“Bu, bu, bu!” the Dunkin’ Donuts clerk responded with slight irritation, explaining how coffee is made. “You have to grind it before you brew it. You can’t just pop a few beans in a cup and pour boiling water over them. Coffee isn’t the same as tea!” It was only nine in the morning, and instead of a long line of eager customers, the clerk was tied to this one clueless pest. “Tai mafan,” the pest finally replied. “Why even bother with this Western drink? I’ll stick with tea.” He walked out the door, empty-handed.
By 1994, practically every large chain in America was salivating at the prospects of the Chinese market, and Dunkin’ Donuts was no exception. The image of over a billion customers with increasing wealth was enough to put rings of ka-ching into the head of any CEO. But some, like Dunkin’ Donuts, would find themselves contesting with China’s old loves. In this case, tea.
For centuries, tea has quenched the thirst of China. Tea culture isn’t just deeply rooted, it’s part of the earth here. The joys of drinking it were extolled by poets of the Tang Dynasty, proverbs classify it as one of seven basic necessities of life. Every time you enter a Chinese home, tea is automatically offered as a sign of respect. Whether it’s flavorful hua cha (flower tea) or mellow lu cha (green tea), the fact remains: China is a nation of tea.
Coffee, in comparison, is just an infant in China. It was a little over a hundred years ago when a French priest introduced coffee to southern China’s Yunnan Province. It briefly caught the attention of the bustling city of Shanghai during the 1930s, but the long war and revolution that followed left it a drink fit only for Westerners. It returned briefly in the mid-1960s when the government, encouraged by coffee’s cash crop opportunities, cultivated thousands of hectares of coffee crops, again in Yunnan. The quality of the coffee was lacking, it failed to sell, and the effort was abandoned.
In the 80s, there was a third attempt. The world’s largest food company, Nestlé, introduced instant coffee to China. They cultivated, again, thousands of hectares of coffee crops in Yunnan Province. And again, it failed. Finally, after two false starts, Nestlé’s Nescafe gave coffee a solid foothold in China.
In 1994, the second largest coffee chain in the world decided to ake a stab at the Chinese market. Dunkin’ Donuts’s executives were convinced that Nestlé’s success would translate into their own. The vision was simple enough: to bring a fresh cup of joe to the masses of Chinese customers yearning for something new. Too bad it didn’t work out.
In America, a dark, hot cup of joe is an everyday, everyman drink. In China, that’s tea. And while Western coffee culture means blends, and tastes, and brewing techniques, Chinese coffee culture does not. In China, it’s a symbol of lifestyle. It means young, hip, wealthy, and able to afford. Able to be visibly part of the emerging middle class. Long story short: tea is for the traditional, and coffee, the connoisseur.
When Chinese customers visit coffee houses, they expect to be pampered. They want an experience, not just a cup of brown. “I enjoy going to a café,” said one Beijing Starbucks customer I asked, “because it’s fashionable and comfortable. I really like that I can sit down and talk with friends in a good atmosphere.”
But Dunkin’ Donuts didn’t realize this. Their stores were clones of those in America. Management may have thought it was a great way to bring America to China, but the Chinese weren’t impressed. Why spend hard-earned cash on coffee when the tables were cheap, dirty, and plastic? Does the quality of the product matter when you wouldn’t be caught dead in the shop?
Five years, and a pile of poor investments later, Dunkin’ Donuts fled China with its Bavarian Kreme tail tucked firmly between its roly-poly legs. So much for turning the Chinese into daily coffee drinkers.
About the same time the double D was shutting their China doors, another American coffee shop, Starbucks, was making a well-informed arrival. In-tune with the culture and desires of the Chinese customers, Seattle’s legends were more likely to succeed. “China is different,” spokesperson Caren Li told me, starting bluntly. “Besides quality coffee, you have to provide a first-class environment in which Chinese people can sit and enjoy themselves.” That much we knew. But more to the point, she continued, “You also have to listen to their needs.” Starbucks didn’t replicate their USA menu, slat-board by plastic slat-board, but instead catered it to the community. Red bean pastries, green tea mochas, iced coffee with black jelly cubes. Obviously, these treats wouldn’t keep the baristas too busy at a Starbucks in Bowling Green, Kentucky. But in China? They’re a hit.
Over the next few years, the Chinese are expected to up their intake of coffee by 15 percent a year. Which sounds, at first, like one heck of a buzz, but it’s not because coffee is turning into a daily necessity. Instead, it’s because of how fashionable lounging in a café has become. “Coffee culture is still developing in China,” explained Li, “We want to educate our customers. Hopefully, they can learn to appreciate our coffee, instead of just our atmosphere.” Starbucks is doing its best to tackle this bull by holding coffee seminars, tastings, and classes at its stores. Java-tutors explain the way it’s made, why it’s so good, and how to taste that subtle difference in blends and brews. In a Beijing store, I recently watched a handful of customers sniffing and sipping at espressos under the careful tutelage of a Starbucks master. I was impressed (with both the class, and my dry Grande cappuccino. Oh, it was good.)
But Starbucks isn’t the only player educating China about coffee. Two years ago, lecturer Qi Ming opened his own coffee school in downtown Beijing. But Blend Coffee College doesn’t teach customers how to tell if a roast is from Uganda or Peru. Instead it divulges the secrets of coffee culture to cash-register-eyed businessmen. “If Chinese want to enjoy coffee, it’s really important to teach them how to correctly blend, roast, and deliver it,” Qi said with a smile. The next generation of coffee shop owners are signing up for his classes, with dreams of locally-owned chains for local consumers.
Starbucks is aware of the opportunity they’re fighting for. “We are committed to the Chinese market because we see huge potential here. In the future we see it as our second biggest market,” Li explained. Only the second biggest? Yes, “behind the US.”
The Starbucks story is as much of a model for Chinese success as DD’s is a warning. If you want to be a hit in China, then you need to understand the culture, the desires, and the demands of Chinese customers. They’re not Americans. They don’t want what you want. Even when it’s thick, black, heavenly joe to go.
One issue we’ve forgotten to touch, though, is the dark specter of tea. Can coffee unseat the master that’s held the country for millennia and more? “No,” Li threw out, quickly. “Our business in China can never do that. We just want to offer our customers a wider variety of choices.” In the end such a stance is wise. It should never be forgotten that China is a nation of tea drinkers.
And thus, Starbucks sells Tazo.
- One large latte please.
- I’m wired on coffee.