Nestl é invests 100 million in Yunnan Pu'er to build Coffee Bean Center

Food giant Nestl é made another big move in its coffee bean business in China shortly after Xuanyu adjusted its frost business.

A few days ago, Nestle announced that it will invest in the coffee bean industry in Pu'er City, Yunnan Province, provide training and infrastructure for local farmers through the "Nestle Coffee Center" project, and enhance the brand influence of Pu'er coffee. Earlier, Nestl é said it would start selecting 100% Pu'er small grains to grow coffee beans in 2013, and promote a new coffee product named after Pu'er as the origin of coffee beans.

Su Bo, president of Nestl é Greater China Food and Beverage Division, revealed that the coffee center is expected to invest 100 million yuan. Su Bo also said that Nestl é's coffee bean purchases in Yunnan have increased by 300% in the past three years, which further makes Yunnan a larger and more important part of Nestl é's global coffee supply. At present, the coffee buying season is gradually coming to an end. In the past two years, Nestl é has purchased a total of about 22000 tons of coffee beans in Yunnan. Nestl é will continue to expand its storage capacity in Yunnan, with plans to build new storage facilities with a capacity of 15000 tons, an increase of 50 per cent over existing facilities.

According to the data, the total output of coffee beans in Yunnan Province in 2012 was about 70,000 tons, of which 15% to 20% was supplied to Nestle, making Nestl é the largest buyer of coffee beans in the region. In 2012, Nestl é bought 265 million yuan worth of Pu'er coffee beans, equivalent to 20% of the local total output.

A reporter from the Daily Business News learned that the "Nestl é Coffee Center" to be established with Pu'er City, Yunnan Province, is mainly composed of three parts: coffee planting training center, consumer experience center, and modern integrated storage and testing facilities for coffee beans.

In fact, the Nestle Coffee Center project is part of the long-term strategy of the Nestle Coffee Project. The Nestle Coffee Project, launched in 2010, plans to invest 2.6 billion yuan to launch coffee projects around the world by 2020.

In the view of Xiang Jianjun, a consultant at CIC, Nestle's boost is conducive to the entry of Pu'er small-grain coffee into the global market, and in particular, it may deal a blow to the European coffee market, which imports a large number of raw coffee beans. The cost of coffee in Yunnan is lower than that of coffee beans from other places of the same quality, and the establishment of a "Nestl é Coffee Center" has undoubtedly rapidly expanded the market demand for Yunnan coffee beans.

It is worth noting that before Xuan established a "Nestle Coffee Center" in Pu'er, Nestle said in January 2013 that it had officially launched the research and development of new "Pu'er" coffee products.

In this regard, he Wenlong, senior vice president of Nestl é Greater China Coffee and Beverage Business Department, said that at present, all the small seed coffee needed for Nestl é's coffee products in China are purchased from Yunnan. As long as consumers' tastes become more mature, the use of Yunnan small-grain coffee beans will increase in the long run.