Yunnan Coffee Knowledge: Yunnan Also Has Specialty Coffee Beans, Not as Bad as You Think

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FrontStreet Coffee · Yunnan Coffee Science: Yunnan Also Has Specialty Coffee Beans That Are Not as Bad as You Think

Not only are specialty coffee shops constantly emerging in cities, but the coffee industry in Pu'er, Yunnan is also transitioning from the instant coffee era to the third wave of coffee. Starbucks, young coffee enthusiasts, and specialty coffee brands have all come to this small Yunnan town with the determination to make a big impact.

The New Coffee Pioneers in Yunnan

Menglian County, on the China-Myanmar border in Pu'er City, Yunnan. Shen Xuejing felt a bit frustrated because the owner of the mountain where she was currently located told her that the batch of coffee beans she had come to taste - traveling 5 hours by car from 230 kilometers away in Pu'er city - was already gone. Shen Xuejing is a barista from Shanghai who was studying green coffee processing courses in Pu'er last December.

Before reaching the mountaintop, she specifically took out her iPhone to check the altitude here - one of the key factors determining coffee growth - and observed the surrounding geographical environment. "This batch of beans should reach around 85 points in the SCAA (Specialty Coffee Association of America) system," Shen Xuejing said. Typically, scoring above 80 points in this system qualifies as specialty coffee.

With no other option, Shen Xuejing could only leave disappointed. On the way back, she met Ted Lingle, founder of the World Specialty Coffee Association. People traveling with him told Shen Xuejing that they had also come for those beans. Behind them were people from the CCTV documentary team, who had just finished filming this coffee-producing region.

Starbucks Enters the Yunnan Market

Over 2,000 kilometers away on West Nanjing Road in Shanghai. Inside the newly opened Starbucks Reserve Shanghai Roastery, two enormous coffee roasters were operating smoothly, processing the final batch of those curious coffee beans.

This was a single-origin coffee bean from Pu'er, Yunnan, processed using a special method - yellow honey processing, which is more complex than conventional natural and washed processing methods. It was also the first time Starbucks included Yunnan coffee beans in its high-end Starbucks Reserve product line.

While this certainly carried marketing implications - the importance of the Chinese market to Starbucks is undeniable - in the specialty coffee field, Yunnan coffee beans are typically chosen for blending with other coffee beans. This time, a large company like Starbucks launching a single-origin Yunnan coffee bean under its high-end product line seemed to prove something to the entire industry: Yunnan coffee had changed significantly.

Pu'er Has Coffee, So Starbucks Came

Li Xinhua, 45, also hopes to produce such specialty coffee beans.

Although he has only visited Starbucks once and doesn't know much about how the "third wave of coffee" is spreading on a large scale. Driven by this wave, specialty coffee characterized by single-origin, unique flavors, and manual brewing methods is gaining popularity worldwide.

He doesn't seem to care much about these trends, only knowing that specialty coffee can sell for higher prices. Li Xinhua has a 300-mu (50-acre) estate in Pu'er growing coffee beans, 90% of which are purchased by Starbucks.

In fact, besides tea, Pu'er in Yunnan also produces coffee. In 2007, Simao City was renamed Pu'er City because the Pu'er tea produced here was once renowned in the market. However, this couldn't stop local farmers' enthusiasm for tea cultivation from waning - in the same year of the renaming, the once-overheated Pu'er tea returned to rational prices, causing heavy losses for many tea farmers. So they began to cut down tea trees on a large scale and plant coffee instead.

Based on market reactions, the Yunnan local government also made plans to turn local tea cultivation into a stable market, ensuring it remained around 6 million mu by 2017 without further expansion. Consequently, coffee cultivation area began to expand multiple times.

In fact, there are no native coffee varieties in China's plant taxonomy. In 1893, British missionary Alfred B. C. S. introduced coffee to Yunnan. Since then, Yunnan has developed a tradition of coffee cultivation.

Today, Yunnan produces nearly 100,000 to 140,000 tons of coffee annually, accounting for 99% of China's coffee production. Pu'er contributes 60% of this coffee production. Coffee cultivation requires specific climate conditions, typically referring to the region between 25 degrees north and south latitude as the "coffee belt" - where soil, climate, rainfall, altitude, and sunlight are suitable for coffee growth - and Pu'er, Yunnan is within this zone.

