and depict a beautiful vision of "seizing pricing power", mainly hoping to seek practical interests in terms of political achievements, loans and image through symbolism. To put it bluntly, even if all kinds of coffee futures or spot trading centers are built, it will not help Yunnan coffee to seek pricing power.

(4) what is Yunnan coffee?

The main variety of coffee in Yunnan is Arabica, the so-called small-grain coffee, commonly known as Yunnan small-grain coffee. The high-quality geographical and climatic conditions in Yunnan provide good conditions for the growth of coffee, which is very similar to Colombia, that is, low latitude, high altitude and large temperature difference between day and night. The small-grain coffee produced is mellow by cup quality analysis, and its quality and taste is similar to that of Colombian coffee.

The quality of coffee depends on many factors, such as growing environment, climate, cultivation and management techniques and so on. Its best growing environment is low latitude, high altitude, sufficient rainfall and suitable sunshine. Therefore, the area between 15 degrees north latitude and the Tropic of Cancer is an ideal growing area for coffee in the Northern Hemisphere. However, other areas in this zone, such as Hawaii and Saudi Arabia, or low altitude or little rain in the desert, are not conducive to coffee growth. Only southern Yunnan, which is in this zone, has all kinds of conditions. According to the determination of experts, small seed coffee should be planted in the mountains at an altitude of 800 to 1800 meters above sea level. If the altitude is too high, it will taste sour, and if it is too low, it will taste bitter.

The main producing area Yunnan has a good ecological environment for the growth of coffee, most of which are cultivated in mountains and slopes above sea level, with fertile soil, sufficient sunshine and abundant rainfall, especially the large temperature difference between day and night, which is conducive to the accumulation of inclusions. the coffee beans produced are uniform and full, rich in oil, mellow in taste, high in aroma, with the unique flavor of "strong but not bitter, fragrant but not strong, slightly fruity". After the international coffee organization tasting experts visited the coffee planting and primary processing bases in Yunnan, Yunnan coffee was rated as the highest quality coffee in the world, such as Colombian wet-processed small seed coffee. [11]

With the thick cultivation of heaven and earth, Yunnan coffee has become the highest quality coffee in the world. However, if we replace the word "coffee", won't other plateau agricultural products in Yunnan be the best and the first? Product quality comes first, but it does not nourish Yunnan in the process of transforming products into commodities and commodities into capital and profits.

At present, from the perspective of the industrial chain, the so-called coffee industry in Yunnan is actually only "coffee cultivation and primary processing industry"; the so-called "Yunnan coffee" is only "small Arabica coffee raw beans produced in Yunnan." If the coffee industry in Yunnan wants to break through from the above accurate and narrow space, it is bound to take the road of industrial upgrading.

(5) what are the advantages of China's coffee industry?

As a meso-economic industry, it inherits the macroeconomic development demands of the government and the microeconomic interests of enterprises. To put it simply, the government hopes that industrial development will promote local economic and social development, and the concrete implementation is that an enterprise engaged in this industry is making profits, making money, and can grow sustainably, make better profits and make money.

According to statistics, Yunnan produced about 139000 tons of coffee and exported 85000 tons in 2016. So, is the difference of 54000 tons for domestic sales? No. Due to the management level of Yunnan coffee producing areas and the climate change every year, some coffee is difficult to meet the requirements of foreign procurement. The pricing power and trade volume of raw coffee beans are in the hands of foreign investors. in fact, some large coffee enterprises in China and the province are only foreign distributors at home. In order to survive, they have to lower the price on the basis of foreign quotations in order to buy coffee from farmers. If it comes to the harvest season, the legendary story of "overharvesting" will still be staged.

