Pu'er: Extracting riches from a tiny coffee bean
Long associated with tea production, city and surrounding area in Yunnan province brewing a different kind of success
In recent years, maximizing the value of a small coffee bean has become the common quest for coffee industry insiders in Pu'er, including Zhang. This has led to a push for the value-added processing of coffee beans, namely transforming green beans or roasted beans into higher-priced products such as instant coffee and freeze-dried coffee, with the establishment of coffee estates that combine coffee cultivation and tourism being another important avenue.
Pu'er has long been renowned for its tea both domestically and internationally, and the city is now gaining recognition among coffee enthusiasts, as its natural environment provides ideal conditions for coffee cultivation. With its fertile terraces at elevations ranging from 800 to 1,300 meters and acidic red soil, Pu'er offers perfect soil for Arabica coffee, which is known for its mellow taste, fruity notes and rich flavor without bitterness.
Yunnan dominates coffee production in China, accounting for around 98 percent of the country's coffee growing area and output. As of 2022, the province has developed two national-level leading coffee enterprises and 17 provincial-level enterprises, with one and six based in Pu'er, respectively.
The demand for coffee in China has been steadily rising, with coffee bean consumption reaching 288,000 metric tons in 2022, a 14.3 percent year-on-year increase and a jump of 50 percent from 2018, data from the United States Department of Agriculture shows.
To capture a share of this rapidly expanding market, coffee chain brands have engaged in price wars, offering low-priced coffee to attract customers. Luckin Coffee, in particular, has repeatedly introduced coffee products at 9.9 yuan ($1.40) per cup as part of its promotional strategies. Beijing-headquartered Cotti Coffee has also adopted a similar strategy, maintaining relatively low prices even in its stores in Hawaii and Hong Kong that are known for high levels of spending.
To meet the demand for high-quality, affordable coffee beans, companies have turned to Yunnan as a source. Major coffee brands such as Starbucks, Blue Bottle Coffee and Luckin Coffee have rolled out coffee beverages made from homegrown beans in Yunnan, including those sourced from Pu'er.
Although the increased demand for and recognition of Yunnan coffee beans have contributed to rising prices in recent years, they still remain lower than imported ones. While international beans were imported at an average price of over 27 yuan per kilogram from 2018 to 2022, both the market and export price of domestic beans still lingered between 10 and 25 yuan per kg, according to a research report from last year.
Pu'er is making strides in breaking free from the low-price predicament through value-added processing, as Zhang Xiong, deputy director of the Pu'er Tea and Coffee Industry Development Center, said "even the prices of basically roasted beans are two to four times higher than that of raw beans".
