How about Yunnan Coffee Brands? the Historical Story of Coffee planting and Development in Yunnan

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Yunnan, namely "the south of colorful clouds" and "colorful Yunnan", is also said to be named because it is located in the south of Yunling.

For Yunnan, there are many business cards that can be represented, such as Pu'er tea, Yunyan, Lijiang, Dali and so on. In addition, few people may be familiar with Yunnan coffee.

Indeed, for Yunnan coffee, the situation is so awkward. After a hundred years of cultivation, Yunnan has not made its own brand. Although Yunnan planned to develop coffee into a pillar industry more than 10 years ago, its implementation is slow, while farmers have not yet recovered from the purchase price of 40 yuan per kilogram of coffee in 2011. has tasted the huge gap of less than 15 yuan per kilogram.

Fortunately, Yunnan coffee is attracting enough attention from all sides, with the change of government attitude, the ambition of local enterprises and the infiltration of foreign gold prospectors. A hundred years later, Yunnan coffee can no longer contain the restlessness of the stormy house.

Capital power

"although Yunnan coffee has accumulated for a hundred years, the real trend towards industrialization began 20 or 30 years ago." Li Gongqin, deputy secretary general of Yunnan Coffee Industry Association, told China Business Daily.

A local person in Pu'er who had been engaged in coffee cultivation for more than a decade and then turned to coffee bean trade even told the reporter that a more accurate time should have started when Nestl é entered Pu'er Simao, Yunnan Province in 1989.

In Yunnan, Nestl é, which has been resident for 25 years, has maintained a good reputation for quite a long time. In the process of the reporter's interview, no matter the enterprises, farmers, or people at the government level mentioned Nestl é, they all thought that Nestl é had made a great contribution to the development of Yunnan coffee industry.

"Nestl é has introduced varieties in Yunnan, promoted technology, introduced a price purchase mechanism, and increased production, all of which are obvious to all." Li Gongqin said.

However, Nestl é has maintained a lukewarm state in Yunnan, and the size of the team has been controlled in a very small range. Because the purpose of Nestl é stationed in Simao is very clear, is to purchase coffee beans, but limited by the land policy and industrial planning at that time, the number of local farmers growing coffee in Pu'er is limited, so the purchase quantity and scope are limited.

For a long time, Nestl é's purchase volume has been maintained at 3, 000 to 4, 000 tons. it was not until a few years before 2011 that Nestl é's acquisition reached about 9000 tons. from 2011 to 2012, it collected an extra 1000 tons at the request of the government, but now it is basically kept at 10, 000 tons.

In Pu'er, Nestle's acquisition is not only aimed directly at farmers, but also cooperated with some unknown local enterprises to maintain a low-key supply relationship and have been at peace for many years.

But the change happened in 2008.

In 2008, Hougu Coffee, a local company in Dehong, Yunnan Province, announced in high profile that it would stop supplying raw materials to Nestl é on the grounds that Hougu would gradually reduce its rough processing business and turn to deep processing to produce instant coffee.

In the eyes of many people engaged in the coffee industry in Yunnan, this is undoubtedly a signal for Hougu to announce that it wants to become a "Chinese Nestle".

In response to the high profile of Hougu at that time, Nestl é responded relatively calmly. Nestl é said that under the global procurement mechanism, the back valley accounted for only 1% of the supply, which did not have much impact on Nestl é.

But Hougu became famous through this war, and after becoming famous, Hougu began to become impatient. While announcing the suspension of supply, Hougu made public its instant coffee production plan and planned to launch A shares in 2010. Xiong Xiangjin, chairman of the company, said Hougu will become the first share of Chinese coffee.

Yunnan local coffee enterprises, which are similar to Hougu's fame, as well as Aiyi Group.

Starbucks has been saying that it wants to buy in Yunnan since 2006, but it wasn't until 2010 that Starbucks finally landed its procurement project in Yunnan. After the search for cooperation with Hougu was rejected, Starbucks chose another smaller local company in Pu'er, but still regarded as the local leader, and the two sides jointly set up Starbucks Aiyi Coffee Co., Ltd.

