Nestle Plans to open Coffee Center in China

Published on Author crosby

Nestle announced that they plan to build a coffee center in China’s Yunnan province according to a report from China Daily. The Switzerland-based company will spend 100 million yuan or $15.97 million to build a coffee farming institute, warehouse, and laboratory. The institute will provide training to 5,000 coffe farmers, agronomists, and business professionals each year according to a statement from Nestle.
This also marks a huge step in China’s globalization of their economy. After making a deal with Vodofone to bid for the mobile rights to Myanmar, this marks another example of China reaching out to western countries for increased globalization of their economy.

5 Responses to Nestle Plans to open Coffee Center in China

  1. The coffee industry is an interesting growth sector in China. By further research, The current coffee market is vacant and leaves a potential for boundless growth. I found that China’s coffe industry is growing 30% per year due to the fact that there is such a low historical consumption rate.

  2. I found the same statistics as Josh. The coffee industry in China is an interesting prospect that could potentially boast a lot of jobs for Chinese workers. Also, the willingness to open to an American based company signals a shift towards a more open economy which may excite other American based producers.

  3. I think this is an interesting move in light of a post earlier in the semester that tracked the country’s increasing reliance on Nestle’s bottled water. As the country gives Nestle more business, it seems prudent for the company to expand into new markets. This is true especially when considering how much growth China’s coffee industry can experience in the next few years. A 16 million dollar investment seems like a small price to pay for a shot at a potentially highly lucrative industry.

  4. As we see the expansion of the Chinese global economy, will the introduction of coffee and its manufacturing process in China follow in the footsteps of the growth of the car industry as we read in American Wheels? I find it difficult to believe that it will receive much traction from higher end foreign brands given the regional emphasis of coffee beans. Furthermore, China has a lot of family owned and smaller franchises locally – how will Nestle’s introduction and the new growing coffee industry negatively impact these small businesses and their role in China’s economy?

  5. Restrain the hyperbole: “This also marks a huge step in China’s globalization of their economy.” This is flat-out wrong. Coffee is a trivial item within the agricultural and food sectors, and the former is a shrinking part of the overall economy. Sure, 30% pa growth could be going on, but if the base is low, that really says nothing. And the investment is $16 million equivalent? Trivial: Chinese trade is over US$1,000,000 million [=$1 trillion], FDI is in the US$ tens of billions in a slow year.