March 22, 2021

Exploring the Chinese coffee supply chain

In the 2005/06 crop year, Chinese coffee production totalled some 359,000 60kg bags, putting the country 30th in the world by volume at the time. Some 15 years on, despite precise production figures being difficult to come by, there has been a tremendous increase in the volume of coffee grown in China. It is now estimated that the country is one of the 15 largest coffee producers in the world.

Alongside this meteoric rise, we have also seen an increase in the quality of Chinese-grown coffee, as well as the emergence of sustainable farming practices in China. 

So, to learn more about the Chinese coffee supply chain and understand why production is improving, I spoke with Carl Sara and Mark Respinger from Sucafina (Yunnan) Co., Ltd, as well as Joy Chen from ManLao River Coffee. Read on to find out what they told me.

You may also like our article on the increasing quality of Chinese-grown coffee.

Coffee production in China: An overview

Carl Sara is the managing director of the Chinese and New Zealand branches of Sucafina, a leading sustainable farm-to-roaster coffee company. He gives me a brief history of coffee production in China.

“It was really in the early 1990s when coffee production increased,” Carl explains. Although coffee was first brought to China in the 19th century, it wasn’t cultivated at scale until 1988.

“Major companies came into China, who helped to grow and develop the industry in a way that hasn’t been replicated in other countries.” 

As a part of this growth, multinational roasters soon arrived in China. They had the ability to support large-scale infrastructure projects and mass planting initiatives.

“These companies were able to work with producers to select varieties that would grow successfully in China,” Carl adds. 

Today, coffee production is concentrated primarily in one region of the country. “Coffee is grown in Yunnan province, where 98% of all Chinese coffee is produced,” Carl explains. “Yunnan borders Myanmar, Laos, Thailand and Vietnam. It is hugely culturally diverse. 

“It’s also hugely diverse when it comes to terrain, too,” he adds. “As such, selecting the right variety was challenging.”

Mark Respinger is the chairman of Sucafina (Yunnan) Co., Ltd. Sucafina opened its first Chinese office in November 2020 to support its work with coffee growers in Yunnan.

“Catimor has typically been processed as a washed coffee at local wet mills around the coffee growing areas,” Mark tells me. 

Catimor is the most common arabica variety in Yunnan. It is a hybrid of the Caturra and Timor varieties that is naturally resistant to both pests and coffee leaf rust. Catimor plants fruit quickly and deliver high yields but require a lot of maintenance to reliably deliver good quality beans.

“It’s more difficult to get 87 to 88 point coffees out of a Catimor, because that’s just not what it provides,” Carl adds. “However, between 83 to 84 points, you get a strong, replicable flavour profile.”

Chinese growing regions

The main coffee-growing regions in Yunnan are Baoshan, Pu’er, Dehong, Lincang, and Menglian.

“Pu’er is at about 900 to 1100 m.a.s.l.,” Carl tells me. “Coffee grows up from there, at 1,100 to 1,400 m.a.s.l.; as you get closer to the border, you reach 1,400 to 1,600 m.a.s.l. and higher.”

Yunnan’s nutrient-rich soils and unique environment are two of the main reasons that 98% of all Chinese coffee is grown in the province. 

“The climate is mild and temperate up at those altitudes, and as you move to Kunming, you can reach almost 2,000 m.a.s.l,” Carl adds. 

He also notes that Sucafina’s attention to quality control and lot management helps Yunnan coffee score higher. Traditionally, coffee in Yunnan has been regarded as low-quality, but with enough attention to detail in production, Carl says farmers can deliver good, high-scoring specialty coffees.

“We have Plus which is a solid 82 to 83-point cup, and Simao Grade 1, which is 79 to 81 points,” he says. “We do a lot of QC and profile management right through the production process to ensure consistent cups and quality.

“We also have a core range of 83 to 84 point replicable but value-driven coffees. One of these is Kong Que, which translates as ‘peacock’ in English.”

Challenging misconceptions about Chinese coffee

Due to an historic lack of appropriate management and quality control, Yunnan unfortunately has a reputation for producing low quality coffees. It has often been used to create cheap soluble coffee, partially because Chinese companies in the soluble coffee sector would buy in volume from Yunnan without focusing on quality.

Carl says that general global misconceptions about China are fuelling these perceptions of Yunnan coffee. “Your mind thinks of industrialised cities and has preconceptions like this of China, whereas Yunnan is a beautiful green, lush, healthy place,” he says.

“The producers focus on organics. They have a rapidly increasing awareness of and engagement with environmental issues.

“Most farmers that we encounter, whether they have a couple of hectares or are medium and larger-sized producers, are all focused on quality improvement.”

Joy Chen is the Head Roaster and Manager at ManLao River Coffee in Kunming. He says: “It is important for people to understand that Yunnan is not the same coffee origin it was ten years ago.

“As a Yunnan-based specialty roaster, we have many personal relationships with Yunnan suppliers and currently buy over 50% of our coffee from them. The increasing quality of Yunnan coffee means we are shifting towards using it more frequently in our single origin coffees rather than blends.”

While around 30% of Yunnan coffee is consumed domestically, the remaining 70% is exported around the world. The largest importers are based in Europe, but there is also strong demand from other Asian countries. In addition, despite challenges with tariffs, demand among North American buyers is growing. 