In his exchange with reporters, Liu Minghui, chairman of Aiyang, made no secret of saying that the cooperation with Starbucks had enhanced the brand value of Aihu and gave it a chance to learn, but Liu Minghui stressed that although he had the opportunity to engage in the coffee trade for many years, generally speaking, Aixing is still small and everything is in its infancy.

Although he was reluctant to mention the cooperation with Starbucks, the reporter was able to enter the Starbucks factory in Simao Mumai River Industrial Park with Liu Minghui's approval. Compared with Nestl é's five warehouses in Simao, Starbucks' factory in Simao can be described as small and monotonous. Visually, the overall milky white steel plate warehouse, coupled with the middle cement open space, is slightly larger than a basketball court.

It is worth noting that in the Starbucks plant, there are two signs. One is Starbucks Aichi Coffee (Yunnan) Co., Ltd., and the other is Aili Coffee. According to the factory director who manages the processing, the whole plant is divided into two parts in terms of use, of which 2/3 is used by Starbucks to purchase coffee, the acquired coffee beans are rough processed, and 1/3 of the space is leased to Aixing coffee. Before Starbucks had a joint venture with Aixing, the whole plant actually belonged to Aixing Coffee, and buying the factory was also one of the conditions for the original cooperation.

On the coffee display board, it shows that the cooperation between Starbucks and Aiyang is mainly in the cultivation of planting varieties. At present, more than 30 newly introduced varieties are being cultivated. Starbucks does not seem to have any sign of getting its hands on the most critical planting base. It only relies on Aixing's base for cooperative cultivation of coffee varieties, while Aiyi's coffee base belongs to Aiyi itself.

The factory director who manages the processing of Aihu told reporters that the coffee beans produced by Aiyi planting base will be rough processed by Starbucks, and Aiyi will pay Starbucks rough processing fees. after rough processing, Aiyi will roast the coffee beans by themselves. some of the roasted coffee beans are sold to Starbucks and some are reserved for their own use. Aiyang now has a coffee roaster imported from Germany to produce dozens of coffee beans and instant products.

In addition to the cooperation that can be seen, the number of Starbucks purchases in Yunnan has always been a mystery. After repeated questioning by reporters, the factory director in charge of processing at Aiyi said that he did not know the exact number, but that Starbucks purchases were not large at present. Starbucks bought about 200 tons in 2012, according to a number of other coffee industry buyers.

In addition to Nestl é and Starbucks, there are also a lot of non-industry capital into Yunnan gold-panning coffee. According to Hou Jiazhi, a Nestl é agronomist who is familiar with the development history of the coffee industry in Yunnan Province, when the futures price of coffee beans reached 40 yuan / kg in 2011, there was a lot of foreign capital interested in Yunnan coffee, including Kang Enbei, a pharmaceutical company.

In 2012, Kangnbei established Yunnan Kangenbei Coffee Company and signed a technical cooperation agreement with the Tropical and Subtropical Economic crop Research Institute of Yunnan Academy of Agricultural Sciences to build a 10,000 mu coffee demonstration garden with a contract period of 10 years. Conbe said that the coffee will focus on high-end coffee beans and deep processing products, as well as a variety of interesting coffee and functional coffee products.

A person in charge of a local enterprise engaged in coffee processing said that some private enterprises and self-employed bosses in Zhejiang also came here to test the water, usually starting from tens of thousands of mu, and some simply planting and selling coffee beans. "however, from the current point of view, those who enter the high point of the enterprise, this year must be a loss."

Local forces

In the territory of power gradually formed by Nestle and Starbucks, the figure of Yunnan coffee factory seems to have been forgotten. Compared with the former two, the mission and attribute of Yunnan coffee factory is more national. Within a certain range, it is also a little famous because of the background of the national team. But in fact, the Yunnan coffee factory is hardly mentioned in front of the two rising stars, although it also has several brands of instant coffee products.

In addition to these relatively large-scale "big brands" rooted in the two major coffee producing areas Dehong and Pu'er, starting to sell Yunnan coffee everywhere, there is another force that can not be ignored: micro enterprises.

