Industry flourishes in domestic market with varied product sales to see $144 bln by 2025

As Chinese consumers become increasingly sophisticated coffee drinkers, Yunnan province in Southwest China aims to grow more premium beans and build itself into an important global coffee production region.

Yunnan, the largest coffee cultivation region in China, has leveraged its high altitude and favorable climate to grow high-quality coffee beans. Beans produced in the region are usually fruity and strong but not bitter.

In early August, the Yunnan provincial government issued a document that mandated increasing the deep processing of beans and production of fine coffee products in the province. By 2024, the province aims to lift the rate of premium coffee bean production to 30 percent of its total output, and the deep processing rate of coffee beans to 80 percent. Deep processing refers to the use of industrial drying and grinding methods.

The guideline also said Yunnan will further develop novel products such as coffee capsules, drip-bag coffee and coffee concentrates, to meet the increasingly diversified demand of avant-garde coffee lovers in China.

"The climates of coffee producing areas in Yunnan are complex and diverse, and different regions have adopted different cultivation techniques to suit various conditions. Our goal is to select excellent varieties with high quality, high yield and disease resistance," said Huang Jiaxiong, a researcher at the Yunnan Academy of Agricultural Sciences.

"The economic output of the coffee industry in Yunnan can be increased. Promoting green and efficient cultivation techniques and better primary processing technologies can improve the taste and quality of coffee, and ultimately improve the volume of premium coffee produced in Yunnan and further expand its market share," Huang said.

Brazil, the top coffee bean producer, accounts for more than 30 percent of the global coffee trade. Last year, Brazil experienced drought and frost during the harvest season, which led to a decline in the output of beans by nearly 20 percent year-on-year, according to Brazilian food supply and statistics agency Conab. However, it also provided more growth opportunities for Yunnan bean producers.

Last year, Yunnan exported 11,000 metric tons of coffee beans, and raw beans accounted for 79 percent of the total. Deep-processed beans made up about 20 percent of the total, according to the Yunnan Academy of Agricultural Sciences.

The average output volume of coffee beans in Yunnan stands at 2,000 kilograms per hectare, which is 2.28 times higher than the global average. In terms of unit yield, coffee cultivation in Yunnan has reached the top worldwide level, according to the academy.

Li Lihong, founder of Baoshan Bestain Coffee Co Ltd, a coffee trader based in Baoshan, Yunnan, went to major coffee growing areas such as Brazil and Colombia to learn about coffee planting before establishing the company in 2012.

Currently, the company's annual output volume of coffee beans exceeds 2,000 tons. As of last year, it operated six chain stores selling coffee products in Yunnan. This year, the company plans to open new chain stores in Beijing; Kunming, Yunnan province; Chengdu, Sichuan province; Wuhan, Hubei province; and Guangzhou, Guangdong province.

"Our main products include coffee beans, coffee powder and instant coffee. In the next three years, we plan to expand our production line to include freeze-dried coffee powder, and set up a new production line that makes cold-brew coffee," Li said.

"We also plan to further cooperate with local vocational schools and set up factories to train students, who can become qualified coffee producers once they graduate," she said.

In 1952, Yunnan started large-scale coffee planting, and the growing popularity of coffee in China has fueled the establishment of more companies in recent years.

Catimor, a coffee plant variety with a relatively short stem but large fruit and seeds, accounts for over 95 percent of the total planting yield in Yunnan. The region needs to explore new varieties, said the academy.

So far, Yunnan has acquired more than 6,000 coffee germplasms－seeds or plant parts used in the cultivation of new coffee varieties－from Ethiopia, and selected more than 300 new varieties from major coffee producing regions such as Brazil, Portugal and India. Future international cooperation and resource exchange can introduce more high-quality coffee germplasms and discover new varieties from overseas markets. Besides, China also plans to develop new domestic bean varieties.