Yunnan coffee wants to counterattack and fight for pricing power to get rid of the restriction of Nestle and other giants.

From 390,000 mu five years ago to 1.3 million mu in 2012, the rapidly expanding coffee planting industry in Yunnan suffered a cold market last year. First, at the beginning of last year, the international giant Nestle announced that it would stop the acquisition and triggered a panic selling of coffee farmers. At the end of last year, the purchase price of coffee beans fell to a five-year low, approaching the planting cost line. Yangcheng Evening News reporter for days in Yunnan investigation found that under many challenges, Yunnan coffee is brewing a reverse storm.

The purchase price fell close to the cost line, and farmers waited and saw

At present, Yunnan Province, where raw bean cultivation accounts for more than 98% of the domestic industry, is ushering in coffee harvest season. But the farmers couldn't be happy.

Pu 'er City Dalin Wo coffee cooperative responsible person told Yangcheng Evening News reporter, The club at present planting area nearly 500 acres, The main buyers of products Nestle and Starbucks offer lower prices, Coffee farmers are still waiting to see. However, the prices of pesticides and fertilizers continue to rise, and the planting cost is close to 16 yuan/kg. If the prices continue to fall, farmers may choose other ways out. In Ximeng County, Pu 'er City, a village cadre told reporters that nearly 200 mu of land in the village was replanted into coffee five years ago due to the bullish coffee market in recent years. Last year was the second year when coffee trees began to bear fruit, and the enthusiasm of coffee farmers was frustrated.

Hu Lu, deputy secretary-general of Yunnan Province Coffee Industry Association, said that the current planting cost of leased land is about 15-16 yuan/kg. If the price falls below this price, Yunnan coffee industry will be severely hit.

Yunnan Coffee Wants to Fight for Pricing Power

The reporter's investigation found that Nestle's current pricing is based on the latest New York coffee futures price and lowered by a few cents. The scattered coffee farmers have no say.

"The price is based on the New York Coffee Exchange. It's just the price of ordinary coffee beans. It's very unfair to us." Peng Yuanguo, vice mayor of Pu 'er City, said in an exclusive interview with Yangcheng Evening News recently that Pu' er City is currently committed to building a local coffee brand and plans to support a number of large-scale enterprises with pricing power to form a whole industrial chain. And plans to formulate industrial technical regulations and standards, apply for origin protection, and strive to regain international pricing power.

Hougu Coffee, the largest local coffee enterprise, used to be Nestle's largest raw material supplier in China. In recent years, it began to set up its own door, taking the road of deep processing and industrial chain to build its own brand. Xiong Xiangjin, chairman of the board, said that if the purchase price of international buyers falls below the cost price, protective price collection and storage will be started to help farmers tide over difficulties.

Coffee giant changes strategy

Faced with the challenges of local partners, some "foreign teachers" have begun to change the original simple procurement strategy and strengthen cooperation with local enterprises. Starbucks told reporters that the company introduced four new coffee varieties three years ago for adaptability testing. After the five-year trial period, the four coffee varieties will be planted on a large scale. At that time, its first coffee planting base in the world will be settled in Yunnan, and its first coffee grower support center in Asia in Pu 'er has been put into operation recently.

In fact, Starbucks is already changing its strategy in the face of the rise of Yunnan's local enterprises. Its joint venture with Aini Group, Pu 'er's largest local coffee company, was officially put into operation in December last year. The joint venture's coffee primary processing plant has an annual production capacity of 20,000 tons of raw beans.