Retailing, Franchising, and Consumerism Business Intelligence in China

American Coffee Giant Inks Chinese Coffee Bean Deal

U.S.-based Starbucks Coffee Company signed memorandum of understanding deals in China to assist local farmers to develop better sustainability practices.

The agreements were made with Yunnan Academy of Agricultural Science and People's Government of Pu'er City in Yunnan.

The American coffee retailer agreed to collaborate with the two governmental organizations to help local farmers promote responsible coffee-growing practices and develop localized high-quality coffee. The company intends to accomplish these goals through its investment in and operation of its first ever base farm, a coffee development center, coffee farmer support center, and coffee processing facilities in Pu'er. This initiative completes Starbucks entire value-chain in China and deepens its coffee presence in the country.

As part of the collaboration, Starbucks will develop and operate a base farm and processing facilities to further strengthen the company's foundation that will support its continued and sustained growth in China. Additionally, the company will operate a Farmer Support Center, its first in Asia and third globally following Costa Rica and Rwanda. Starbucks agronomists and quality experts will work directly with Yunnan's coffee farmers to provide resources and expertise to promote responsible coffee-growing practices that improve quality and enhance the size of the yield. Research will be conducted on areas such as new varietals for local adaptation, disease resistance and flavor improvements.

The provincial government plans to invest CNY3 billion in expanding green bean volume from the current 38,000 tons to 200,000 tons by 2020. Additionally, it will increase coffee acreage from the current 26,700 hectares to 100,000 hectares within the same period.

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