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Arabica Roasters Wants to Sell All the Coffee in China : Trade: The company, which will import its first bean shipment this month, sees the beverage as an ‘inexpensive indulgence’ with a Western appeal--a market ripe for growth.

From Reuters

Convincing a billion Chinese tea drinkers to set aside the habit of a few millennia in favor of a thick and bitter-tasting foreign brew called coffee was a challenge Stuart Eunson could not let pass.

When the inveterate coffee drinker found himself stranded as a student in the country that cliches about tea were created for, Eunson, now 25, saw an immediate market.

To exploit it, he and two like-minded friends this year established their own company, Arabica Roasters. This month they will import their first shipment of coffee beans to blend and roast and sell in Beijing.

The average Chinese, according to coffee industry figures, drinks about 1,500 cups of tea a year.

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Until recently it was a rare Chinese indeed who began his day with a cup of steaming, home-ground, home-brewed java.

But now, according to Eunson, at least 1% of Beijing’s 11 million people do just that, and they own their own apparatus--plungers, percolators, grinders.

“The potential of the Chinese market is very good (because) coffee is an inexpensive indulgence,” said Eunson, who hails from Princeton, Mass.

It was at Colby College in Maine that Eunson met his business partner, Ronald Thompson, 26, of Bethlehem, Pa.

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After graduation, Thompson set off for Beijing, where his work with a law firm has given him the knowledge needed for setting up and running a wholly owned company in China.

Eunson followed Thompson to Beijing two years later, and there they teamed up with Australian Richard Wilson to form Arabica.

The team saw that among the many needs that could be met in the world’s most populous nation was a good cup of coffee.

The members of China’s emerging coffee generation probably bought about 44 pounds of coffee beans each a year, Eunson said, representing potential annual sales in Beijing alone of 3.08 million pounds.

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“The Chinese are starting to drink more and more coffee on a daily basis,” he said. “There are a lot of people in Beijing now who regularly drink coffee, and at least 1% of the population would drink at least one cup a day.”

Coffee has not always been an alien beverage to the Chinese. A coffee culture existed before the revolution of 1949 in cities with a history of Western contact such as Shanghai and Guangzhou but disappeared very quickly thereafter.

As China over the past 16 years has opened up once more to outside cultural influences, coffee has become associated with a modern, Western lifestyle.

Cafes are again becoming popular meeting places in Shanghai and Guangzhou, and a few have even opened up in the more conservative cities to the north.

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However, industry pundits say, most coffee products are still purchased as gifts, and creating that coffee habit is no easy task.

Nestle, the Swiss food giant whose mainstay is instant coffee, left China in 1952 and did not return until 1985, when it found little or no market for its coffee products.

The most popular way to buy such brands as Nescafe and Maxwell House today is in a gold and red box containing a jar of instant coffee, a jar of powdered creamer and a spoon emblazoned with the brand name.

Available figures show that in 1992, Chinese bought 2,500 metric tons of instant coffee, worth around $70 million.

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Eunson believes that once Chinese people understand the difference between instant coffee and coffee brewed from freshly roasted beans, market expansion can only be exponential.

China does grow its own coffee--about 5,000 tons a year in the tropical southern provinces of Yunnan and Hainan Island--and in 1992 exported 2,645 pounds to Japan, Italy, Hong Kong and Taiwan.

About half the coffee grown in the country comes from a United Nations Development Program project in Yunnan that, according to official press reports, received export orders in the first half of this year for 250 tons.

Eunson said Arabica Roasters would be using a little Yunnan coffee in its blends, but that most of the beans would come from Jamaica, Kenya, Colombia, Papua New Guinea, Ethiopia, Puerto Rico, Hawaii, India and Vietnam.

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The first shipment of two tons was due to arrive at the company’s processing plant in Beijing’s northern suburbs in mid-January, and the 50,000 Westerners currently living in Beijing would be the company’s initial target, Eunson said.

“Coffee in Beijing is priced between five yuan (58 cents) and 25 yuan ($3) (a cup), and that’s not in the foreign hotels” where inflated prices and service charges often pushed the price beyond $4 a cup, he said.

Arabica’s coffee, by contrast, would cost between 20 and 30 cents a cup in bean form.

“We’re hoping to develop a market so we can sell 100 kilograms to 200 kilograms (220 pound to 440 pounds) a day within six months of beginning,” he said.

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