If micro-enterprises trace the source of raw materials, most of them originated in Baoshan. In recent years, due to the lack of the drive of large enterprises like Pu'er and Dehong, Baoshan, which was the first to grow coffee, is still in a relatively scattered and chaotic state. Farmers' coffee bean planting technology is relatively backward, and the quality of coffee beans is correspondingly unstable, which directly increases the space for coffee bean price bargaining, which also provides soil for small enterprises to buy low-cost coffee beans and carry out lower-cost production.

As a person who has a complex for Yunnan coffee, Li Xiong, who is in the coffee business after graduating from college at the end of 2007, has been reluctant to disclose information about the company.

The main reason why Li Xiong is reluctant to mention it is that the current public opinion is not good for small enterprises like Li Xiong.

"many people think that the reputation of Yunnan coffee has been spoiled by people like us." Li Xiong said awkwardly.

Although people, including the government and large enterprises, constantly complain about the flooding of Yunnan coffee in Taobao by small and medium-sized enterprises, they have to admit to reporters that the success of these small enterprises in making profits has given large enterprises valuable experience. Even in overseas markets, buyers do not necessarily know the valley, but they know some small enterprises.

In fact, there are not a few coffee companies with annual revenue of more than 10 million yuan in Yunnan, with an average gross profit margin of more than 20%.

These coffee companies are generally equipped with a small-scale processing plant, mainly in the direction of three-in-one instant coffee, gift coffee, or branding for some small companies in Southeast Asia; in addition, most enterprises have their own Taobao stores three or four years ago. e-commerce has rich experience in operation, obviously surpassing Hougu, Aiyi, Yunnan Coffee Factory and so on.

"so far, we small and medium-sized enterprises are really the ones who sell Yunnan small-grain coffee on Taobao, accounting for 80% of the category of Yunnan coffee on Taobao." Li Xiong told reporters.

In Kunming, the reporter met Mr. Wei, general manager of Kunming Jippin Coffee Company, who has been in the coffee business for decades and currently has an annual revenue of 20 million yuan and a gross profit margin of about 30 percent.

Mr. Wei said that in addition to cooperating with some manufacturers, Jippin's main sales channel at first was Internet cafes, specializing in the production of three-in-one coffee for special Internet cafes, and then promoted on Taobao.

Boss Wei told reporters that the reason why large enterprises can't go out while small enterprises can get a place is that small enterprises are good at making channels with a low profile. "low-price tactics are only superficial, the key is that we know how to find consumers."

With the thinking of rooted channels and years of accumulation, micro-enterprises have finally become the fourth largest local force of Yunnan coffee after Hougu, Aichang and Yunnan coffee.

As a result, Baoshan, the birthplace of micro-enterprises, Dehong, which Hougu relies on, and Pu'er, which is backed by Aishi, Nestle and Starbucks, have established the tripartite situation of Yunnan coffee.

Change of attitude of the government

However, in a market dominated by consumer perception, Yunnan coffee has been more like a subtle and fragile existence for many years. He has long played the role of coffee giant raw material supplier, hidden behind Nestl é, Starbucks and Maxwell.

"the problem of coffee in Yunnan is accumulated for many years, and there are problems from top to bottom, from planting to production, which need to be solved." Li Gongqin told reporters.

The long-term stocking attitude at the government level is undoubtedly one of the very important reasons.

According to Li Gongqin's analysis, there are many reasons why he does not attach importance to it, one of which is the game among the major industries in Yunnan. Yunnan is rich in resources, and there are many characteristic industries such as tobacco, tea and traditional Chinese medicine. Compared with tobacco and tea, the overall volume of coffee industry is smaller and its contribution to GDP is not so obvious at first.

"1/3 of Yunnan's revenue comes from tobacco. The hot area is only 81100 square kilometers, and there are many crops that can be grown. How much can be really used to grow coffee? " Li Gongqin said.

According to the 2010-2012 tobacco plan of Yunnan Province, there are 103 tobacco-growing counties in the province, with a flue-cured tobacco planting area of 7 million mu. The tea planting area in Yunnan has also reached 5.8 million mu, with an output of 84000 tons. In comparison, according to the data provided by the Yunnan Coffee Industry Association, in 2012, the planting area of coffee beans in Yunnan Province was nearly 1.4 million mu, and the annual output of coffee beans was 82000 tons, of which exports were about 60, 000 tons, accounting for 98% of the country's total coffee exports.

