Humble bean brews up a success story (2)

Starbucks said it has increased the quantity of coffee it buys from Yunnan by more than 20 times since 2007, when it first started purchasing the beans. The increasing purchase of Yunnan coffee is in pursuit of its aggressive expansion plan to have 1,500 outlets in China by 2015.

Following the increase in local sourcing, the two coffee giants both introduced new products boasting about their oriental origin.

Nestl said in January it is introducing a new instant coffee named after Pu'er that will go into production later this year.

Starbucks unveiled a coffee called "South of Clouds Blend" that comes in a package featuring a phoenix, a mythical bird that represents virtue and prosperity.

"With Pu'er coffee's delicacy, richness and original flavor, the new products will surely catch the attention of people who have a preference for fashion and quality," said Adrian Ho, senior vice-president of coffee and beverages at Nestl Greater China Region.

Nestl China's food and beverage sales have risen by a 16 percent compound annual growth rate since 2008, with coffee sales growing faster than that, said Roland Decorvet, head of Nestl China. China's per capita coffee consumption is only three to four cups a year compared with 240 worldwide. Nestl currently sells two out of every three cups of soluble coffee on the Chinese mainland.

China is now the fifth-biggest global coffee market for Nestl measured by sales. The Switzerland-based company said it expects the traditionally tea-drinking country to become its biggest market by 2020.

"With years of consumer education and effective marketing, the coffee market experienced a strong volume of growth in China, both for instant and fresh coffee. The boom in specialist coffee chains in major cities also helped cultivate a coffee-drinking habit, especially among young adults and office workers," said Euromonitor.

The surging demand for coffee beans, both in the instant and fresh markets, has led to more coffee plantations being cultivated in Pu'er. Rows of green coffee trees with their dark red beans dominate the hillsides around the city.