On September 18th, located in Kunshan, the China Coffee Innovation Industrial Park, Starbucks’ largest strategic investment in production outside of the United States, officially went into production.
In this world-class roasting factory, I was invited to learn about the “invisible power” behind Starbucks through an immersive experience, and gained a new understanding of a cup of coffee that is as good as the one in every store.
For China’s coffee, which is on the rise and aims to go global, how the global coffee industry chain is laid out and constructed may be closely related to every practitioner.
A total investment of 1.5 billion industrial park
What changes will be brought to Starbucks?
Following the Shenzhen Innovation and Technology Center, Starbucks China has invested 1.5 billion in another project: the China Coffee Innovation and Coffee Industrial Park (hereinafter referred to as the Industrial Park), which is officially put into production.
If the Innovation Center is Starbucks China’s layout for exploring the “future of coffee”, then the Industrial Park is Starbucks China’s key initiative to improve coffee quality and operational efficiency.
Let’s start with the overall layout of the Industrial Park.
This is the industrial park invested by Starbucks China in March 2020, covering a total area of about 80,000 square meters, the core body is divided into “coffee roasting factory, integrated logistics center, coffee journey experience center” three major plates, the functions of which cover the importation of coffee beans, roasting, packaging, storage, logistics, and to provide coffee-themed tours, It also provides coffee-themed tours, coffee-related training, etc.
This industrial park is of great significance to Starbucks China.
Wang Jingying, Chairman and CEO of Starbucks China, said, “The industrial park completes the scaling up of our vertical supply chain from raw beans to coffee in China, and refreshes the benchmark for sustainable development of China’s coffee industry.”
To extract the key information from the site: the beans roasted in the future industrial park will be shipped to more than 200 cities and 6,500 stores nationwide through an integrated logistics center.
In short, for consumers, the beans in future Starbucks stores in China will be fresher, and the localization of coffee blending in the industrial park will bring the flavor of coffee closer to the needs of Chinese consumers.
For Starbucks internally, the significant shortening of the transportation radius, stores will be able to realize small batch reporting and high frequency distribution, allowing for a more efficient turnover of raw materials, lower operating costs and store losses, and improved coffee quality.
Most importantly, Starbucks has completed a complete vertical supply chain in China, and with the help of digitization, it will be closer to consumers from the planting end, the processing end to the store end, and will be able to gain better insights into China’s fast-changing consumer trends.
China is the first market in the world where Starbucks has realized a complete industrial chain, which is a milestone event in Starbucks’ global supply chain layout. For China’s coffee industry, this immersive industrial park with multi-dimensional experience also brings new enlightenment to the industrial chain layout of domestic brands –
Picture from bean to cup
Coffee industry chain “sampling”
The production of the industrial park, for Starbucks China, in a single market to take the lead in the completion of the whole industry chain from “planting, purchasing, blending, roasting, distribution, store presentation, talent training” of the seven links, but also for the whole industry chain layout of domestic coffee to establish a benchmark. This is the first enlightenment brought by the industrial park.
Among them, there are several achievements that must be mentioned.
The first one is coffee blending, roasting and distribution. The commissioning of the industrial park formally makes up for these three links in the industry chain, customizing coffee blending and roasting solutions for the Chinese market and responding to customers’ needs with greater agility.
The second is the construction of a coffee grower support center. As early as 2012, Starbucks established a “Coffee Grower Support Center” in Yunnan to bring Yunnan coffee to the wider world.
In the industrial park I saw that Starbucks has established a total of 10 coffee grower support centers in the three major producing regions of Latin America, Asia and Asia-Pacific. Countless agronomists are rooted in the production areas to help coffee farmers grow better quality coffee.
The third is the construction of a huge procurement network, Starbucks from more than 30 countries and regions, including China, 500,000 coffee farmers in-depth cooperation, the establishment of a global coffee bean procurement network, which is crucial to a cup of coffee “ten thousand stores as one”.