Driven by this "small profit and quick turnover" model, the planting area of coffee in Yunnan has almost been forced to expand, and only low-income people in poor counties are willing to grow this crop. In order to survive, coffee companies in Yunnan have begun to grow coffee in Southeast Asian countries with lower land and labor costs. Once they have the choice of cash crops with higher incomes, they must choose to cut down the coffee trees and plant something else. 85000 tons of export-oriented coffee is almost the best part of Yunnan coffee. The coffee that can not meet the requirements of foreign procurement is used by Yunnan coffee processing enterprises to make instant coffee and sell it at a low price. Yunnan coffee planting industry, not in 2016, but a long time ago, has shown a serious problem of overcapacity of low-end products.

On the other hand, with the upgrading of domestic consumption, the in-depth spread of foreign culture, and the formation of consumption concepts among young people, coffee fast consumer goods in Chinese mainland showed an explosive growth. China is traditionally an exporter of coffee, but with the continuous development of the domestic consumer market, China's import and export trade has increased at the same time, and has become a net importer of coffee in 2011. [12] just take Starbucks as an example, from more than 400 stores in 2011 to more than 2300 stores in 2016. It is said that Starbucks is committed to realizing its vision of operating more than 5000 Chinese mainland stores by 2021. [13]-what kind of multiplication is this? Behind this doubling performance is the rise of the entire Chinese coffee consumption market.

On the one hand, Yunnan coffee cannot be sold; on the other hand, domestic imports continue to grow and the domestic consumer market continues to flourish; foreign businessmen buy Yunnan high-quality coffee raw beans at low prices, paste their own brands through their own channels, and sell them to the Chinese people at high prices. Is this story deja vu? Judging from the doubling number of Starbucks stores at high speed, according to the law of industrial development, China's coffee consumption market is in its infancy, because only the initial stage can stimulate such a high growth rate. Objectively, foreign-funded enterprises represented by Starbucks have indeed cultivated consumers' consumption habits and improved their cognitive level. In this sense, China's coffee consumption market will inevitably give birth to a number of coffee enterprises, who enjoy the initial dividends of China's coffee consumption market in the microeconomic field, and gradually cultivate the transformation and upgrading of China's coffee industry in the meso field. in the macro field, it has promoted the growth of China's domestic demand and contributed to the improvement of the total national economy and the quality of life of the people.

However, this no longer has much to do with the "Yunnan coffee industry". "Yunnan coffee accounts for 99% of China's coffee production" has nothing to do with the "rapid growth of China's coffee market". The real advantage of China's coffee industry is the same as white goods, mobile phones and other industries eventually counterattack foreign enterprises and domestic brands catch up from behind. It has nothing to do with where the country of origin is. It is only related to China, the world's largest single market with a population of 1.4 billion, political stability, a strong national defense force, sustained economic growth, a savings rate of 50%, a urbanization rate of just over 50%, and a per capita disposable income increasing year by year.

If China's coffee industry, or Yunnan's coffee industry, has a way to revitalize and develop, it must not come from the support of government documents, nor from the expansion of planting area, let alone from the futures spot trading center of castles in the air. This road, if it exists, has and only arises from those enterprises that really grasp the laws of the market economy and the upgrading trend of Chinese consumption, build product quality through excellence, brand operation, channel development, customer service, and realize the combination of industry and finance. At the foot of the enterprise, rely on them to work hard, step by step out.

IV. A possible way out for Yunnan coffee industry

CHAPTER FOUR

(1) respect the law, seek truth from facts, have an overall vision, and find a position

The development of coffee industry in Yunnan can be divided into two stages: the stage of planned economy before 1980 and the stage of integration into the global industrial division since 1980. The 96% drop in acreage indicates the demise of the coffee industry in the planned economy before 1980. Objectively, with the gift of natural conditions and the contribution of people of all ethnic groups, Yunnan has integrated into the global industrial chain division of labor and entered the global coffee value system with the development of Yunnan coffee industry since 1980. but it has also become a monopoly in the field of coffee cultivation in China. At this stage, Yunnan coffee trained talents, educated the masses, had a more objective stock, produced the best quality coffee in the world, and these high-quality coffee raw beans are still very cheap.

