After several years of low prices, the Yunnan coffee market has finally ushered in a new change.
Since 2021, driven by a new round of national tide and domestic coffee consumption, Yunnan coffee beans are increasingly appearing in the menus of major coffee brands, and the price of Yunnan coffee beans is also rising rapidly.
However, Yicai reporter learned that the rise in the price of coffee beans in Yunnan is inseparable from the quality improvement brought about by the efforts of Yunnan coffee manor owners in coffee planting and processing technology in recent years, but more from coffee Driven by external factors such as skyrocketing futures and the impact of the epidemic.
Yunnan is the largest coffee producing area in China, but problems such as lack of pricing power, high cost, and scattered planting plague the local coffee industry.
The ecology of Yunnan's coffee industry is still fragile, and there is still a long way to go to build a strong brand.
skyrocketing coffee beans
The price of coffee this year gave Li Guanting, general manager of Aizhe Coffee, a bit of a headache. As a "second generation coffee", he began to contact the coffee trade business very early. During the coffee harvest season every year, as a trader, Li Guanting will follow the needs of customers. Find suitable sources between plantations and factories.
"The spot of coffee beans this year has risen by about 65%." Li Guanting told the First Financial Reporter that the purchase price of first-class commercial beans in 2021 has risen to 24 to 26 yuan/kg, and the price has risen to 34 yuan just after the Spring Festival in 2022. Yuan/kg.
For traders, the cost of coffee beans is rising, and downstream coffee companies will not accept such price increases immediately, and the pressure on traders increases rapidly.
Also feeling the pressure is Sai Xiaoou, the young owner of Yunlan Manor in Xishuangbanna. Yunlan Manor is also considered to be one of the representative enterprises of Yunnan specialty coffee, and was once the coffee bean supplier of the Internet celebrity cafe Manner.
He told reporters that there are too many orders this year, and the demand for beans is particularly large, but the cost of beans has also doubled to three times, making business more difficult for high-quality beans.
Because the price of high-quality beans itself is high, if the cost rises too fast, the selling price will exceed the market's acceptance, and the profit will become thinner.
The price is still rising recently, and downstream customers are also very anxious, and they are concerned about the price and supply every day.
According to the Xinhua Yunnan (Pu'er) Coffee Price Index, in the week of February 20, the index closed at 1878.23, an increase of 87.82% compared with the base period. According to the compilation rules, with November 3, 2017 as the base period, the index reflects The price trend of coffee market in Yunnan Province.
However, this round of Yunnan coffee's rise is not entirely caused by the relationship between supply and demand, but international coffee futures have a greater impact.
In Li Guanting's view, the price increase of Yunnan coffee is related to the global epidemic. The epidemic has caused a great delay in the supply chain of coffee producing and consuming countries. The average delivery time has increased from 1-2 months to 3-4 In recent months, the market supply has been reduced, and coffee consumption is still rising rapidly, especially in the Chinese market, thus driving up the price of Yunnan coffee beans.
More importantly, the pricing of Yunnan coffee has always followed coffee futures. The recent surge in international futures has also led to a surge in the spot price of Yunnan coffee.
As of the close on February 25, 2022, the price of C-type coffee futures in the United States reached 238 cents per pound, which is also a high in the past ten years, and has doubled compared to the price of about 60 cents in the same period in 2019.
The global price of small-grain coffee will be priced with reference to this futures price, and Yunnan production areas are no exception.
An investor told Yicai.com that he was surprised when he inspected the Yunnan coffee project before. Coffee farmers use their mobile phones to check the coffee futures market on the New York Stock Exchange every day, which is very rare in other agricultural projects.
The embarrassment of no pricing power
According to this year's coffee purchase price and the coffee planting cost of 18 yuan/kg, coffee farmers in Yunnan still have good profit margins this year.
However, Li Guanting told the First Financial Reporter that this is not abnormal. It is only a temporary result of the international coffee futures price reaching a high point.
