Starbucks took a huge step toward establishing China’s Yunnan Province as a major source of coffee beans on Wednesday with the founding of its first Asia-based Farmer Support Center in Pu’er. The center, which will offer local farmers direct support as they seek to grow high quality coffee beans, is the most prominent indication to date of the rising importance of the province in Starbucks’ evolving China strategy.
Starbucks is no stranger to Yunnan. The connection between the Seattle-based coffee giant and the southwest Chinese province stretches back to 2009, when a collaborative program between company executives and local officials introduced four coffee bean varietals to the region. A year later, Starbucks opened its first café in the province. And earlier this year, the company entered into a joint venture agreement with a Pu’er based coffee producer, the Yunnan Aini Agricultural Livestock Group. All of these developments, however, were relatively modest in scale, especially when compared to likely sizable effect of the new Farmer Support Center.
According Starbucks’ website, Farmer Support Centers are designed “to provide local farmers with the resources and expertise that help lower the cost of production, reduce fungus infections, improve coffee quality and increase the yield of premium coffees.” Since opening the first such center in Costa Rica eight years ago, the Starbucks has added locations in Tanzania and Rwanda. The company’s China President Belinda Wong expressed great hope for the new Pu’er center, noting that “Our vision is to leverage our global coffee leadership, sharing our coffee knowledge and expertise to elevate the Yunnan coffee industry and help local farmers develop localized, high quality coffee.”
The scale of coffee production in Yunnan, which dates back to the introduction of the bean to the region by French missionaries in the 19th Century, is relatively small and little of it is exported. This stands to change, however, driven largely by Starbucks’ interest in the region. Last year, the Yunnan Provincial government released an ambitious plan designating coffee cultivation as a strategic sector for development and promising to increase output from the present 60,000 tons of beans annually to 200,000 tons of beans a year by 2020. As part of this expansion, Starbucks plans to begin large-scale planting of several varietals in 2014.
At the opening ceremony for the new center, Starbucks China and Asia-Pacific President John Culver stated that “We believe Yunnan will play an important strategic role in our long-term supply of premium arabica coffee.” With plans to increase the total number of Starbucks coffeehouses in China to 1,500 by 2015, demand for these domestically produced beans stands to be high.
Published December 14th, 2012