American media: Nestl é promotes a business model in Yunnan to encourage farmers to grow coffee

Forbes magazine reported on May 14 that at the turn of the century, coffee trees were planted instead of tea trees in the hilly areas of southern Yunnan due to the entry of Nestl é. This has also succeeded in creating huge new wealth for the local area and changing the way of life of local farmers.

It is reported that in 1997, when Nestl é chose the source of coffee beans for its Dongguan factory, it was attracted by Yunnan's fertile volcanic soil and built a 20-hectare experimental plot in Xishuangbanna. In 2002, Nestl é opened a service station in Yunnan to provide free training in planting and soil analysis for local ethnic minorities and sell seeds to them at low prices. Various measures make local residents feel that growing coffee is a worthwhile thing to do.

Today, more than 2000 farmers in Yunnan have participated in the Nestl é project. These farmers grow coffee beans and then sell them to coffee merchants, including Nestl é, to make a profit. Last quarter, Nestl é produced 11500 tons of coffee beans in Yunnan, equivalent to 20 per cent of Yunnan's total crop output in that quarter. The Nestl é project also provided jobs for 25000 local residents.

Interestingly, Nestl é has been buying coffee beans from local farmers according to the New York coffee exchange rate. But since local farmers learned to look up the trend of New York coffee exchange rates online, they began to hoard goods and wait until the best time to sell them. Nestl é has also had to change its buying strategy. "after years of development, our manufacturers have become real businessmen," said De Smit, Nestl é's service station manager in Yunnan.