In recent years, the Chinese coffee market has become more and more popular year by year. Is growing and producing coffee a good business?

Starbucks and Luckin Coffee earn a big money by selling coffee!

Coffee giant Starbucks will open 654 new stores in the Chinese market in 2021, breaking new records. Tims China, which only entered the Chinese market in 2019, recently announced that it has received a total of 194.5 million US dollars, has opened 410 stores, and also announced that it will achieve full profitability in 2023.

Luckin Coffee not only got out of the financial fraud storm, but also achieved profitability. The number of latest stores has probably exceeded 6,000. The new coffee force MANNER opened 200 new stores in one breath, and China Post also opened the first "Post Office Coffee" coffee shop in February this year, entering the coffee track.

We can look at it from four aspects: coffee planting investment, investment payback period, factors affecting the coffee bean market price and the proportion of profits in each link of the industrial chain.

First, growing coffee requires a certain amount of up-front investment, with a long payback period.

Growing coffee requires a certain amount of up-front investment, which varies according to the size of the planting area.

In the above-mentioned documentary, coffee farmer Lao Dong sold his house in 2010, invested 140,000 yuan, and started to grow coffee. Such a large investment is the entire family property of many coffee farmers.

It takes a period of time to invest in growing coffee. It takes 3 to 5 years for coffee trees to bear fruit, while coffee trees that are 6 to 10 years old are most likely to bear fruit, and the harvest period is about 15 to 20 years.

From the initial investment in coffee planting to the planting of coffee trees to the results, it takes several years of investment period, and it requires continuous investment in maintenance costs and hard work.

Second, the quality of coffee beans determines the price and ultimately the profit.

When coffee trees begin to bear fruit, coffee farmers will be cautious. The growth of coffee cherries is closely related to the climatic conditions of the year, as well as meteorological factors such as temperature, light, heat, wind speed, and rainfall, which will directly affect the yield and quality of coffee, and ultimately affect coffee. the price of beans.

The quality of coffee is evaluated according to different types, sizes, shapes, hardness, number of defects, degree of defects, etc. Specialty coffee beans are of the best quality and the most expensive, but the output is limited.

For example, the American Specialty Coffee Association standards mainly include: rich dry aroma, wet aroma, acidity, body, aftertaste, taste, and overall taste balance.

Similarly, if the coffee beans produced in Yunnan are to be exported to the international market, they need to be certified by the International Coffee Organization and must also meet the quality and quality standards of the relevant state departments.

Third, the market price of coffee beans fluctuates greatly and is affected by many factors.
When Yunnan first started to grow coffee, the global output was very small, and there was no bargaining power at that time, and the purchase price was often lower than the price quoted by the New York Stock Exchange for green beans.

Yunnan coffee beans have no pricing power, and the international market once suppressed the price of Yunnan coffee beans, and coffee prices will be significantly restricted and affected by futures prices.

For example, in 2012, Nestlé also announced that it would stop purchasing Yunnan coffee beans, which triggered panic selling by coffee farmers.

In terms of profitability, grow coffee are definitely inferior to coffee sellers for selling coffee.

News from drip coffee bag packing machine manufacturer. Thank you!

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