Fourthly, I was surprised to see that Starbucks takes talents as an important link in the whole industry chain. Starbucks’ partner culture not only cultivates talents for its own industry chain, but also once became the “Whampoa Military Academy” of the domestic coffee industry, which conveys a large number of professional talents.
Picture of a cup of coffee “humanistic connection”.
In addition to customers and partners, there is a new dimension.
Secondly, I would like to talk about Starbucks’ “humanistic connection”.
At the event in the industrial park, Starbucks Global CEO Mr. Nasir Hammonds said, “The world around us has a creeping sense of loneliness, and coffee is a way to connect people across cultures. We focus on every cup of coffee, every conversation, and every community to inspire the infinite possibilities of human connection.”
In the past, I have seen and understood that there are two levels of humanistic connection, one is to be a humanistic connection with customers externally, and the other is to be a humanistic connection with partners internally.
However, during my visit to the industrial park, I gained a deeper understanding of human connection:
I saw Starbucks’ concept of “open source agriculture”, which develops higher yielding, disease-resistant tree species and opens them up for free for use in major producing regions around the world, and has already shared 90 million new coffee seedlings around the world.
There is also “ethical sourcing”, from the prohibition of child labor, to whether the supplier has given the grower a sufficiently transparent amount of money in each transaction, to whether there is gender and racial discrimination, to how to deal with the wastewater generated in the coffee processing process, “ethical sourcing” norms The Ethical Sourcing Code contains nearly 150 individual indicators.
I felt that the human connection is not a slogan, and not only for customers and employees, but also for the care and empathy of each participant in the chain.
From planting to production, from stores to customers, from business to environmental friendliness, the sincere communication and win-win layout of each other in an industrial chain is the ultimate humanistic connection of a cup of coffee, and the real sustainable long-termism of the whole coffee industry chain.
From “factory” to “landscape” in the picture
is the reference direction for the development of the coffee industry chain.
Thirdly, I would like to talk about the transformation of the supply chain from “factory” to “landscape”.
In the past, the industry’s attitude towards its own supply chain was very conservative.
But now it’s different, the tea industry’s 10,000-store supply chain big shot international, in 2022, took the 4A industrial tourism scenic spot license, becoming one of the local well-known business landscape.
This time the industrial park, is Starbucks China’s first coffee-themed immersive experience center, through more than 10 carefully designed experience points, plans to build a “coffee as a medium to promote experience upgrading, to create a new business card for the country’s industrial tourism”.
I learned on site that “in the near future, a few Gold Star members will have the opportunity to make reservations in advance to experience the experience center on the spot”.
It is foreseeable that this industrial park may be another popular “coffee landscape” after Shanghai Roastery.
To make a cup of “earth-friendly” coffee
is the responsibility of every practitioner
As the domestic beverage industry becomes more and more aware of environmental protection, Starbucks’ philosophy of “giving back to the environment more than we use it” will become an important reference index for coffee brands to build their supply chains.
I learned that the industrial park is Starbucks’ greenest roasting facility in the world, designed and built in accordance with international LEED Platinum and China’s three-star green building certification standards, covering both international and Chinese cutting-edge sustainable practices.
Sustainable concepts permeate every aspect of the industrial park’s design, construction, and operation. For example, over 26,000 square meters of solar photovoltaic panels have been laid in the park, providing 20% of its energy. In addition, the park is expected to recycle up to 90% of its waste annually.
Environmental protection is not a slogan, but a responsibility and commitment that every brand that wants to represent China in the world must have.
Going overseas is one of the hot topics in the beverage industry this year.
Coffee to the sea, this year, there are many brands have been eager to try, some brands in foreign countries to open the first store, there are brands have been overseas markets as an important market.
As Nasheim said, “To dream, is to dream big”.
Chinese coffee to the world, is not a false statement.
But going to sea is not a whim, nor is it just to open the store out, but to establish a set of industrial chain system for the global market, to stabilize and sustainably export products and brands. In this process, it is necessary to realize the multi-win situation in the industry chain.
Starbucks coffee innovation industrial park, or the future of China’s coffee to the world “an important lesson”.