At present, the coffee industry in Yunnan is in a state of "overcapacity", and it is impossible to obtain the pricing power and industrial upgrading plan of surplus products through any opportunistic way in the short term. Yunnan coffee industry, which is at the end of the global coffee industry chain, must maintain a high degree of sobriety, not only have a profound sense of suffering, but also have a high degree of confidence to jump out of Yunnan to see Yunnan coffee. Standing in the global economic pattern changes, China's rapid economic growth and will soon become the first global economic trend of the general pattern, re-understand the significance and status of Yunnan coffee industry stock resources.

He who does not seek the overall situation is not enough to seek a domain. Considering the upgrading of the coffee industry in Yunnan, whether from a macro, meso or micro point of view, it is a standard supply-side structural reform, a problem of how to upgrade the low-end manufacturing industry to the middle and high end, and how to act in accordance with market laws and economic laws. How to create the scarcity of cognition and supply in the market, and then gradually evolve in the dimensions of products, brands, enterprises, industrial finance and industrial standards, so as to share different echelon profits of the industrial chain with global competitors.

At present and for a period of time in the future, Yunnan coffee industry and its employees, or Chinese coffee industry employees, should not only be far-sighted, but also seek truth from facts, find the current position, do not aim too high, and avoid belittling themselves. However, no matter how it is positioned, there is only one leading positioning, that is, as a participant in the division of labor in the global coffee industry, it should change from passive to active, from backward to advanced, from government-led and guided in the past to market-led, value-driven and profit-driven. Consider their own irreplaceability and create the scarcity of products and services worthy of market and consumer recognition, dare to make profits and dare to compete. Dare to fight an uphill battle and reorganize the mountains and rivers. It can be said that there is almost no problem of upgrading in Yunnan coffee industry, the so-called upgrading is to directly create a new species, a new way of division of labor and market farming in the coffee industry. There is nothing like the so-called innovation-driven.

(2) the potential energy of the upgrading of Yunnan coffee industry

In the face of the rapid growth of China's coffee consumption market, looking back at the above-mentioned problems of Yunnan coffee industry, we can also see a series of advantages. How to gather these "potentials" into "potential energy", how to transform them into "kinetic energy", and how to finally achieve the goal of industrial upgrading in one by one technological action is not an academic issue or a policy issue, but a practical direction. There is no standard answer to how to do it, or real business never seeks answers, only results. This article only leads to questions for those real practitioners to think about, hoping to bring a little help to their journey.

First, China's coffee consumption market is escalating with the upgrading of consumption in the whole country. With the increase of the total amount of the market, the multi-level coffee consumption system has been gradually formed. More and more diversified consumer demand and product innovation call for the upgrading of the coffee consumption market, and the changes in the market also give birth to more and more product and service innovation. With the transformational transformation of the traditional business format by the Internet, new opportunities continue to emerge. The king of the past may not be the king of the future, and the new market must belong to those enterprises that can find or create new scarcity.

Second, coffee consumption culture points to different varieties of coffee from different countries and different producing areas. Coffee import is a kind of "rigid demand", but Yunnan coffee production should also have its own place. On the other hand, Yunnan coffee is also a "rigid demand" pointed to by coffee consumption culture for consumers in foreign markets, and the development and cultivation of overseas markets are worth looking forward to. As far as the current stock market is concerned, the real big market is the European Union, the United States, Japan and South Korea, Yunnan coffee enterprises, or China's coffee industry and related enterprises. They should have the confidence to go out in today's globalization and develop overseas markets. And go to the middle and high end of the industrial chain.

Third, the producing area of Yunnan has the realistic conditions for producing and supplying the best quality coffee in the world, while the Yunnan coffee industry, as a producing area, has the advantages of raw material cost and supply, and has the potential to open up a high-end coffee consumption market. more standby cost-effective extreme experience products, to kill the possibility of domestic coffee fast consumer product market prices raised by foreign-funded enterprises. We believe that entrepreneurs and pioneers in other areas of China, especially the Internet, have provided sufficient examples of where the business model is, how to seize the opportunity, how to educate consumers, and how to focus on how to go to the extreme.

