Nestle brews fresh investment as world savors Pu'er coffee

During 2011 and 2012, Nestle bought more than 10,000 tons of premium Arabica coffee beans from farmers in Pu'er, a year-on-year increase of 25 percent. The company said it plans to purchase more than 70,000 tons in the 2012-13 season.

Starbucks said it has increased its coffee purchase from Yunnan by more than 20 times since 2007, when it first started purchasing the beans.

Dong Zhihua, vice-president of the Coffee Association of Yunnan, said local demand for coffee is increasing in tandem with overseas consumption.

According to research firm Mintel, the Chinese mainland market for packaged coffee products has grown at a compound annual growth rate of 18 percent a year since 2007, and could rise another 75 percent to 16 billion yuan ($2.5 billion) by 2017.

The value of coffee sales in China reached 6.25 billion yuan in 2011, up 20 percent from a year earlier, according to market research firm Euromonitor International.

Local government officials said Pu'er welcomes multinational companies, such as Nestle and Starbucks, to cultivate in the region as it helps local farmers increase their income while boosting the local government's tax revenue.

"Pu'er is the origin of the famed Pu'er tea leaves. Isn't it good that the city has gained another title as the Chinese capital of coffee beans?" said Dong.

liwoke@chinadaily.com.cn