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The Varietal Characteristics of Yunnan Pu'er Small-Bean Coffee and Its Path to Industry Rise

June 18, 2014
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Pu'er, a city renamed after its famous tea, is now stepping into the public eye with a new identity: "China's Coffee Capital." The Tropic of Cancer passes through it, placing it on the same latitude as Cuba, the kingdom of coffee. Its exceptional climate makes it an ideal region for growing Arabica coffee. From Nestlé's arrival in 1988 to today, when international giants like Starbucks and Kraft are vying to buy its beans, Pu'er's coffee industry has come a long way in just over three decades. Through vivid details—the farming story of coffee grower Zhang Kui, technical support from international experts, and cup quality control—this article presents the varietal advantages, current state, and future opportunities of Pu'er Arabica coffee, while also introducing Front Street Coffee's continued attention to and recommendation of Yunnan coffee.

Zhang Kui, a coffee farmer from Donghuilin Community, Dakaihe, Nanping Town, Simao District, Pu'er City, is standing in front of his newly built house, turning coffee beans out to dry in the sun. The village has 19 coffee-farming households, every one of them steeped in the joy of a bumper harvest.

At the coffee purchasing station, as long as the beans meet the quality standards, they are repackaged in uniform bags and sent to the warehouse to await shipment.

Zhang Kui operates a machine in his own courtyard, pulping freshly picked coffee cherries. It is peak season for ripe coffee cherries, and farmers are rushing to harvest them.

▲Wu Te, a Belgian coffee expert who followed in his father's footsteps, has been based in Pu'er since 2005, teaching local farmers coffee-growing techniques. He is the fifth-generation foreign expert dispatched by Nestlé to Yunnan.

"Cup tasting" is the step Nestlé uses to evaluate coffee quality. During peak purchasing season, each staff member tastes more than two hundred cups of coffee a day.

Coffee expert Hou Jiazhi is guiding a Pu'er farmer to look up international coffee market prices online. They may well be the earliest new generation of farmers in China's remote mountainous areas to learn how to check New York market prices.

These days, Zhang Kui, a coffee farmer from Dakaihe, Nanping Town, Simao District, Pu'er City, Yunnan, wears flip-flops and a T-shirt as he busies himself around his house pulping and drying coffee cherries. Like many people in Pu'er, Zhang Kui never used to imagine what else this land could grow besides tea. Although Pu'er tea was once speculated up to astronomical prices, for local farmers who spend their days alongside the fields, Pu'er tea's "black gold" halo never did much to improve their lives. His father often consoled him by saying that with Pu'er tea, "the grandfather makes the tea and the grandson sells it"—but for Zhang Kui, with elderly parents above and young children below, that thought was nothing but worry.

Pu'er in Yunnan lies near the Tropic of Cancer, and its Pu'er tea is famous at home and abroad—so much so that the place originally called "Simao" was renamed "Pu'er." Fine as Pu'er tea is, most of the profits were pocketed by professional speculators, leaving only a wisp of tea aroma and a sense of helplessness for local tea farmers. Determined not to hang themselves on a single tree, local tea farmers have long been searching for new ways to increase their income.

Honest and down-to-earth, Zhang Kui admits he has no particular affection for coffee and won't let his children drink it, but as a professional farmer, he is fully confident he can grow it well. Pu'er is not only suited to tea—by latitude, it happens to sit on the same line as Cuba, the kingdom of coffee, with spring-like weather all year round. Add to that the local tradition of intensive cultivation, and it is equally suited to growing Arabica coffee with its mellow taste and rich aroma. It was precisely this insight that led Nestlé to set up here as early as 1988, charting a new planting direction for local farmers whose families had grown tea for more than two thousand years.

Under the guidance of agricultural technicians, Zhang Kui's coffee output reached 12 tons last year. The qualified beans he sold to the purchasing station rose from an initial 3 tons to 9 tons today, with gross income of US$33,500. In just a few years, Zhang Kui has built a new house, bought a new car, and even taken on a touch of the air of a farmer-entrepreneur. "Better than growing tea—income is about three times that of tea," Zhang Kui feels fully justified in his "rebellion."

Seeing more and more people growing coffee, local elders have begun to worry that Pu'er tea's standing will be undermined. In the eyes of the local government, however, developing tea and coffee side by side is exactly what will make the regional economy bigger and stronger. To that end, Pu'er City recently hosted the Pu'er qualifying round of the 2013 World Barista Championship China selection, and secured the title of "China's Coffee Capital." Although there is currently only one UBC Coffee shop in all of Pu'er's streets and alleys, that is precisely a sign of enormous business opportunity. "Europe has 700 million people drinking an average of 600 cups of coffee a year. China has 1.3 billion people, and right now the average is only 3 cups per person per year. If Chinese people drank 300 cups of coffee a year, then..." When explaining why Nestlé pays high prices for coffee beans locally, the company's head cited this set of figures.

At present, purchases by giants such as Nestlé, Starbucks, and Kraft account for about 30% of Pu'er's annual output. Some coffee merchants from Germany and Italy have also begun testing the waters in Pu'er, while cafés in the Jiangsu-Zhejiang-Shanghai region, valuing the quality of Yunnan coffee, have been making small-scale purchases since 2010. It seems that Zhang Kui, who is riding high on coffee growing, has a lot to look forward to.

Unlimited coffee business opportunities and building a complete coffee industry chain are now among the Pu'er municipal government's most important tasks. Last year, Pu'er's coffee planting area reached 650,000 mu, with 270,000 mu in production; coffee output was 36,500 tons, output value 900 million yuan, exports 24,700 tons, and foreign exchange earnings more than US$99.9 million. However, 36,500 tons is still less than 5% of global output. Since in today's global commercial value chain the manufacturing segment can hardly generate huge returns—value creation has shifted to the distribution segment—this means Pu'er City and these giants still have much more to do in the future.

The above content is compiled by CoffeeHunters, a coffee news website.

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