Furthermore, in recent years, a growing domestic focus on Yunnan coffee has rewarded specialty producers with good prices. As a result, local roasters are also working more directly with producers, showing they value the direct relationships that are possible.

In Barcelona, one roaster who buys Yunnan coffee is Francisco Gonzales. He is the co-owner of Nomad Coffee. He tells me he recently purchased a washed organic Catimor from Yirong Farm through Sucafina.

“We were looking for a coffee with a nice body and acidity [alongside] good value for money,” Francisco says. “It was surprising that the best coffee on the table was from Yirong.” 

He says the flavours “reminded [him] of green apple, sugar cane and dates”, describing it as a “super sweet, citrusy, and balanced coffee”.

He adds that Nomad’s customers were hesitant about initially buying Chinese coffee, but notes that he’s been trying to dispel any misconceptions. “The more advanced customers are more reluctant when choosing a coffee from China, but we try to convince them. They have always been happy when tasting the coffee at home.”

How are Yunnan coffee farmers improving quality?

It’s clear that quality has become an increasing area of focus for Yunnan coffee producers. But what steps in particular are they taking to improve coffee quality?

Mark notes that one area in particular is processing. Washed processing remains the method of choice in Yunnan, but he says there is innovation among producers. ”Most recently, we have seen processors use yeasts and anaerobic fermentation methods that have the capacity to change the coffee experience,” he explains. 

Experimental processing methods can lead to new flavour profiles and improve market differentiation for these producers. However, this move away from washed processing is also important for environmental reasons; water availability was highlighted in the Yunnan Development and Reform Commission Development Plan 2010 – 2020 as a possible future issue for the region’s coffee sector.

Despite the fact that experimental processing methods are more sought-after in coffee consuming markets with established specialty coffee cultures, Mark says that Yunnan farmers can also become more popular in the domestic market by experimenting with processing.

“The ability to choose single origin Yunnan coffees at many cafés around China has driven a lot of interest in experimental coffees,” Mark tells me. “A natural processed coffee from Yunnan will demand a 20 to 30% premium domestically, almost regardless of quality.”

In addition, he says that some producers are moving away from the ever-popular Catimor in favour of varieties that are typically recognised as being higher-quality. “Some Yunnan farmers have already begun producing Geisha, Typica, Bourbon, and Caturra,” he says. “These achieve a higher price in the market but are less resistant to pests and diseases.”

The future for Yunnan producers

Carl thinks that the amazing ability China has to grow, adapt, and scale means that there is a lot of potential for Yunnan coffee. “You look at what the country has achieved in the last 30 years in terms of development and you see they are receptive to change.”

And despite preconceptions, Joy notes that sustainability is another important factor that is pushing Chinese coffee production forward. “Costs in China have risen with the nation’s economic growth,” he tells me. “So producers who have focused on sustainable farming methods and quality tend to do better than those that have focused on producing at the lowest marginal cost.”

In line with this, local governments in Yunnan have been helping farmers improve their sustainability efforts. For instance, in 2012, producers in Pu’er and Xishuangbanna were supplied with free shade-tree seedlings.

“We’re also seeing things like solar-powered dryers, irrigation management, different clustering of varieties, and controlled and scientifically verified experimentation with coffees,” Carl adds. This innovation is nothing if not indicative of a widespread move towards greater quality.

“Improving traceability, increasing automation, and a ‘reimagining’ of coffee finance are all areas where there are large potential gains to be realised through introducing some of Sucafina’s leading systems and technologies,” Mark adds. “One of our early goals in Yunnan is to implement the Farmer Connect blockchain coffee tracing system. The first step in improving a coffee supply chain is improving access to good information to support decision making.

“With Farmer Connect, we will not only be providing traceability to roasters, we will also be giving critical production data to farmers and processors to help them improve quality, consistency, and sustainability.”

But altogether, for producers, this increasing focus on growing specialty-grade coffee in a sustainable way means improved market access. As China starts to become more recognised and sought-after as an origin, demand will increase.

“We’re running blind cuppings with Yunnan coffee and people think it’s from Panama, Peru, Brazil, or Rwanda,” Carl says. “There are so many flavours and profiles coming out… every single person has been surprised by the quality.”

Francisco also notes that, based on what he’s seen so far, improvements in quality are on the horizon. “I am sure that in a few years we will be able to taste coffees from China scoring above 86 points,” he says.

And with events like the first annual Pu’er Specialty Coffee Expo taking place in 2018, it seems like China’s coffee growing legacy is just beginning.

“I want to see the work of Yunnan coffee producers represented on the global specialty stage,” Carl concludes. “They deserve that spot.”

It is becoming abundantly clear that the quality and sustainability of Yunnan coffee is increasing at pace. As Chinese coffee continues to grow in quality, the country will naturally attract more attention as a specialty origin. The potential that Yunnan coffee has to grow, given the speed at which it has developed in recent years, is staggering.

Carl concludes by saying: “These coffees from Yunnan, they’re a discovery that’s yet to happen for specialty coffee. But if our industry does one thing well, it’s searching for answers in places where we haven’t found them before.”

Enjoyed this? Then read our article on why China is a growing coffee origin.

Photo credits: Sucafina

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