Fourth, the Yunnan plateau characteristic agricultural industry planning and other supporting industrial policies quoted earlier will help the coffee industry to implement the "combination of production and finance" and promote the upgrading of the industry with the leverage of capital. it also helps enterprises to sing their own plays on the platform of the government.

Fifth, in the previous stage of low-end product overcapacity cycle, a large number of Yunnan coffee enterprises have been in a low-profit operation or dying state, at this time the intervention of strong capital resources, under the guidance of a correct strategy, will integrate coffee planting enterprises throughout Yunnan Province at a very low cost and very fast speed to form a trust at the planting end. It is no exaggeration to say that the integration of coffee growing enterprises and bases in several major states in Yunnan Province is equivalent to the integration of China's coffee growing industry.

Sixth, Kunming, Yunnan is one of the few cities in the world that are the most suitable for coffee storage. Over the past few years, governments at all levels and related enterprises have been keen to build coffee trading centers, but few people really understand that standard warehousing and delivery centers are far more important than trading centers for bulk raw material products. With the promotion of the construction of the five networks in Yunnan Province, infrastructure construction such as highways, railways, aviation, energy and Internet will support Kunming in Yunnan to gradually become a radiation center city facing South and Southeast Asia. As a result, Kunming is faced with a huge and single currency (RMB) coffee consumption market, connecting the main coffee producing areas of China and Southeast Asia, and then connecting Africa and South America through the sea outlets of these countries. The construction of the standard warehouse of coffee and a series of supply chain financial products derived from it, aiming at the currency settlement and payment of different currencies in different countries, and even the currency swap relying on BRICS banks, the fairness and facilitation of trade and investment, are the financial channels and price formation mechanism that can jump away from the traditional futures market. With the promotion of Belt and Road Initiative and the promotion of heavy-haul railway, the game between land power and sea power, the game between Eurasian and outlying island civilization, a series of grand pattern changes may eventually evolve in a cup of coffee.

(3) A possibility

Through a superficial analysis of the past and current situation of Yunnan coffee industry, this paper points out that Yunnan coffee industry is facing a series of problems, such as overcapacity, low-end products, dependence on exports, disconnection with domestic demand and so on.

We believe that the current and future period is a window period for the rapid rise of Yunnan coffee industry, the real opportunity does not come from the planting area, but from the rapid growth and development of China's coffee fast consumer goods market. Yunnan coffee industry should seize the opportunity of supply-side structural reform and, through the combination of industry and finance and resource reorganization, take the stupidest, most difficult and traditional road of quality improvement, channel development, brand construction and standard formulation, so as to create the scarce value of "Yunnan coffee". In order to obtain the international and domestic market share of fast consumer goods, and to create profits as the goal, we will find a way to be reborn in adversity.

1. Change the way of thinking and reposition

First of all, we must liberate from the shackles of "small farmers' consciousness" and "economies of scale", deeply understand that commodity economy is the essence of surplus economy, and rethink the questions such as "what products should Yunnan coffee industry produce" and "who should be sold to". Follow-up, from the perspective of industrial development, is to gradually build a multi-level, multi-grade coffee product system, and each layer, each level of products to the extreme. At the same time, strategically and tactically, it is necessary to re-comb and understand the current fast consumer goods market and the consumer psychology of the people, and rethink and relocate the whole format of coffee products, coffee enterprises, coffee production, supply and marketing. At present and for a period of time in the future, profound changes are taking place in the capital structure, industrial structure and consumption structure of the whole world and China. Yunnan coffee industry should not be self-deceiving, nor should it belittle itself and believe in Europe and the United States. Everything is changing, and the general trend of this change is the basis of the possibility of the upgrading and development of Yunnan coffee industry. Repositioning, conforming to the trend, this is a premise.

two。 Be true to your heart, correct your path, and work steadily.

