Economy

Coffee association hopes to stimulate Chinese market

By Heather Walsh (China Daily)
Updated: 2011-06-01 10:05

BOGOTA, Colombia - Colombia is looking to encourage a new generation of Chinese consumers to pick up a latte instead of tea.

Colombia's National Coffee Growers Federation is hosting experts from China for tastings this week and has created a logo to promote the brand in the Asian nation, according to the group's Chief Executive Officer Luis Munoz.

The logo includes a phonetic spelling of a fictional farmer's first name, followed by the Chinese characters meaning "imperial," "aroma" and "savor" as Colombia targets an "exponentially growing" market, Munoz said.

"The culture is thousands of years old," he said in a May 26 interview at the group's headquarters in Bogota. "It's clear the market has a new generation" open to drinking coffee and not just tea, he said.

Seattle-based Starbucks, the world's largest coffee-shop operator, plans to more than triple the number of its outlets in the Chinese mainland to 1,500 by 2015 as average profitability at stores there outpaces the United States.

Purchases by younger Chinese are fueling demand for Arabica coffee by between 10 and 15 percent a year, according to an industry group known as China Coffee Association Beijing. Mild Arabica beans are favored by brewers of specialty drinks such as Starbucks.

While consumption of commodities in China has led to higher prices for oil, coal and copper, the market for Colombian coffee in the Asian nation is "very small" and won't tip the balance between supply and demand, Munoz said.

China's coffee imports will rise to 450,000 bags in the 2010 crop year from 425,000 a year earlier, according to US Agriculture Department figures. Each bag weighs 60 kilograms.

Colombia is making inroads in Asia as it seeks to more than double its output this decade after the price of coffee touched a 14-year high in May. China, Japan, South Korea and Australia bought about 17 percent of last year's Colombian crop of 8.9 million bags, according to Munoz.

"We are bringing Colombian coffee to markets that once were far away," he said. "Asia will grow enormously."

China ranks first among 22 emerging Asian economies as the nation most likely to maintain fast growth over the next five years, according to the Bloomberg Economic Momentum Index for Developing Asia.

The federation, which represents the majority of Colombia's more than 550,000 coffee growers, forecasts 2011 production of 9.5 million bags, and output may jump to 18 million bags in 2020, according to Munoz.

Bloomberg News