Evolution of Coffee Cultivation

Li Xinhua's coffee cultivation techniques were pieced together.

When he started growing coffee in 2007, the market had basically no requirements for coffee quality. Pu'er had long focused on growing coffee beans for mass commodity markets. These beans would be exported abroad for instant coffee production. In 1989, Nestlé entered Pu'er and brought the Catimor coffee variety.

This coffee variety suited Nestlé's needs - stable and consistently high yields. This coffee purchaser needed large quantities of coffee beans here to produce instant coffee. This variety is also highly disease-resistant; when a plant disease called leaf rust devastated other coffee varieties, Catimor remained unharmed.

During harvest season, farmers' processing methods were exceptionally simple and direct. All fruits were harvested regardless of ripeness to increase yield. Meanwhile, they were directly spread on the ground for sun-drying, without specialized drying equipment, and there was no need to record data such as coffee bean temperature and humidity.

Such coffee beans were purchased at prices set by Nestlé based on international futures. For instant coffee production, this method posed no fatal problems.

Although Nestlé contributed significantly to Yunnan coffee development over nearly 30 years, providing local farmers with stable income sources, this extensive production method that disregarded quality persisted for a considerable time.

It wasn't until 2014, when Li Xinhua wanted to sell coffee beans to Starbucks, that he discovered this approach no longer worked.

In 2012, this Seattle-based coffee brand entered Yunnan. It established a coffee grower support center here and jointly formed Starbucks Aini Coffee (Yunnan) Co., Ltd. with local enterprises for coffee procurement and primary processing.

All farmers wanting to sell coffee beans to Starbucks needed to pass Starbucks' "Coffee and Farmer Equity (C.A.F.E. Practices)" certification. This certification is evaluated by third-party organizations and includes aspects such as quality, social responsibility, and environmental protection.

Building Quality Standards

But in 2012, no one in Pu'er knew about Starbucks.

Tong Yalun, director of Starbucks' grower support center, recalls that when he organized the first training session in Yunnan that year, only 25 people attended. He and agronomists visited estates, but when they arrived at appointed times, estate owners would politely refuse. Starbucks launched a "quality for premium price" strategy in Yunnan - purchased coffee beans that passed Starbucks' testing could be accepted; if they exceeded常规标准, such as larger bean size, additional rewards could be obtained.

"My goal is simple: I want to receive good beans; and the farmers' goal is also simple: they want more economic income," he said.

After hearing about this strategy, Li Xinhua voluntarily added a wastewater treatment pool to his estate. Starbucks sent agronomists to his estate for training. They taught him that fertilizing before rain and before flowering allows effective fermentation of fertilizers while helping coffee fruits absorb more nutrients to grow fuller; or adding quicklime to wastewater treatment pools, because wastewater from coffee washing is highly acidic and could damage the environment.

Starbucks' agronomists also recommended that local farmers harvest only fully ripe red cherries and plant shade trees next to coffee trees - to prevent coffee plants from dying from sun exposure before maturity, and once matured, they can create a better microclimate around them to help fruits absorb nutrients.

When coffee farmers pass certification, it doesn't guarantee their coffee beans will be purchased by Starbucks. Every morning, numerous trucks filled with coffee beans queue up to enter Starbucks' local factory.

Agronomists use sampling tools resembling sharp steel pipes to take samples from bag after bag of coffee beans. Then they send them to the factory's testing department for inspection based on standards such as defect rate, bean size, and flavor. During coffee harvest season, each cupper tastes an average of 200 cups of coffee daily; during peak periods, the number of coffees to be tasted daily reaches as high as 300 cups.

Currently, 1,678 coffee farms in Yunnan have passed this certification, with a total cultivation area exceeding 16,000 hectares.

In 2014, Li Xinhua also passed Starbucks' certification and sold these coffee beans to Starbucks at 2 yuan per kilogram higher than the purchase price at that time. However, there were also worst-case scenarios: if a batch of coffee beans wasn't approved by Starbucks, their fate would be to sell to other factories at 1-2 yuan below market price - if costs weren't well-controlled, farmers could easily fall into loss situations.

What Starbucks is doing in Yunnan is similar to this coffee company's market strategy in China. It has made this once tea-drinking nation begin to accept and love coffee through the concepts of coffee culture and the third place. Upstream in this industry chain, Starbucks is "making up for lost time" in the industry.

