Coffee and tea industries inject vitality into Yunnan Province
By Li Xiaoyang  ·  2022-09-05  ·   Source: NO.36 SEPTEMBER 8, 2022
Tea products of Yunnan Xiaguan Tuocha (Group) Co. Ltd., on August 6 (LI XIAOYANG)

When people begin their day with a cup of Starbucks coffee in cosmopolitan Chinese cities like Shanghai, many are not aware that the coffee they consume may have traveled thousands of miles from Yunnan Province, a major producer of high-quality coffee beans.

The beans supplied to Starbucks in China are largely grown by Aini Garden, a subsidiary of the Yunnan-based Aini Group. In Pu'er City of Yunnan, Liu Minghui, the founder of Aini Garden operates a coffee farm which covers about 400 hectares and focuses on providing beans for coffee makers in China. The company signed a cooperation agreement with Starbucks in 2012 and has since been a supplier to the coffee chain.

Unlike countries with a long history of coffee growing, such as Colombia, coffee from China had been virtually unknown overseas until recent years, Liu told Beijing Review.

As Liu recalled, farmers in Yunnan were once unaware of the value of coffee trees, and few planted them for profit. Yunnan coffee was considered a relatively mediocre variety as its quality fluctuated due to inexperienced producers, bad weather and insect damage, leading to low prices. In recent years, enterprises such as Aini have been working together with the local authorities to improve local farmers' coffee-growing skills and to promote Yunnan coffee around China and internationally.

Data from the Yunnan Academy of Agricultural Sciences shows that around 98 percent of domestic coffee is produced in Yunnan.

"The situation is different now. The quality of Yunnan coffee is improving and it is now sold around the world. Many international enterprises have reached out to buy Yunnan coffee," Liu said.

Fortune in fragrance

The history of coffee cultivation in Yunnan dates back to the 1950s, when scientists began their research on growing it in Baoshan, a mountainous area of Yunnan's southern Xishuangbanna region. Coffee grows in a semi-tropical climate, requiring an average temperature between 20 and 27 degrees Celsius and abundant rainfall. Many cities and prefectures in Yunnan, including Pu'er, Baoshan and Xishuangbanna are optimal regions for growing coffee.

In 1988, the Yunnan Provincial Government embarked on a United Nations Development Program project in collaboration with Swiss food giant Nestlé. Five young people in Yunnan were selected as local staff to help launch the project, one of whom was Liu, who at that time worked for the Yunnan Agricultural Reclamation Bureau, an agency set up by the Yunnan Provincial Government. "Since then, large-scale planting has taken place in Yunnan," he said.

After resigning from the reclamation bureau and establishing Aini, Liu decided to begin by improving the quality of Yunnan coffee and boost its production. In 2009, Aini Garden provided 1 million coffee seedlings to farmers for free to encourage the growing of coffee. The company also provides farmers with training and then purchases the beans they produce.

"After years of training provided by enterprises and government organizations, the coffee-growing skills of farmers in Yunnan have been improving, which has increased the quality of local coffee beans in recent years," Liu said.

To improve production efficiency, Aini established a factory for processing coffee beans in 2019, which has an annual output of 5,000 tons of processed beans. It also encourages and pays coffee farmers to catch insects manually, instead of using pesticide, so as to protect local environment. Pu'er, a region where the company grows coffee, is one of the most biologically diverse regions of China with over 60 percent of its land covered by rainforest.

There are now over 10,000 coffee-related enterprises like Aini in Yunnan, according to the provincial government. While Yunnan mainly produces Arabica coffee beans, the varieties produced have expanded over the past decade. In 2012, Starbucks cooperated with the Yunnan Provincial Government on breeding 33 new varieties of coffee beans. The company also established the Starbucks Yunnan Farmer Support Center in Pu'er that same year. With overseas coffee beans like Geisha, originally from Ethiopia, introduced to the region, the number of varieties now grown in Yunnan exceeds 100.

Meanwhile, as coffee becomes part of the modern Chinese lifestyle, demand for the beans is rising. A report released by online food delivery platform in August this year showed that China's coffee industry was worth 381.7 billion yuan ($56.5 billion) in 2021, up 27.2 percent year on year. The market will be worth more than 1 trillion yuan ($148.1 billion) by 2025.

"Modern young consumers have developed increasing trust in homegrown brands. That brings great opportunities for Yunnan coffee," Liu said.

Coffee beans produced in Yunnan have gained increasing attention around the nation. As of February this year, there were 569 coffee retailers in Shanghai selling Yunnan coffee beans, a jump of 848 percent year on year. Meanwhile, the orders for Yunnan coffee beans online surged 713 percent year on year, according to Meituan, another major Chinese food delivery platform.

According to Liu, improving the quality of Yunnan coffee beans has increased the price producers receive. However, there is still much room for improvement. "The coffee industry in China still rests on the lower end of the global industrial chain. Coffee producers should move up on the chain," he said.

Brewing boons

While coffee growing has been a relatively novel business in Yunnan, the province has a much longer tradition related to another popular beverage—tea. Yunnan used to be a hub on the ancient Tea Horse Road in southwest China, through which caravans transported brick tea, which are blocks of compressed tea, out of Yunnan to trade for horses in today's Tibet Autonomous Region during the 17th century. Tibetan people are traditional consumers of tea, however the cold climate on the Qinghai-Tibet Plateau makes it impossible for tea to grow, leading to the trade. To facilitate transportation, tea leaves are often boiled and compressed into circular bricks known as tuocha. Yunnan tea was also exported to European countries such as France and Germany.

Today, the tea industry is still a pillar of Yunnan's economy. According to the government of Pu'er, famous for its local tea with a sweet aroma, output of the city's tea industry was worth over 33 billion yuan ($4.88 billion) last year.

Tibet remains a major destination for Yunnan tea. Yunnan Xiaguan Tuocha (Group) Co. Ltd. is a tea company based in Xiaguan County in Dali Dai Autonomous Prefecture. According to He Xingwang, the company's deputy director of administration, half of its sales are to Tibetan tea consumers.

The company has purchased tea from local farmers through cooperatives, improving profits by enhancing product quality and brand reputation. "The prices of tea products sold through our company are at least 20 percent higher than when farmers sold tea by themselves. Over the past two years, we've paid tea growers nearly 200 million yuan ($29.6 million)," He told Beijing Review.

Yanzitou Village in Dali is a small village almost completely isolated from the outside world. Tea from the village is of high quality, but the prices used to be low. The company established cooperation with local farmers in 2019 to provide training and promote the local tea, which has doubled the farmers' incomes.

The company has also employed around 150 local people. After farm work, they would work in company's workshop, at monthly salaries of approximately 4,000 yuan ($592.4).

Companies are also looking to diversify the ways in which tea brings incomes to communities in Yunnan by incorporating elements of traditional culture, such as the use of tea as a pigment for producing artworks. "Besides selling tea, we have also been showcasing tea drawing as an intangible cultural heritage at international tea exhibitions. We do this to promote Chinese tea culture," He said. 

(Reporting from Yunnan Province)

(Print Edition Title: Beverages Bring Benefits)

Copyedited by G.P. Wilson

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