Where lies the path for the industrialization of Yunnan tea?

   [Today’s Perspective] Where Lies the Path for the Industrialization of Yunnan Tea?
2017-08-15 08:41:14 Source: Yunnan Net (Kunming)
(Original Title: [Today’s Perspective] Where Lies the Path for the Industrialization of Yunnan Tea?)
Reporter Wang Shujuan
Background
Since the onset of spring this year, our province has intensified brand promotion and bolstered technical guidance, resulting in a favorable development trend for spring tea: stable acreage, a slight increase in output, rising unit prices, higher production value, and increased incomes for tea farmers. At the 12th China Yunnan Pu’er Tea International Expo and Trade Fair (hereinafter referred to as the “Tea Expo”), held on July 28, industry experts and scholars conducted an analysis and assessment of the tea industry’s future prospects.
 

Topic
What challenges is the tea industry currently facing? How can the “100-Billion-Yuan Yunnan Tea” industrial development plan be implemented? And how can we ensure the industry’s sustained, healthy growth? At the Tea Expo, stakeholders engaged in discussions and exchanges.
 

Seeing the Changes: Mass Consumption Soars as Cloud Tea Ventures Online
In the past, at tea expos, Pu’er teas priced at thousands or even tens of thousands of yuan were the main attraction—drawing large crowds but few buyers. This year, major tea brands have rolled out products at more affordable price points. According to the regional manager of Yunnan Six Tea Mountains Tea Industry Co., Ltd., since the beginning of the year, demand for mid- to low‑end, everyday‑drinking teas has surged across online channels, brick‑and‑mortar stores, and trade shows. This indicates a marked rise in market acceptance of Yunnan teas: beyond the niche of discerning, high‑end connoisseurs, an increasing number of consumers now embrace Yunnan tea. At the expo, many visitors left with bags full of purchases. “More and more people are drinking tea these days,” said Mr. Zhang, a local resident. “The expo brings together products from leading brands, and there are ever more cost‑effective options. I bought quite a bit today—keeping some for my family and giving the rest to friends outside the province who love Pu’er.”
Traditional brick-and-mortar experience stores have long been the primary channel for Pu’er tea sales. As consumer habits evolve, most Pu’er tea retailers are now riding the wave of digital‑age transformation. At tea expos, nearly every brand maintains an online store, and some have even established dedicated e‑commerce marketing teams. Xie Haifeng, head of the Marketing Promotion Department at Dayi Group’s Marketing Center, noted: “In recent years, Dayi has significantly ramped up its online sales efforts. Analyzing the data, we see that Dayi has claimed the top spot in Pu’er tea sales over the past few days, and an increasing number of consumers are discovering Pu’er tea through online platforms.” Industry experts point out that the rapid growth of Pu’er tea sales on e‑commerce channels signals that this tea has entered the era of mainstream consumption.
Si Xianglong, head of the Yunnan Provincial E‑Commerce Public Service Center for the Tea Industry, stated that in recent years, numerous tea enterprises, traders, and farmers in Yunnan have leveraged online marketing, management, and services, embarking on a new “Internet Plus Cloud Tea” initiative. This has effectively boosted the visibility and market share of Yunnan tea brands. However, the overall e‑commerce development level among Yunnan tea companies remains modest, with notable shortcomings in supply-chain integration and customer‑service systems. Many tea firms, in their pursuit of volume through price competition, operate on a relatively small scale, all of which hinders the healthy and sustainable growth of Yunnan’s tea e‑commerce market.

On the agenda: Analyzing Pu’er tea inventories and cautiously expanding tea plantation acreage.
During the Tea Expo, at the Yunnan Province Pu’er Tea Industry Development Expert Symposium, the question of “just how much Pu’er tea is currently in stock” sparked lively debate among all parties.
Professor Gao Zhao of the Department of Biology at Yunnan University candidly acknowledges that Yunnan’s tea production has now surpassed 400,000 tons per year. At present, the biggest challenge facing the Yunnan tea industry is no longer expanding planting acreage, but rather finding ways to market Yunnan’s premium teas worldwide. To effectively promote Yunnan tea, the key lies in accurately assessing the true inventory levels of Pu’er tea.
“In Dongguan, one business owner alone has 7,000 tons of tea stored at home.” Such cases are far from rare. At the conference, numerous experts and scholars noted that merchants along the coastal regions have a longstanding habit of hoarding large quantities of Pu’er tea; if these stockpiles were to re-enter the market, they could significantly influence future price trends. Meanwhile, when the total inventory—including teas held by collectors and those earmarked for blending on various tea mountains—is factored in, the figure of 1 million tons is by no means an exaggerated estimate within the industry.
Wang Minzheng, Director of the Provincial Department of Agriculture, stated that, according to information provided by the Ministry of Agriculture, 10 percent of China’s tea production is currently in surplus. Across all levels of agricultural and tea‑industry authorities in the province, proactive assessments of the development landscape have been conducted, brand promotion has been intensified, and technical guidance has been strengthened. As a result, Yunnan’s spring tea sector has generally maintained a favorable trajectory: stable planting area, a slight increase in output, rising unit prices, higher total value, and increased incomes for tea farmers. In Yunnan, despite robust production and strong sales and a clear upward trend in spring tea prices, some regions are experiencing sluggish market conditions—consistent with the situation reported by the Ministry of Agriculture. Looking ahead, how to strategically plan the industry’s planting acreage and distribution channels will be crucial.
According to statistics, as of May 31, the province’s tea‑planting area stood at 6.15 million mu, with 5.80 million mu under harvest—both up by 50,000 mu compared with the same period last year, representing increases of 0.81% and 0.87%, respectively. Total spring tea production reached 155,000 tons, an increase of 6,600 tons, or 4.47%, year on year. In light of existing market inventories and the province’s cultivation landscape, Gao Zhao argues that further expansion of planting acreage should be restrained, with an optimal mix of 40% green tea, 30% Pu’er tea, and 30% black tea. Benefiting from Yunnan’s exceptional natural endowments, in addition to Pu’er tea, vigorous development of other categories such as black tea could enable the region to compete with internationally renowned tea varieties. Meanwhile, Wang Minzheng contends that moving forward, the Yunnan tea industry should be expanded through an integrated, cross‑sectoral approach: rare ancient‑tree teas and terrace‑grown teas should each follow their own distinct paths, transforming Yunnan’s unique resource advantages into high‑quality agricultural products and further broadening their market reach.
 

