Coffee Farming in the Home of Pu'er Tea

Since 1988, Yunnan’s coffee production has grown almost 24-fold, thanks in part to the efforts of Swiss food leviathan Nestle. From MSNBC:

“Before I started growing coffee, I couldn’t afford a house like the one I live in now,” said Wang Zhongxue, a robust 72-year-old who cuts a striking figure with his machete. “My house back then was made of mud and the living conditions were terrible. When it rained outside, it rained inside, too.”

Last year, Wang earned around $18,000 from his coffee plants. Chinese farmers on average earn about $900 a year ….

Nestle announces coffee prices every Monday and Thursday via text message to all the farmers’ cellphones.

“We also get 150 to 200 calls from other farmers checking on the price,” he said. “It’s up to the farmer to decide whether to sell. There is no contract. The farmers are free to choose.”

Wang, the elderly farmer, said his daughter and her friends track coffee prices on computers. “When the price goes up, we know it immediately,” he said.

Nestle’s interests in China are broad, expanding earlier this year with the purchase of a controlling stake in Yinlu Foods Group. From Associated Press:

The Vevey, Switzerland-based company said Monday it is taking a 60-percent stake in the well-known Chinese brand that already is a co-manufacturer for Nescafe instant coffee in China. Yinlu, whose ready-to-drink peanut milk and canned rice porridge are popular with Chinese consumers, had sales of around 750 million Swiss francs ($840 million) in 2010, Nestle said ….

Nestle reported sales of 2.8 billion francs ($3.13 billion) last year in China, where it already has 23 factories and 14,000 employees churning out coffee, bottled water, milk powder, confectionery and other products.

The company’s influence in China has not been limited to empowering and enriching colourful elderly farmers, however. In 2009, Greenpeace criticised the company for breaking pollution disclosure laws, while it has also drawn fire over melamine-tainted dairy products and baby food contaminated with heavy metals.

Starbucks is also moving into coffee cultivation in Yunnan, its first foray into “seed-to-cup” production. See earlier coverage of the chain’s invasion of China: Starbucks Celebrates China’s Morning Coffee Habit and Doughnut Wars Give Shanghai a Sugar Jolt.

See also an interview with Yunnan’s “Jedi Master” of coffee farming, via CDT:

“It’s a pity that we have to sell our coffee to other brands. The reason we’ve worked with companies like Nestle and Starbucks here is to learn their skills, management and brand building. One day, we’ll have our own famous brand; Americans will even know who we are.”

October 19, 2011 2:59 PM
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