The market is there, not empty and indestructible, and every day is expanding capacity and demand, capacity and demand are still changing. Coffee industry practitioners in Yunnan, or Chinese coffee industry employees, should learn from the professionalism and value pursuit of coffee practitioners and entrepreneurs in Europe, the United States and Japan, and combine local resources and advantages. return to the commercial nature and the essence of coffee production, supply and marketing (that is, selling a drink), honestly and conscientiously serve consumers, employees and shareholders, not opportunistic and deceitful. Do not deceive the government (and the government should not deceive industrial employees), and start with little things. For example, we should do a good job in the construction of a high-quality production base at the planting end, implement the concept of green development, and produce safe and secure agricultural products; learn and introduce advanced technology in the processing link, learn thoroughly, and carry out production with the spirit of craftsmen; at the sales end, we should combine all mobilizable human resources, technical means and scene effects to do solid channels. Conscientiously refine and innovate the cognitive dimensions and levels of Yunnan coffee at the brand and cultural level, do a good job in consumer education, establish the scarcity of Chinese coffee and Yunnan coffee in the field of spiritual life and cognition, and return to the entity at the financial level. serve production, supply and marketing. All this is just one thing to do: produce good coffee, produce good coffee; sell good coffee, sell good coffee.

3. Organize

Although the editors hope that China's coffee industry can struggle to stand up on the basis of Yunnan coffee, it is not only led or led by Yunnan enterprises, but also depends on nature. Coffee enterprises or industrial capital that really grasp the general trend of this round of global capital and industrial structure adjustment need to have sufficient pattern and courage to strongly integrate China's domestic demand market and Yunnan's coffee planting industry. At present, the national coffee production (that is, Yunnan) accounts for only 1% of the global output, and the consumption accounts for only 2.25%. What is the concept? This is almost something that should be done by a company.

The integration of Yunnan coffee planting industry is the integration of China's coffee planting industry, relying on China's huge market, it will have the opportunity to play a game with international oligarchs and share the cake of the world's second commodity and its derivatives. Of course, as mentioned before, no matter how large the planting area is, there is no value, and the core is to be able to occupy the share of China's coffee market and to have stable and sustainable sales and profits. The purpose of integrating the planting industry is not planting, but control on the supply side, and the value of this control lies in that it can serve the demand side from the aspects of quality, cost, quantity and so on.

How do I open the demand side? How do you occupy it? Is it only the Chinese market that can be considered? How to co-ordinate the traditional market of raw coffee beans in Yunnan? Some of the second item has been mentioned above. The purpose of this article is not a business plan, this part is left to be carried out at the right time. However, as far as the way out of Yunnan coffee industry is concerned, based on Yunnan, there is an urgent need for industrial capital or leading enterprises to integrate small, scattered, weak and chaotic loose sand coffee planting bases and primary processing enterprises, so as to change the living state of this industrial colony and organize base resources, processing resources, scientific research resources and human resources to form a real industrial joint force. Only in this way can we make good use of industrial policy and even guide the formulation and implementation of industrial policy, and guide the entry of strategic investors and industrial capital.

On the other hand, the way out of Yunnan coffee industry does not lie in the government, but in the industrial capital with a sense of mission. There is a need for industrial capital to focus on factor integration and innovation-driven, with sufficient capital and operational capacity, the front end to concentrate on the sale of deep-processed coffee products (not just selling raw beans), and the back-end to take drastic measures to clean up the mountains and forests. conscientiously do a good job in the planting and processing of high-quality coffee beans. In this value chain, we can cut into the reconstruction of the middle-end warehousing and trading system, innovate supply chain management and support supply chain finance, and attach importance to the information construction of production, supply and marketing system and the application of big data industry. explore a new road of planned economy under the environment of market economy. In this sense, a possible way out of Yunnan coffee industry is the combination of industry and finance, restructuring mountains and rivers for later generations.