Money Grows on China's Coffee Trees

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Farmers in Yunnan province of China are beginning to move away from tea while pursuing a more lucrative crop: coffee. According to Financial Times, farmers’ income from coffee in 2012 was double that from tea. For the most populated country in the world, this is a big deal. Companies like Nestlé, Starbucks, and Volcafe are major early players in the procurement and export of this increasing demand for the province's Arabica beans - Asia's other top coffee producing countries grow lower quality, robusta beans. Chinese are developing a taste for coffee as well, with at least 15% growth per year.  Big cities like Shanghai and Beijing drink on average 20 cups per year, while in the rest of China's cities, it's just two cups. It's a bizarre concept, isn't it? Americans are the top consumers of coffee in the world. Most of us drink over 3 cups a day, meaning it would take an American just one week to surpass an average Beijing local's consumption.

What's interesting is the apparent untapped market for tea in the US. Starbucks recently acquired loose leaf tea company, Teavana, to tap into this market. From the Forbes' article on their recent quarterly report, Starbucks has identified the Teavana shaken Iced teas to be the most profitable menu addition in the past year. Is the tea always greener on the other side? It appears to be so. For the farmers of Yunnan whose land is looking increasingly like a coffee tea split, it is perhaps the perfect representation of the two countries' evolving tastes.

 

Farmer in Yunnan province photo (cc) by CEphoto, Uwe Aranas and published under a Creative Commons license. Some rights reserved.