The Future Development trend of Yunnan Coffee in China Link between Starbucks and Yunnan Coffee

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At present, the coffee consumption market in China is growing rapidly. However, although the coffee consumption potential in China is increasing gradually, the current market is mainly dominated by international coffee brands such as Starbucks, Nestle and Costa, and there is competition from the latecomer Ruixing Coffee. It is worth noting that China is also one of the world's major coffee producers. It ranks 12th globally. Among them, Yunnan accounts for nearly 99% of China's coffee production, mainly supplying international brands such as Starbucks, Nestle, McGrady and Kraft, but the market share of Chinese local brands is less than 20%.

Yunnan has 34 coffee-producing counties, including 6 counties with an area of more than 100,000 mu, including Simao, Longyang and Zhenkang. Among them, Lujiangba Arabica coffee in Baoshan was recognized as "the crown of national coffee" at the National Coffee Conference in 1980. Lujiangba is located in the eastern foot of Gaoligong Mountain, with sufficient light and frost-free all year round. It is one of the few typical subtropical dry and hot valley climates in China. Lujiangba Arabica coffee particles are uniform and full, with fresh smell, rich aroma, strong but not strong and other characteristics.

The decrease in coffee production is mainly due to the low profit or loss of coffee farmers. Since 2015, coffee production in Yunnan Province has shown negative growth for three consecutive years, and the profit margin of coffee industry is sufficient, but it has nothing to do with coffee farmers. If the existing chain is not broken, Yunnan farmers cannot become rich by planting. Coffee farmers account for only 1% of profits in the entire industry chain. In addition, international coffee bean prices have fallen all the way in recent years, and sometimes the purchase price of coffee is even lower than the cost price. Yunnan coffee is mainly planted by small farmers, with low standardization degree, weak self-risk resistance and serious disconnection from the market. Before international acquisition, coffee farmers have no right to speak, and the price is lower than the price of international futures market all the year round.

Due to the limited interests of coffee farmers, the farmers in Conggang Village have no intention to control the production cycle, resulting in insufficient nutrients for coffee beans; in the later stage of picking, in order to save trouble, red and green fruits are picked up, so that a large part of them do not meet the standards of buyers_barely qualified to make instant coffee, the rest are all waste fruits.

Yunnan coffee production has decreased for three consecutive years, which is undoubtedly a blow to China's coffee industry. If China's coffee industry declines and consumption still climbs at a growth rate of 15%, coffee prices may become higher and higher in the future. However, under the market competition, only by improving the quality of coffee can we seize more market share. As freshly ground coffee is gradually cultivated and formed by consumers, the market of freshly ground coffee will show an upward trend in the future.

If a stable high-end coffee bean supply chain is formed, the competitiveness of domestic brands will also rise. "In the past, we can only harvest what beans there are. In the future, we can plant what beans are needed by the market. The competitiveness of Yunnan coffee in the market will be greatly improved."

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