Cooperation with Shanghai bringing consumers more premium products from mountainous plantations

With high-quality coffee beans, Southwest China's Yunnan province has jumped on opportunities to grow its coffee business in Shanghai — a metropolis that has the largest number of coffee shops globally.

Among the first batch of Yunnan coffee players to establish a presence in Shanghai, Baoshan Bestain Coffee Co Ltd has opened the second store in April in Shanghai. The store has become a popular gathering place among local coffee bean enthusiasts.

The company is more than a coffee bean retailer. Baoshan Bestain Coffee has evolved into a comprehensive enterprise integrating coffee planting, primary processing, deep processing, research, education and the promotion of coffee culture.

"The consumption market of premium coffee is not in Yunnan, but in Shanghai. We have the confidence to grow our business in the Shanghai market, and will continue to expand stores in the next few years," said Li Lihong, founder and president of Baoshan Bestain Coffee.

"In Shanghai, people can experience and appreciate global coffee cultures, including coffee varieties and production techniques from different countries and regions, as well as coffee-related lifestyles."

Yunnan, with a coffee planting history of over a century, has become a top origin in China and is known for high-quality coffee beans and large production. Located in the "coffee bean belt" — a certain geographic region where coffee plants thrive — Baoshan is found suitable for growing Arabica beans, which feature a less acidic taste.

Currently, Baoshan Bestain Coffee operates in the form of experience stores in Shanghai, mainly selling beans from major producing regions and plantations worldwide.

The company has established its East China headquarters in Jing'an district of Shanghai, and will create a business model that integrates flagship stores, coffee outlets and baking workshops.

The company also aims to offer one-stop services for coffee shops, from coffee beans to coffee machines and even baristas.

In July last year, Baoshan Bestain Coffee made its debut in Jing'an district of Shanghai with its new brand named Baoshan Bestain Zhiziluo Coffee, riding on ties with the district branch of China Construction Bank.

Zhiziluo, a place in Fugong county, Yunnan, means "a good place given by heaven" in the Lisu ethnic language. It is located at the starting point and highest point of the local coffee bean belt. Leveraging a subtropical climate and a significant vertical climate difference, coffee beans planted there boast unique quality.

"The successful settlement of our company in Shanghai is an achievement of cooperation between the local governments of Shanghai and Yunnan, which features support from the government and financial institutions in Shanghai," Li said.

Shanghai has a social atmosphere for exchanging knowledge about premium coffee, and excellent entrepreneurs and consumers have been communicating and learning coffee cultures from each other, she added.

CCB's Jing'an branch said the flourishing coffee culture has injected a unique vitality to the city.

Supporting the growth of the coffee industry in Yunnan can also help drive rural vitalization, benefit numerous small- and micro-sized businesses, effectively boost employment in both Shanghai and Yunnan, and stimulate urban consumption, the branch said.

Back in December 2022, Chen Jining, Party secretary of Shanghai, led a delegation to Yunnan, and Baoshan Bestain Coffee plantation was one of the stops during the trip.

Chen said the city encourages Yunnan businesses to expand their presence and tap into its vast market. The cooperation requires a platform and should align with the market trends.

As China becomes a major coffee consumer, the nation's coffee sector has witnessed remarkable growth in the past few years, with numerous domestic coffee brands emerging and a more upgraded industry chain.

Shanghai owns the largest number of coffee shops in the world and the highest number of bakeries in China. According to Business Information of Shanghai, a local market information collector, as of the end of 2023, Shanghai had 9,553 coffee shops, the number of which surged 12 percent over 2022.

Guangzhou ranks second with 6,186 stores last year. The city is followed by Beijing, Chengdu in Sichuan province, Shenzhen in Guangdong province and Hangzhou in Zhejiang province, the agency said.

The booming demand for coffee beans invigorates growers in Yunnan. Baoshan Bestain Zhiziluo Coffee has established close cooperative relationships with local farmers to ensure they grow the coffee beans in a sustainable manner and receive fair compensation. In addition to supporting farmers, the company is striving to protect the ecological balance while helping develop the local coffee industry.

"We have 670 hectares of coffee plantations in Yunnan. Coffee beans sold at a good price helped drive the income growth of farmers and significantly contributed to rural vitalization," Li said.

A coffee bean enthusiast herself, Li often visits plantations and helps farmers grow better coffee beans with the knowledge she collects from customers.

Qiao Yuguang, who is in charge of a cooperative in Lushui city neighboring Baoshan in Yunnan, has engaged in business related to coffee bean planting for more than 20 years. In earlier years of his career, he was mainly involved in planting, processing and sales of traditional coffee beans.

With experience and knowledge over the two decades, Qiao took bold moves to ramp up production and sales of coffee beans. Last year, the total income of the cooperative reached 12.6 million yuan ($1.8 million).

Gaoligong Mountain in Nujiang Lisu autonomous prefecture boasts unique coffee bean planting advantages. Yet, due to the mountainous location and logistics limitations, transporting coffee beans from the mountain to the outside markets used to be a headache for the local growers.

Thanks to the cooperation between Shanghai and Yunnan, a direct sales store for Nujiang agricultural products has been opened in Pudong New Area in Shanghai, and a sales warehouse for Nujiang coffee products has been established, easing the woes faced by the growers and making it more convenient for Shanghai consumers to purchase Nujiang coffee products.