In fact, Li Xinhua also understands that transitioning directly from large-scale extensive coffee production to the specialty coffee era is an impossible task.

Starbucks faces the same challenge. In January 2009, Starbucks launched "Phoenix Dance Auspicious Clouds" blend coffee. This coffee was Starbucks' first use of Chinese Yunnan coffee beans, but only in blended form. It wasn't until five years after Starbucks' plan in Yunnan that in January 2017, Starbucks launched its first single-origin coffee beans from China.

Creating Conditions for Specialty Coffee

To some extent, Starbucks is also creating conditions for the explosion of Yunnan's specialty coffee. For example, the requirements for harvesting only fully ripe red cherries and planting shade trees are also essential steps in specialty coffee production.

For farmers, specialty coffee means higher premiums. This was difficult to achieve in the mass export era dominated by futures prices. The essence of Starbucks' "quality for premium price" strategy is to help the Yunnan coffee market break away from futures prices to some extent, introducing a pricing system completely dominated by quality and market demand - which is also how the specialty coffee market operates.

So Li Xinhua now feels he can do more.

When he heard that someone could sell specialty coffee beans for 88 yuan per kilogram, he wanted to try too.

The Evangelists of Specialty Coffee

88 yuan per kilogram. This was a small batch of specialty coffee beans, so they could be sold at 2-4 times higher than market prices. Currently in Yunnan, such specialty coffee beans account for approximately 2-5% of total production. Since 2014, the concept of specialty coffee has continuously entered Pu'er, Yunnan, including various companies, coffee training institutions, and independent specialty coffee practitioners coming here. They brought a set of specialty coffee concepts and evaluation systems.

The greatest characteristic of specialty coffee beans is their unique flavor. You can taste fruit, floral, herbal, or tobacco notes in coffee brewed from them. The key factors determining these flavors lie in the coffee bean processing methods, such as washed or natural processing - these artificially controlled fermentation methods to manage coffee bean flavors.

The entire process requires meticulous attention to detail.

Starting from harvesting, extreme care is needed - farmers can only pick fully ripe red cherries, then separate inferior coffee beans through washing. During processing, it's necessary to record the humidity, temperature, and sugar content of coffee beans. For natural processing, when to turn the beans, how many times to turn them, the size of drying beds, and the thickness of bean spread all matter - because these factors ultimately affect the final flavor of the coffee.

Specialty coffee requires harvesting only fully ripe red cherries (Image source: Shen Xuejing)

Natural processing for specialty coffee (Image source: Shen Xuejing)

When Shen Xuejing received green coffee processing training in Pu'er, she also had to repeatedly experiment with these processing methods. During the same course, a nearly 60-year-old farmer expressed desire to give up several times midway, saying: "You can never finish this work, these complex tools are too troublesome."

Li Xinhua had similar hesitations, and he and other farmers often discussed whether to pursue specialty coffee.

"After spending so much human cost and effort, you might still not do it well. You think you've made specialty coffee, but when you take it to bean merchants, they say it's not specialty and doesn't meet specialty standards," he said. Li Xinhua has two children. Following the current operational method, it's not a problem to provide his family with a relatively decent life locally - he has already built a private home and purchased a car by growing coffee beans - pursuing specialty coffee carries some risk.

But for Pu'er to produce specialty coffee, it must pay special attention to processing steps such as washing or natural processing.

Because during the era when Nestlé dominated this region, farmers all grew the single Catimor variety. This variety's flavor is not particularly unique, requiring special processing methods to give it rich taste characteristics. For farmers, this means investing exponentially more time and labor.

Dedication to Quality Improvement

To harvest specialty coffee beans in Yunnan that satisfy his standards, Chen Danqi and his team traveled to Yunnan nearly a hundred times.

Chen Danqi is the global green bean project manager for the specialty coffee brand Seesaw. The main responsibility of this job is to search for and customize specialty coffee beans that meet Seesaw's quality standards worldwide. Chen Danqi has been to world-renowned coffee-producing regions such as Panama, Colombia, and Guatemala. Before his first arrival in Yunnan in 2013, he had consistently heard the industry's widespread belief that Yunnan had no so-called specialty coffee.

But when he arrived, he discovered that Yunnan actually had considerable potential, though it lagged in information and technology. Therefore, he chose an estate and requested them to produce according to strict specialty coffee production processes, living and working with the farmers on the estate, processing coffee together. Chen Danqi found that if operated according to certain standards, Yunnan could also produce specialty coffee that met market demands.