Liu Minghui told reporters that in recent years, he has been calling for sufficient land area for coffee cultivation and support for relevant water conservancy facilities. "Coffee needs land from alpine planting to the final drying on flat land." Liu Minghui said.

In fact, in the face of corporate appeal and the reality of the development of the coffee industry, the attitude of the Yunnan provincial government is also undergoing subtle changes.

In 1998, the Yunnan Provincial Government issued the opinions of the people's Government of Yunnan Province on speeding up the Development of Coffee Industry (Yunzhengfa [1998] No.116). The document states that "after years of development, a certain industrial scale has been formed." the preliminary results show good economic, social and ecological benefits, and the enthusiasm of farmers and local governments in growing areas to develop coffee production is unprecedentedly high. Small grain coffee is expected to become an advantageous industry in our province, and some areas can be cultivated into a pillar industry.

The document is also seen as the starting point for the Yunnan provincial government to pay attention to the coffee industry, but the words "preliminary" and "expected" in the document still show the vagueness of the government's attitude.

Until 2010, the Yunnan provincial government changed its previous cautious attitude and issued the Yunnan Coffee Industry Development Plan (2010-2020) (hereinafter referred to as the "Plan"), planning in detail the production and competitiveness of the large and small producing areas of Yunnan Province.

The Plan puts forward the overall goal of "building our province into a raw material base for high-quality coffee beans in the world, the largest finishing production base and trade center in the country". According to the Plan, by 2015, the planting area of coffee in Yunnan Province will grow to 1 million mu, reaching an area of 800000 mu, with an annual output of 96000 tons of coffee beans. by 2020, the planting area of coffee beans in Yunnan Province will be stable at about 1.5 million mu, with an annual output of 200000 tons of coffee beans.

In fact, after the issuance of the Plan and the high purchase price of coffee futures to 40 yuan / kg in 2011, there has also been a competition in the coffee industry among various regions of Yunnan Province.

According to incomplete statistics, at present, the coffee planting area of Yunnan Province is close to 1.4 million mu, which is close to the 1.5 million mu planned in 2020.

Among them, according to the data in the coffee industry planning released by Yunnan Province in 2010, in 2009, the planting area of Pu'er City was 178000 mu, which is expected to grow to 300000 mu by 2015, while the current planting area of Pu'er has approached 650000 mu.

Followed by Dehong, the planting area of 107000 mu in 2009, originally planned to develop to 200000 mu in 2015, but as of 2013, Dehong's coffee planting area has reached 208000 mu.

However, Dehong's speed is not as fast as the rising star's Lincang, rising from obscurity to the current 270000 mu, pushing the original second Dehong to the third place.

As for the traditional planting base Baoshan City, the development is relatively conservative, from 128900 mu in 2009 to about 150000 mu at present.

In addition to the competition of planting area, various places are also supporting local advantageous enterprises in order to lead the future development of Yunnan coffee.

Pu'er focuses on supporting Aigu, Dehong supports the established enterprises after the valley, Lincang early because of the development of the valley, the current key enterprise is Lingfeng Coffee Company, Baoshan is still hovering.

According to the analysis of a number of local coffee professionals, among the above three, from the point of view of strength and fame, the checks and balances can be formed by Aiyi and the rear valley, although the current scale of 200 million yuan is not comparable to that of the rear valley, but the support of some places is obviously guaranteed.

Pu'er 's support for Ai'er is reflected in many aspects, such as supporting cooperation with Starbucks, giving bank loans, promoting Ai'er as a vanguard of Pu'er coffee, giving priority to coffee growers, and so on.

According to the director of Ai'er Coffee processing Plant, at present, Ai'er is already a key enterprise built by the Pu'er municipal government. in the recent coffee planting planning, the government granted the most advantageous location to Ai'er, and Aiyang's interior was also actively planning for expansion. on the afternoon of the reporter's visit to Pu'er, Deng Jiayou, deputy general manager of Aiyi, declined the reporter's interview because he "accompanied the government leaders to see the land." The director of the Aiyang coffee processing plant said that the main purpose of buying land is to build a new factory area and expand production.

