The specialty coffee market is growing all over the world, and China is no exception. Although per capita coffee consumption in the country is still quite low, its consumers – usually middle and upper-class citizens in their twenties and thirties – prefer to consume coffee in specialized coffee shops, where they can buy very high-quality beverages.
Being a relatively new market for the coffee industry, the Chinese are used to paying coffee producers a better price than importers from Europe and the United States, who have been importing coffee at very low prices for many years; now that its value is rising, these Western importers do not feel comfortable paying a higher price. This makes the Chinese market an attractive new market for specialty coffee producers worldwide.
So now, the question that all coffee producers ask themselves is this: How can you enter the Chinese market? The truth is that there are several ways but the easiest would be to use intermediary companies.
In our article ‘How to export specialty coffee to Europe’, we discussed platforms known as ‘marketplaces’. Well, we recommend using the same technique to find buyers in China.
Although we have been in contact with two Chinese intermediary companies, we have only managed to do business with one. Below we will explain how these companies work and the differences between them.
Coffee Exchange. The procedure of working with these intermediary companies is very similar to that of working with European platforms. First, you have to register on their platform and send samples of your coffee so they can do the cupping.
We were not able to do business with Coffee Exchange because they wanted the producers to bear all the expenses of exporting the coffee. They also wanted the coffee to be sent to China without it being previously sold. They claimed that Chinese roasters do not want to wait till the coffee is imported; they want it right away.
This is not an appealing method of work for us because it generates many concerns for the seller, including: What happens if the coffee arrives in China and does not sell? How long will it take to sell?
We have spoken with other producers who have worked with Coffee Exchange – they have all been paid for their coffee but have waited months for the coffee to sell and for the money to arrive in their bank accounts. Some have waited up to eleven months.
If you have the necessary capital and peace of mind to work in this way, Coffee Exchange is an option for you.
Fresh Farmer This company’s processes place it firmly among the best in the market.
The main advantage of working with Fresh Farmer is that they have a representative in the producing country who is in charge of receiving samples and exporting the coffee once a sale has been made. Thus, producers do not have to incur the expenses for the shipment of samples by DHL nor in export expenses.
Like most European platforms, Fresh Farmer do a pre-sale of the coffee, so there is no need to worry about whether the coffee will sell. Most importantly, they pay for the coffee once it has been delivered to their representative in the country of origin. This means that there is no need to wait for weeks or months for the payment; it is received in a matter of days. We all know how important cash flow is for coffee producers.
Without a doubt, working with Fresh Farmer offers many advantages. The only thing we believe they should improve is that the producer should get access to the platform and be able to establish direct contact with the final buyer; this is something platforms like Algrano offer and that producers, roasters and final consumers appreciate as it helps with traceability, transparency and fair price of the final product.
At the moment, this is the only way we have been able to make sales in the Chinese market. If we manage to find any other way, we will certainly share it with you!
If you found this article interesting, please share it on your social networks and website.