But when he left Yunnan and returned to Shanghai, the quality of coffee beans sent from Pu'er declined sharply, completely different from the standards achievable when he was stationed at the estate.

"Later I discovered that just making demands on them wasn't enough," he said. "Technical changes aren't actually difficult because the real problem doesn't lie there. What should be done is perhaps not just technological innovation, but more importantly, cognitive innovation."

With the support of Seesaw founder Zong Xinkuang, Chen Danqi later launched a Yunnan Project. He defined the core foundation of this project as "shared values," built on common understanding to change the future of Yunnan coffee together. He and his team took turns coming to Yunnan, communicating with different estates, spending long periods with growers, training them to understand market needs, learn coffee bean quality identification, and also applying processing methods learned from other world coffees to optimize the flavor of Yunnan specialty coffee beans.

Seesaw also compiled all information and processing methods into manuals and distributed them to farmers. Each page contains detailed processing methods, and they also give farmers temperature and humidity detectors, sweetness meters, and instruments for measuring soil pH. Most importantly, these growers realize that higher quality means higher prices - as long as coffee beans are produced according to Seesaw's methods, the company will purchase them; prices are around 40 yuan, with particularly good quality commanding higher premiums.

This specialty coffee brand has cooperated with 33 estates in total, and this year has selected 6 estates for deeper collaboration. The coffee beans produced are not only used in their own stores but are also being exported to bring Yunnan coffee to the world.

"But not every purchaser does this," said Hou Ye, production manager at Torch Coffee Laboratory. "Seesaw is serious about doing this. But more green bean merchants would consider that for the same price, I can buy better green beans on the international market. Why spend time costs educating farmers?"

In 2015, Hou Ye, who was engaged in green coffee processing in Beijing, came to Pu'er to study. Afterwards, she decided to join Torch - founded by American Samuel Gurel. This barista, who specializes in green coffee processing, also saw promise in Yunnan coffee and moved here.

If information can be exchanged and farmers' concepts changed, Hou Ye believes the quality of Yunnan specialty coffee can improve rapidly. Because when she conducted cupping in 2015, she found that Yunnan specialty coffee still had quite a few flavor defects, but now when tasting it, she can already feel significant differences.

Torch not only processes green coffee in Pu'er but also conducts training courses, including green coffee processing, roasting, etc. In Pu'er, such training institutions are gradually increasing. Many international coffee industry heavyweights have also come here, such as Ted Lingle, co-founder of the Specialty Coffee Association of America (SCAA) and Coffee Quality Institute (CQI), who began paying attention to Yunnan coffee in 2014. He first served as a judge for the Pu'er Green Coffee Competition, then as a senior consultant for the Yunnan Coffee Exchange Center, helping Yunnan coffee complete connections with SCAA and CQI.

But this information is still difficult to convey to ordinary farmers.

Hou Ye found that those attending classes are basically specialty coffee practitioners from first-tier cities like Shen Xuejing, who come to production areas to learn more first-hand information about the coffee supply chain; and young people who own coffee estates in their families, whose recognition of specialty coffee is higher than their parents' generation.

The Young Generation of Coffee Farmers

Starbucks might leverage its advantages as a large company here.

This company hasn't ignored the third wave of coffee. On March 1, 2018, Starbucks opened its first Reserve store in Seattle - this high-end coffee brand personally managed by Starbucks founder Howard - offering single-origin pour-over specialty coffee like other specialty coffee shops. And when the Starbucks Reserve Shanghai Roastery opened in December 2017, Yunnan coffee appeared in the Reserve brand for the first time.

Besides the Reserve series, Starbucks also launched single-origin Yunnan coffee beans.

The Starbucks Farmer Support Center also encourages Pu'er farmers to try growing small batches of specialty coffee, purchasing them at higher prices.

Tong Yalun and his team have already experimented with various specialty coffee processing methods in Pu'er that meet Starbucks standards. They plan to train 4,000-5,000 farmers on specialty coffee at the 2018 "Starbucks Coffee Supplier Conference" - similar conferences are events Starbucks organizes for coffee farmers to thank and recognize cooperative farmers from the past year. They have been held for three consecutive years, with over 4,000 participants last year. In 2018, Yunnan coffee beans will continue to appear in the Reserve series after being processed with more diverse processing methods.