Although pricing based on international futures prices is a major feature of the coffee industry, compared with other producing areas, Yunnan coffee producing areas have higher costs, so the industry operates bleakly when international coffee futures prices are low.
Yunnan is the main coffee growing area in China, and 99% of the domestic coffee production comes from here. According to the "2019 Yunnan Coffee Industry Development Report", the coffee planting area in Yunnan Province reached 1.8315 million mu in 2014. Affected by market prices, the area gradually decreased to 1,567,300 mu by 2019.
Just before this round of coffee price hikes, some coffee farmers in Yunnan were still cutting down coffee trees and planting green beans and other cash crops.
The report shows that in 2018, the average price of green coffee beans in Yunnan Province was 14.78 yuan/kg, which was lower than the cost price of 15 yuan/kg. In the first half of 2019, it was only 13 yuan/kg. From 2015 to 2018, the price of green coffee beans in Yunnan Province was 14.78 yuan/kg. It fluctuates between RMB 17.93/kg, which is basically consistent with the downturn in international futures in the same period.
Wang Yihan, the owner of Xiyin Honglong Manor in Baoshan, Yunnan, told Yicai.com that during the downturn in the industry, farmers could only earn 3,000 yuan per mu of coffee per year. He once found a vegetable farmer out of curiosity to understand the market. Green beans can earn 10,000 yuan per year.
In fact, it is not cost-effective for Yunnan coffee to follow international futures pricing. Due to the scattered planting and manual labor, the unit cost of Yunnan coffee is higher than that of Ethiopia, Colombia and other producing areas, but the international futures market does not consider these differences. .
According to Wang Yihan, the labor cost per day in some coffee-producing areas in the world is only equivalent to the price of a subway ticket, but in Baoshan, Yunnan, labor costs are 100 to 120 yuan per day.
The most skilled pickers adopt the fastest way of picking fruit by bunches. They can only pick 230 kilograms of coffee cherries a day. If they choose whole red fruits one by one, they can only pick 70 kilograms to 80 kilograms a day.
When the industry is at a low point, the purchase price of coffee cherries is only 2-3 yuan per kilogram. According to the calculation of 6 kilograms of cherries producing one kilogram of coffee rice, the impact of labor costs is evident.
Zhang Jie, a Shanghai-based investor, told Yicai.com that around 2017, he had invested in a coffee project in Yunnan. When inspecting coffee planting in Baoshan and other areas, he found that standardized planting had been achieved in the local area, and the coffee beans produced were mainly sold to At Louis Dreyfus, the gross profit of the planting part was still considerable.
But he soon discovered that due to being at the bottom of the industry chain and lack of pricing power, with the downturn in the market, the net profit of the project became meager, and finally this investment of tens of millions was wasted.
In the Yunnan coffee industry report, it is pointed out that the coffee industry in Yunnan Province is mainly based on planting. Enterprises mainly purchase and sell coffee beans. The terminal consumption of instant coffee and ready-to-drink coffee is relatively small. Although domestic coffee consumption has increased year by year, most consumers are exposed to The products are basically end products, and they are more identified with foreign coffee brands, so it is difficult to get rid of the identity of the origin of raw materials.
For a long time, Yunnan coffee was mainly exported as raw materials. When the industry was at a low point in the past few years, some people accused Nestle, Starbucks and other big coffee buyers for turning Yunnan into a raw material origin and making wedding dresses for its development.
Nestlé responded to Yicai that for many years, Nestlé’s purchase of coffee beans in Pu’er has been based on the international price of coffee beans, and the price mechanism is open and transparent, and coffee farmers can learn about the price in the public domain.
Through the "Nescafé Coffee Plan", Nestlé works with local governments and farmers to improve farming practices to ensure that coffee cultivation is sustainable, while reducing input costs, increasing productivity, and striving to maximize overall agricultural income.
During the visit, there are not a few people in the industry who do not agree with the statement of the wedding dress.