Talking about the Future: Advancing the “100-Billion-Yuan Cloud Tea” Initiative; Experts Call for Brand Building

This year marks the inaugural year of implementing the “Trillion‑Yuan Cloud Tea” industrial development plan. The provincial government has established the Yunnan Provincial Leading Group for Accelerating the Development of the Tea and Walnut Industries, with a senior provincial official serving as chair and leaders from more than ten provincial departments as members, thus pioneering a multi‑departmental approach to driving tea‑industry growth and laying a solid foundation for scaling up and strengthening the cloud tea sector. Meanwhile, efforts have been made to secure over RMB 100 million in funding from the Ministry of Agriculture and the Ministry of Finance, while integrating RMB 50 million in provincial fiscal resources, to launch a series of key projects, including modern agricultural tea‑industry demonstration parks, pilot counties for replacing chemical fertilizers with organic ones, model counties for green, high‑yield, and efficient tea production, and demonstration zones for the integrated development of primary, secondary, and tertiary industries. These initiatives represent an unprecedented level of investment, providing robust financial support for the industry’s continued growth.
Regarding the opportunity to carve out a blue‑ocean market for Yunnan’s renowned teas, industry experts almost unanimously agree that brand building must be taken to the next level. Liu Pingjun, Chairman of the China Brand Building Promotion Association, stated: “Yunnan’s agricultural sector should seize the opportunities presented by supply‑side structural reform. The Yunnan tea industry must strengthen its role in brand leadership, develop a brand‑driven ‘smile curve,’ and elevate the value of Yunnan tea toward the high end. At the same time, while building brands, it is essential to foster industrial clusters, bring together influential Yunnan tea brands, and work collaboratively to create and compete on the international stage.”
Wang Minzheng stated that this year, the Yunnan tea industry has taken a new step forward in brand development. The “Pu’er Tea” public brand has reached a value of RMB 6 billion, ranking first nationwide and earning recognition as one of China’s Top Ten Regional Public Tea Brands; the “Dian Red Tea” public brand is valued at RMB 1.8 billion and has been named an Outstanding Chinese Tea Brand. Meanwhile, Menghai County and Fengqing County have successively established National Demonstration Zones for Building Well-Known Brands in the Pu’er Tea Industry and the Dian Red Tea Industry, respectively, significantly enhancing the influence of Yunnan tea brands.
Going forward, our province will remain steadfast in pursuing the “100-billion-yuan cloud tea” development goal, with a focus on advancing supply-side structural reform in the cloud tea industry. We will continue to unlock potential and deliver results under the guiding principles of “green, high-quality, and healthy.” Promoting “greenification” means leveraging pilot projects for replacing chemical fertilizers with organic ones and building high-standard ecological tea gardens, while also launching certification programs for “organic tea cultivation bases,” thereby driving the green development of Yunnan’s tea industry and establishing Yunnan as the nation’s largest base for organic tea production. Advancing “high quality” entails formulating a comprehensive, end-to-end industry standard system—from tea garden to teacup—implementing a brand‑development strategy, strengthening certification under the “Three Products and One Standard” framework, and, capitalizing on the unique strengths and characteristics of Yunnan tea, bolstering scientific and technological support to continuously elevate the quality of “Yunnan tea.” Pursuing “healthiness” means embracing the vision that a healthy environment, sound processing methods, safe storage conditions, responsible cultural promotion, and robust brand building are all essential for sustainable development, thus fostering the healthy growth of the cloud tea industry.

(Original Title: [Today’s Perspective] Where Does the Industrialization of Yunnan Tea Head Next?)
Source: Yunnan Net Editor-in-charge: Wang Xiaoyi

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