The scale advantages brought by large companies are not limited to this.

The most important issue that Yunnan coffee beans need to solve is product branding - like names such as Colombia, Guatemala, and Manila that frequently appear on specialty coffee shop menus. Currently, Yunnan's specialty coffee beans are mostly used for blending with other coffee beans to compensate for their flavor deficiencies.

Even in Shanghai, a city where specialty coffee has reached a certain scale, only a few specialty coffee shops use single-origin Yunnan coffee beans.

"Yunnan coffee beans are now one of my favorite beans," says Lindsay. She's from Italy and operates a specialty coffee shop called Volcan on Yongkang Road in Shanghai. This is also one of Shanghai's earliest specialty coffee shops. "The flavor is relatively balanced, with some nutty and fruity notes."

Seesaw has also been promoting Yunnan-origin coffee in its stores, and it's one of the brand's more popular single-origin pour-over coffees. According to Shen Xuejing's observations, at least in the Shanghai market, consumer acceptance of single-origin Yunnan coffee beans is not yet very high.

But just like cold brew and flat white - which Starbucks calls "Fu Rui Bai" - when Starbucks begins promoting these coffee products, their recognition immediately increases. Often, you'll hear customers in specialty coffee shops habitually calling flat white, this Australian coffee brewing method, "Fu Rui Bai" when ordering.

Although specialty coffee practitioners often show disdain for large companies, from a business strategy perspective, if Starbucks replicates such scale advantages to specialty coffee in Pu'er, Yunnan, it will undoubtedly accelerate its rapid rise to prominence in the coffee market.

But besides large companies, specialty coffee brands, and young people coming to Pu'er wanting to make a big impact, there's another group that might more significantly influence the fate of Yunnan specialty coffee.

The Next Generation Takes Over

Dakaihe Village is located on the border between Pu'er and Xishuangbanna. This small village also grows coffee trees covering the mountains.

In 2015, after graduating from university, Hua Ruamei returned here. Her father owns a coffee estate here. Hua Ruamei is the youngest coffee farmer in this village. She has witnessed the development of specialty coffee in Yunnan, but due to information barriers, many farmers' specialty beans are not recognized by the market.

"Many training purchasers only spread technology while ignoring local actual conditions, leading to beans being rejected for not meeting quality standards after production. Another issue is that local farmers are tempted by high-priced coffee and start mass production without market connections," she told Interface News. "The specialty industry has indeed encountered various problems in Yunnan in the past two years, and many farmers just watch but dare not start doing it."

So Hua Ruamei decided to learn specialty coffee knowledge herself, then go down to coffee estates and factories to practice with farmers. She's "one of them," so local farmers more easily trust her and accept the concept of specialty coffee. People call her "Meizi" - this name has gained some recognition in the Yunnan specialty coffee field.

In Pu'er, "second-generation coffee farmers" with ambitious goals for specialty coffee are constantly emerging. They can experiment on their family's land, know how to communicate with industry professionals through social networks, and understand that the "third wave of coffee" affecting the Chinese market will ultimately bring huge first-mover advantages to Yunnan coffee.

"The main drivers for promoting Yunnan specialty coffee are market demand, plus some professional coffee training institutions in Pu'er and a series of government promotions and emphasis," she said. "Importantly, there are also young people. We don't face the same difficulties as our parents in communicating with the outside world, and we have more channels to learn new knowledge about coffee."

Signs of Change

Changes have already begun to appear.

Hua Ruamei also irregularly holds cupping events in Dahe Village, inviting nearby farmers to participate. These farmers actually never drink coffee. When first encountering coffee, the contradiction between timidity and curiosity left a deep impression on Hua Ruamei. But after once or twice, these farmers fell in love with coffee. Now when they visit Hua Ruamei's home, they must have a cup of coffee.

Li Xinhua also set up a crude "coffee shop" beside his estate, directly grinding coffee and brewing it with hot water. In 2016, he was invited by Starbucks to attend Starbucks' Partner Family Day in Chengdu and visited the largest Starbucks store in Southwest China, the Chengdu Taikoo Li Flagship Store.

"I saw many people queuing there to buy coffee, and thought to myself, we have plenty of that coffee," he said.

When tasting a cup of pour-over coffee made by a barista, he had to admit, "Well, it's indeed better than what we brew."

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