Wang Zhendong, chairman of Shanghai Feiyue Investment Management Co., Ltd., told the First Financial Reporter that the arrival of Nestle and Starbucks has also promoted the standardized planting of Yunnan coffee industry and improved the local coffee planting technology and product quality.
The decentralized farming model of smallholder farmers also brings some drawbacks, such as product differences caused by extensive farming management.
Wang Yihan told Yicai.com that the planting level of coffee farmers is uneven. For example, if a trader needs 2,000 tons of coffee beans, they have to purchase "Baijia beans". The problem is that the batch stability between farmers and farmers is relatively high. Poor, will affect the overall quality and pricing.
The higher costs and lower market prices in the past few years have affected the enthusiasm of coffee farmers to improve their planting; domestic coffee demand has grown in the past two years. As long as the price is right, even low-grade or broken coffee beans will not worry about sales. The milk tea shops and tea shops in the end will buy them all, and the coffee farmers lack the motivation to improve.
On the other hand, Yunnan itself has unique advantages in developing the coffee industry, but it also has its own limitations.
Wang Zhendong told the first financial reporter that Yunnan coffee has not been separated from the brand and origin and is closely related to the industrial chain. On the one hand, Yunnan is located in the southwest, and the talents and industrial chain supporting are relatively backward; on the other hand, commercial coffee is the market leader, but in the industry Most of the coffee beans in multi-producing areas are blended to hedge against fluctuations in the quality of agricultural products and fluctuations in bulk prices. Therefore, Yunnan seems to be close to the consumer market, but it is actually far away from sea ports and coffee beans from other producing areas, so it is difficult to Get rid of the identity of the origin of raw materials.
According to public information, there are 15 countries in the world with a total output of more than 100,000 tons, and Brazil, Vietnam, and Colombia are among the top three.
In terms of sales, Europe and the United States are the main coffee consumption markets, and as a beverage, the supply and demand situation is also the main factor affecting the price of coffee.
In Sai Xiaoou's view, from a pertinent point of view, commodity pricing must always follow the laws of the market, but it is too difficult to forcibly set prices from the source.
Previously, Yunnan and Chongqing had also established coffee trading centers, intending to influence the price of coffee trading, but the actual effect was mediocre.
Many respondents believe that coffee is not a food-safe agricultural product, and on the basis of global trade, coffee products are highly substitutable. If Yunnan production areas do not have advantages in terms of output, scale and cost, it is difficult to have pricing power. .
How to make a strong "name"
Generally speaking, if you want to improve the market competitiveness of your products, you can either improve efficiency and reduce costs; or you can improve quality and increase prices.
In recent years, the coffee industry in Yunnan has also been looking for new ways, especially the "second generation of coffee" who have gradually grown up, showing a way of thinking that is different from the previous generation.
The most representative is the gradual emergence of a group of Yunnan boutique coffee farms and brands with sentiments and ideals, and boutique coffee has also become a way to fight against futures pricing.
Most of these new manor owners are willing to spend more effort on planting improvement, and purchase whole red fruits from high-quality coffee plantations at higher prices, and tirelessly try processing methods such as washing, sun drying, and honey processing to create more abundant The flavor level of the coffee beans adds value.
Wang Yihan told Yicai.com that the improvement cycle for planting is very long. The manor has planted 2,000 mu of improved varieties and purchased coffee from farmers in 5 or 6 production plots. To improve the quality, first start the brand.
Every year, local coffee bean competitions are held in Yunnan. The coffee beans that win the ranking can be sold for about 100 yuan/kg, which also promotes more coffee farms to learn and imitate.
And the high-quality product has also played a role in promoting the development of Yunnan coffee in the domestic market, and more and more coffee products named after the manor have appeared in the market.
In 2021, Yunnan specialty coffee will become more and more common in the domestic market. Not only Starbucks and Nestlé have launched Yunnan specialty coffee products, but at the same time, Yunnan specialty coffee has also become the seat of various Internet celebrity coffees and independent cafes. Guests, such as MANNER COFFEE, Luckin Coffee, Seesaw, and Sandunban, will all launch products from Yunnan production areas in 2021.