As for the back valley, Dehong is already the stronghold of the back valley. In Dehong, from farmers to processing, it almost serves the back valley, which almost swallows the whole coffee beans of Dehong, and has its own planting base of more than 200,000 mu.

In 2011, under the leadership of the government, CDB also provided financial support to Hougu, with a total of 246 million yuan in financing support for Hougu over the past three years, and only 137 million yuan in 2011. These are at that time in the instant coffee product layout did not have a major breakthrough in the valley, in Yunnan to maintain the status of the local leader played a financial support role. A person from the Dehong Prefecture Bureau of Agriculture said in an interview with reporters that Hougu is the country's leading enterprise and Dehong's only leading coffee enterprise. the government has given land and financial support over the years, and the government has also done a lot of work to ensure the development of Hougu, such as subsidizing farmers.

Dispute over the route of development

In addition to supporting enterprises and increasing the planting area, various localities have also spared no effort in promoting the quality and publicity of the so-called producing areas. Looking through the reports of several local governments, there are words such as unique local growth conditions and the best quality of coffee. In addition, an interesting phenomenon is that every place once called itself the coffee capital of China, and the recent result is that Pu'er has lost its original title of Dehong by relying on its production. however, the word "coffee capital of China" can be seen in the recent promotional documents of Baoshan, Dehong and Pu'er.

If the title dispute is only a false name, then the product standards of various names around the country, and the origin certification applied for by "going their own way", will further clarify the pattern of coffee melee in Yunnan.

From the perspective of future development orientation, they have chosen two different paths for the local beloved and Hougu on the development route. Aichi focuses on bypassing Nestle's channels and taking the boutique image route, while Hougu mainly takes the popular route of instant coffee, entering supermarkets and other channels to face Nestle directly.

These two routes are also the focus of controversy in Yunnan coffee industry. Those who support the boutique route believe that the mass route already has Nestl é, and then compete with Nestl é. Although it has the support of the government and can also be thrown out with money in terms of technology, it is far from Nestle and other enterprises in terms of volume and management. Local enterprises almost throw eggs at stones. Supporters of the popular line believe that Yunnan does not have an industrial environment for the development of high-quality products.

No matter how controversial it is, judging from the plans of Aigu and Hougu, both are fully committed to going to the end.

In addition to research and development on varieties, the next big goal of Aiyi has been formed. "We are going to open 50 cafes in Yunnan next year." Liang Jingxiong, director of the cafe's opening planning, told reporters.

Liang Jingxiong also showed to reporters the design pattern, which is similar to Starbucks in design. The store area is expected to be about 120 square meters, divided into indoor and outdoor.

At present, Ai'er has conducted experiments in two stores in Pu'er, but the area is very small, about 10 square meters. One is at the airport in Simao and the other is in a shopping mall in Pu'er. Except that the product category can not be compared with Starbucks, it is similar to Starbucks in packaging and appearance.

In the face of a reporter's question about whether the speed was too fast, Liang Jingxiong admitted that it was indeed a bit risky. Within Aiyi, Liu Minghui also pointed out that this was a bold move, but as the saying goes, if you do not advance, you will fall back. the opportunity for the whole market is here, "either you don't do it, you have to do it thoroughly."

According to Liang Jingxiong, the whole project in Aiyi was launched in August this year, and the team was just formed in August.

Liang Jingxiong said that the coffee shop of Aiyi will take the route of autonomy and joining, and the proportion has not yet been determined. As a Starbucks partner in China, opening a cafe seems like a job grab, but Liang Jingxiong thinks they are different from Starbucks. "at present, the most direct consideration is pricing. Our price will be around 20 yuan, which is lower than their price range."

Compared with the coffee shop opened by Aiyi, Hougu does not seem to have any intention of getting away from the route of instant coffee. In fact, since the announcement of the suspension of Nestl é, Hougu has been looking for a breakthrough in instant coffee, but from the feedback from local people, it seems that it has not been successful.

