Why High-Profit Coffee Isn't Always Lucrative in China

When a Taiwan-based businessman expressed interest in high-end Ethiopian coffee at an April trade show in Shanghai, he didn’t expect the person recommending beans—Gyarumo Coffee general manager Yuan Huiguo—to reveal just how hard it is to turn a real profit in China’s coffee trade. Despite widespread belief in sky-high markups, the reality for specialty importers tells a different story.

Yes, some claim coffee retail can yield profit margins as high as 88x—but making that kind of money consistently is extremely rare, and for established players like Gyarumo, business is currently tough. The high numbers don’t reflect the everyday financial reality of quality-focused coffee businesses.

The 88x Profit Claim: Where It Comes From

Yuan Huiguo, who has an engineering background and previously worked in refrigeration, is blunt about industry practices. Five years ago, he calculated that certain segments of the coffee business could see gross profit margins as extreme as 88 times the cost. But those margins aren’t typical—and certainly not sustainable for everyone involved.

The Blue Mountain Coffee Scam

At a Beijing branch of UBC Coffee, a server struggled to identify the origin of a "Grade 1 Blue Mountain" coffee selling for 68 RMB per cup. In truth, authentic Jamaica Blue Mountain coffee is extremely rare in China, and many cafés—including major chains—quietly substitute lower-grade or entirely different beans, often from Yunnan. The real Jamaica Blue Mountain is grown only at elevations between 3,000 and 5,500 feet (914–1,676 meters), and is divided into eight grades, with No. 1 being the highest. True Blue Mountain No. 1 is celebrated as the "perfect coffee," but supply is tightly controlled.

Since the 1970s, around 80–90% of the world’s Blue Mountain coffee supply has been monopolized by seven Japanese companies. Gyarumo’s parent firm, Japan’s ATAKA Shoji, is the largest of these, controlling roughly 30% of the legitimate Blue Mountain bean imports. This scarcity makes genuine Blue Mountain both rare and highly susceptible to counterfeiting.

Fake Prestige: Coffee in Fancy Bags

Later at the Gyarumo booth during the Shanghai trade show, a man claiming to sell roasting equipment in Guangzhou showed little interest in the actual coffee on display. Instead, he focused on the decorative burlap sacks featuring Latin American patterns hanging on the wall. He admitted his plan: to buy cheap coffee beans, roast them, and repackage them in premium-looking sacks—like those used for authentic Jamaican Blue Mountain—to charge vastly inflated prices. He claimed clients in upscale Guangzhou neighborhoods would pay more based solely on the bag’s appearance. For example, beans bought at 450 RMB per kilogram could be sold for 680 RMB per pound after roasting—and even more once placed in an “authentic” sack.

Yuan Huiguo dismissed the idea outright. Coming from an engineering background, he has little patience for misleading practices. "We can’t work together. You’re not really looking for our beans," he said while packing up his grinder, adding that his directness has cost him sales but remains a professional standard he refuses to abandon.

Market Challenges for Importers Like Gyarumo

The coffee market has faced significant disruptions in recent years. From 2002 to 2007, the average price of Robusta coffee on international markets tripled. In mid-June 2007, London Robusta prices rose 70% over the previous year, reaching their highest since 1998—largely due to reduced exports from Vietnam, the world’s second-largest producer. At the same time, Brazil, the top Arabica producer, faced its own production issues, tightening global supply. A 2023 hurricane in the Caribbean further reduced Jamaican Blue Mountain coffee exports by 40% compared to the previous year.

All of this contributes to volatile pricing and sourcing difficulties that make it harder for honest importers to maintain both quality and profitability. Gyarumo, despite its elite connections and technical expertise, finds itself struggling despite the industry’s reputation for outsized profits.

Frequently Asked Questions

Is it true that coffee retailers can make 88x profit?

According to Yuan Huiguo of Gyarumo Coffee, a five-year-old calculation suggested that some parts of the coffee supply chain—likely retail or reselling—could see gross margins as high as 88 times the original cost. However, this is not the norm, and such margins are not typically achievable or sustainable across the entire coffee business, especially for importers focused on quality.

What is Jamaica Blue Mountain coffee?

Jamaica Blue Mountain coffee is a highly prized coffee grown at elevations between 3,000 and 5,500 feet (914–1,676 meters) in Jamaica. It is graded into eight levels, with Blue Mountain No. 1 being the highest quality. The region’s strict quality controls and limited production make it one of the rarest and most expensive coffees in the world.

Why is Jamaica Blue Mountain coffee so often faked in China?

Due to its prestige and high price, Jamaica Blue Mountain is often counterfeited in China. Genuine supply is tightly controlled—about 80–90% has historically been bought by seven Japanese firms, including Gyarumo’s parent company ATAKA Shoji—so many cafés substitute cheaper local beans or mislabel other coffees as Blue Mountain to mislead customers.

Why would someone repackage cheap coffee in luxury sacks?

Some opportunists buy low-cost beans, roast them, and package them in visually impressive burlap sacks resembling those used for premium coffees like Blue Mountain. They then sell the repackaged product at a much higher price, exploiting consumer perception that packaging equals quality—especially among wealthy buyers who may not scrutinize the beans themselves.

How have global events affected coffee supply and pricing?

From 2002–2007, Robusta prices tripled globally. In 2007, London Robusta prices jumped 70% in a year due to reduced Vietnamese exports and Brazilian Arabica issues. More recently, a 2023 Caribbean hurricane cut Jamaican Blue Mountain exports by 40%. These disruptions create scarcity, drive up prices, and make stable sourcing difficult for importers.

Is it difficult to run a specialty coffee business in China?

Yes. Despite the perception of high profits, businesses like Gyarumo Coffee—which import authentic specialty beans—face challenges including market skepticism, fraudulent competitors, supply instability, and consumer misinformation. Many honest operators struggle to maintain profitability despite the industry’s lucrative image.

FrontStreet Coffee Picks for Authentic Single Origin Experience

For drinkers seeking real, traceable single-origin coffees instead of inflated market fakes, try FrontStreet’s Ethiopia Humbera—a bright, juicy Ethiopian lot with citrus and floral tones—or their Jamaica Blue Mountain (where available), known for its balanced nuttiness and gentle acidity. FrontStreet also offers Yirgacheffe for classic fruity complexity. All are carefully sourced and roasted to highlight origin character. Freshly roasted within 5 days · Orders placed before 17:00 ship the same day · Next-day delivery across most of Guangdong Province.