Wang Zhendong believes that the quality of Yunnan coffee is improving, but the cost performance and stability need to be improved. However, more and more domestic coffee shops have begun to launch products made of Yunnan coffee beans as seasonal new products to test the market response. It is an opportunity for Yunnan coffee.
It is worth noting that China’s coffee consumption is currently ushering in a round of development peaks, especially in the field of freshly ground coffee. With the help of capital, well-known coffee brands such as Tims Coffee, Peets Coffee, and Blue Bottle Coffee among foreign brands are also Accelerating its entry into the Chinese market, domestic boutique coffee chains such as Manner, Mstand, and Seesaw have also set off a shop opening battle.
And this is indeed a new opportunity for the Yunnan coffee industry.
However, the farm owners of Yunnan coffee still remain calm. In their opinion, high-quality coffee can indeed enhance the value of Yunnan coffee. Or combine to consume.
That is to say, the national tide and the coffee tropics have stimulated the consumption of Yunnan coffee beans and the conversion of the market, but to truly change the operating income of the Yunnan coffee industry, the market needs to consume more freeze-dried instant coffee, hanging ears made of Yunnan coffee beans. Coffee, etc. and increase the proportion of Yunnan coffee beans in the blended bean formula, but behind this requires good enough quality and cost-effectiveness to support.
A person in the coffee roasting industry in Beijing told the First Financial Reporter that Yunnan beans have indeed become more and more hot in the past two years. Some manor owners are learning planting management, and the improvement of processing methods has promoted the improvement of quality. The overall cost-effectiveness of coffee beans is unbelievably high, and sometimes green beans that are not handled well are sometimes received.
"It is the commercial coffee that determines the origin of the coffee." Li Guanting told reporters that on the basis of the existing planting bases, he plans to try to establish one or two mechanized planting demonstration bases to improve quality and output and reduce costs.
Although Yunnan has many mountains, it is not that it does not have the conditions for mechanized production. It is just that the previous planting plots were planned for non-mechanical production. If it is changed to be suitable for mechanization, there will be economic and time losses. Therefore, coffee farmers are not willing to try.
At the same time, Li Guanting took advantage of the opportunity of Yunnan coffee to become popular in the consumer market, and began to promote the sales of consumer products such as coffee beans and ear-hanging coffee of the consumer brand Aizhe Coffee, as well as opening a coffee shop of the same brand. The market feedback surprised him In 2021, Aizhe's ear-mounted coffee will sell 2.4 million in the case of insufficient production capacity, while Li Guanting has set a sales target of 15 million for his branded coffee in 2022.
Coincidentally, although Yunlan Manor is already well-known in the circle, Sai Xiaoou still chooses to open a coffee brand with good food language independently, with cheap coffee as a selling point, specializing in commercial beans and cafe business.
"Specialty coffee has a tendency to be amplified by hype in China." Sai Xiaoou told Yicai.com that as a differentiated product, specialty coffee has a high bargaining power, but at present, many products that lack differentiation are also based on the concept of boutique Being pushed to the market, one day the market will get tired too.
And most consumers still drink a cup of coffee out of a refreshing need, and it doesn’t necessarily have to contain strawberry and floral aromas.
In Sai Xiaoou's view, specialty coffee has opened up some situations, but it cannot be rushed, because without the awareness and understanding of mass consumers, it is difficult for the business of specialty coffee to expand. With content e-commerce and mobile Internet With the development of coffee farms, information communication between coffee farms and consumers is more direct, and opportunities for Yunnan coffee are still to come.
From the perspective of the industry, although Yunnan Coffee has seen some new directions, there is still a long way to go.
On the whole, most of the coffee-producing areas in the world are not major coffee consumption areas, and the achievement of a well-known coffee brand is not something that can be achieved overnight. It requires multi-party cooperation and the persistent efforts and investment of all parties in the value chain. .