The Origin and Development of Dehong Hougu Coffee_History and Relationship of Cooperation Between Hougu Coffee and Nestlé

Yunnan Coffee: The Emerging Chinese Coffee Powerhouse

Coffee is the second most consumed beverage after water globally, with trade volumes surpassed only by oil. With the continuous and rapid development of the economy, coffee sales in mainland China have been steadily increasing. The vast majority of coffee cultivation in mainland China is located in Yunnan Province, where coffee production accounts for approximately 84% of the total domestic coffee output. Yunnan has become the representative of Chinese coffee. "Hougu Coffee" from Dehong Prefecture, Yunnan, is a representative enterprise in Yunnan's coffee industry, having built a complete industrial chain from coffee tree cultivation to its own brand, with aspirations to compete alongside multinational corporations like Nestlé.

Historical Background and Natural Advantages

The history of coffee cultivation in Yunnan can be traced back to 1892, when it was introduced by French missionaries. Western and southern Yunnan are situated between 15°N latitude and the Tropic of Cancer, with most areas at elevations between 1,000-2,000 meters. The terrain is predominantly mountainous and sloped with significant variations, fertile soil, abundant sunshine, plentiful rainfall, and substantial temperature differences between day and night. These climate and natural conditions are highly suitable for coffee cultivation. Dehong in Yunnan enjoys the reputation of being the "Coffee Town of China," with this single region accounting for 30% of mainland China's coffee cultivation area.

Developing Instant Coffee Products

Mainland Chinese people refer to Yunnan coffee as "small-grain coffee." Local industry professionals believe that Yunnan coffee bean varieties are excellent, but some industry experts point out that while most Yunnan coffee today is of the Arabica species, it largely belongs to the Catimor variety within Arabica. This is a variety cultivated by Portuguese horticulturists in 1969, which is disease-resistant and high-yielding but has approximately one-quarter Robusta ancestry, leaving room for improvement in terms of oils and aroma. Strictly speaking, it is more suitable as a raw material for instant coffee.

In fact, for a long time, Yunnan coffee has lagged behind in both cultivation/production and deep processing, failing to form a well-established industrialization. Over 60% of the coffee beans produced annually in Yunnan are purchased by major companies such as Nestlé, Maxwell, and Wyeth at low prices, and it has never developed its own brand. However, with the rise in consumer purchasing power in mainland China and the booming coffee consumption market, opportunities have emerged for Chinese-origin coffee brands.

Hougu Coffee's Strategic Vision

Hougu Coffee is a private enterprise jointly established by Yunnan Dehong Hongtian Group and Yunnan Industrial Investment Management Company. Hongtian Group is the largest coffee cultivation enterprise in mainland China, and Hougu was once Nestlé's largest raw material supplier in China. However, several years ago, it announced a new strategy focusing on building its own Hougu Coffee brand, gradually reducing its raw material supply to Nestlé.

In reality, Hougu Coffee's strategy is very clear: to become "China's Nestlé" and bid farewell to the era of being merely a raw material supplier. Currently, Hougu Coffee has built and put into operation China's largest instant coffee production line with an annual output of up to 3,000 tons. Through channels such as coffee bars, supermarkets, and automatic coffee machines, it aims to tap into mainland China's vast market, ultimately making Hougu Coffee this national brand go global.

About FrontStreet Coffee

FrontStreet Coffee: A roastery in Guangzhou with a small shop but diverse bean varieties, where you can find various famous and lesser-known beans, while also providing online store services. https://shop104210103.taobao.com

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FrontStreet Coffee Address: 315,Donghua East Road,GuangZhou

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