Some people even think that the overall positioning error of Yunnan coffee at the beginning is related to the back valley. A person who is familiar with Hougu told reporters that before the fall in love, the reputation of Yunnan coffee was once higher than that of Hougu. "Yunnan Coffee had a chance in 2008. Hougu gained fame and smashed a lot of advertisements at the same time." if we had come out of differentiation at that time, it would not have been so. "

At present, in addition to the known continuous expansion of the production line, the only well-known cooperation in recent years is the cooperation with UCC of Japan. Hougu is currently engaged in labeling processing cooperation for one of its instant coffee for UCC.

According to local people familiar with the matter in Yunnan, Hougu's ambition to distribute goods across the country may come true for many years and has signed contracts with large supermarket chains such as Carrefour to enter the national supermarket shelves.

The industry still needs to break through.

Although a large number of enterprises have sprung up around Yunnan coffee, and the output has also reached a new high, when the reporter visited the major coffee places in Yunnan, most voices generally believed that despite the plan, the whole coffee industry was still weak.

One of them is that the relevant supporting measures are not yet in place.

In addition to the lack of relevant supporting facilities, some business owners also believe that Yunnan coffee has been stocked for too long, and the long-term stocking has led farmers to start planting regardless of whether they have a technical basis or not, and the quality of coffee beans is uneven. In the process of development, local enterprises lack the guidance and standardization of the industry, and slightly larger enterprises are busy grabbing internal friction orders, while micro and small enterprises rely on low-cost acquisition and imitation strategies to reduce quality in the gap between large-scale enterprises. Survive with the help of all kinds of channels.

These scattered forces, finally reflected at the level of Yunnan coffee industry, have become hard wounds of Yunnan coffee, that is, the unstable quality of Yunnan coffee leads to no room for bargaining, there is no overall strong image of Yunnan coffee, and Yunnan coffee spreads all kinds of low-end channels. become a spokesman for low prices and copycat.

"for Yunnan, even if all coffee is grown, it may not be able to rank according to seniority in the coffee producing areas of the world. The only way to have a say is to rely on quality. But now the quality has not been preserved. " Li Gongqin said.

In addition, there is no relevant coffee bean quality identification standard in Yunnan Province, so the standards are decided by the enterprises themselves.

In the identification of coffee beans, in addition to the most basic hard indicators such as water content and defective beans tested by machines, at present, enterprises mostly rely on their own baristas to carry out cup-and-taste coffee testing, which determines that the flexibility of cup testing is the greatest. Take Nestl é as an example, coffee beans made by ordinary farmers have to go through three tests, including moisture testing, defective beans and cup products, and must pass all three passes before Nestl é will purchase. If one of the procedures is unqualified, Nestl é will reject it. The farmer will then sell it to other buyers at a low price.

Every year during the harvest season, farmers will wander among several purchasing companies. "Starbucks can't go to Nestl é, Nestl é can't go to Starbucks, if not, the price basically starts to discount." A local person in charge of coffee bean procurement told reporters.

Li Gongqin believes that the lack of identification standards for products is the key to preventing Yunnan coffee from becoming unified in quality and even having a say in price. "customers who come to purchase see that you have no standards, they set standards at will, and then lower the price." Li Gongqin said.

Due to the hard injury led by quality, Yunnan coffee is unable and has no room to reverse the embarrassing position of raw material suppliers for a long time.

Geographic indication product certification is another big headache for many policy makers. At present, all localities are certifying their coffee origin, such as Simao Coffee Certification for Pu'er Coffee and Baoshan small Grain clock Certification for Baoshan Coffee. In the interview, many people told reporters that in the case that the overall image of Yunnan coffee has not been established, setting up their own signboards is equal to internal friction. "what the world needs to know is Yunnan coffee, not Simao coffee, Baoshan coffee and Dehong coffee." Liu Minghui, who has experience in promoting coffee overseas, said.

"not so many enterprises have come, and the industry will be healthy and strong." Li Gongqin believes that Yunnan coffee should strengthen its efforts in quality standards and brand building in the future, while calling on the provincial government to play a macro-coordination role to prevent the phenomenon of scuffle in various places from continuing.

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