Issue link: https://read.dmtmag.com/i/658240
36 STiR tea & coffee industry international / Issue 2, 2016 (April/May) Louis Dreyfus Commodities — Founded in 1851 and now headquartered in Rotterdam (The Netherlands), Louis Dreyfus Commodities is one of the top three global coffee merchandizers. The company opened a Beijing office in 1994. "Louis Dreyfus Commodities has been involved in the Chinese arabica market for more than five years. We believe that China's steadily growing coffee produc- tion offers much business potential. [Yunnan's] environment is highly suit- able for coffee growing and local farm- ing processes are improving day by day. These factors, complemented by efficient logistics services, make it attractive and rewarding for us to be engaged in the Chinese coffee market", says Young Zhang, the company's coffee trading manager based in Yunnan's capital city of Kunming. Starbucks — Starbucks China sources Yunnan coffee both for domestic con- sumption as well as for export to supply its operations around the world. Xinrong Wang, the company's communications director for public affairs, said that "Starbucks has become the buyer of choice for top quality coffee in Yunnan through our support of coffee farmers and by paying premium prices. Since opening in 2012, the Starbucks Farmer Support Center in Pu'er [an administrative division of Yunnan province] has increased our support for local farmers, almost doubling the number of farms and mills participating in [Starbucks'] C.A.F.E. Practices. Starbucks agronomists are on the ground every day, collaborating with farmers, sharing technical expertise and support- ing the growth of specialty coffee in Yunnan." Volcafe — Another major coffee merchandizer, Switzerland-based Volcafe, which is part of commodities trader ED & F Man, has been buying and exporting Chinese arabica for the past 10 years. To establish a better presence in Yunnan, the compa- ny last year formed a much talked-about joint venture with local coffee trading firm Simao Arabicasm Coffee. Volcafe declined further comment on its China operations. Nestlé — Swiss giant Nescafé has been testing Yunnan's potential as a sup- plier of high quality coffee since the late 1980s. The company started buying cof- fee in Pu'er in 1992 and began providing technical assistance in 1994. In Novem- ber 1997, the company further demon- strated Nestlé's long-term commitment to the development of China's coffee growing industry by opening an experi- mental and practical demonstration farm (ED farm) in Xishuangbanna prefecture, just due south of Pu'er. Farmers train at ED where they are encouraged to grow more coffee. By 2002, Nestlé purchased 100% of its coffee directly from farmers, effectively avoiding middlemen. In 2012, Nestlé's senior agronomist Wouter de Smet set up the first unit of local farms compliant with the 4C qual- ity standard. Only three years later, de Table: Chinese Coffee Production and Exports 2000-2015 * Green coffee ** Green coffee and roasted beans (1) Estimate based on projected YOY growth rate of 21% (ICO) (2) Estimate based on projected YOY growth rate of 19% (ICO) Source: International Coffee Organization (ICO) "Coffee in China" report (2015) Crop Year Production* % YOY Change Exports** % YOY Change (metric tons) (rounded) (metric tons) (rounded) 2000/2001 11,580 n/a 11,160 n/a 2001/2002 17,220 +49 12,720 +14 2002/2003 19,440 +13 15,900 +25 2003/2004 23,160 +19 16,980 +7 2004/2005 21,660 -7 14,400 -15 2005/2006 21,900 +1 18,060 +26 2006/2007 25,680 +17 21,120 +17 2007/2008 25,980 +1 24,060 +14 2008/2009 33,300 +28 31,800 +32 2009/2010 70,380 +111 33,780 +6 2010/2011 49,620 -30 37,980 +13 2011/2012 65,400 +32 58,140 +53 2012/2013 92,040 +41 76,140 +31 2013/2014 116,820 +27 70,200 -8 2014/2015 141,352 (1) +21 83,538 (2) +19 Drying court at Louis Dreyfus' coffee facility in Yunnan images courtesy of Louis Dreyfus Commodities Deliveries started to trickle in at the new Nescafé Coffee Center even before its official opening