Changzhou Entrepreneur Redefining China’s Coffee Industry

Chen Liang at the Cloud Coffee Factory

Via supcz.com

Article by Theresa Boersma 

Chen Liang and His Coffee Kingdom

Innovation doesn’t typically occur in beautiful places. It requires sweat and toil, and the freedom to get a little dirty on occasion. Tucked away in Changzhou’s central core, Cloud Coffee’s factory—the realm of Chen Liang, an innovator on the cutting edge of China’s coffee scene—is no exception.

A non-descript entrance under perpetual construction welcomes you to an equally nondescript factory park. There is much to suggest industry here but little more. That is, until you step inside. Beyond a modest product display and tinkerer’s lab, the centerpiece of the factory, a massive circular coffee bar steals the show. Behind it a huge, sunlit glass wall frames a spacious production floor teeming with roasters, toiling away on their own with minimal supervision.

Mr. Chen is—at least on paper—a man who roasts a lot of coffee beans. Much like his factory, Mr. Chen is quiet and unassuming on the approach. Once warmed up, however, he’s ready to brighten up the conversation with a quick wit and some self-deprecating humor. That lively spark only heats up when one of his unfinished machines poses a technical problem and the tools come out. Following Mr. Chen around his factory floor is a bit like following some movie-made mad scientist around a Hollywood blockbuster. At his command are a horde of automated roasting machines, toiling away at the command of an app on his phone that controls the exact blend and temperature of the final roasting.

Think of Cloud Coffee’s app as an opportunity to bring true customization to one’s cup of coffee. Instead of heading to a store or your local coffee shop and selecting from amidst an array of blends. Now, with the same ease that one can call up a car on Didi or Uber, it’s possible to select individual varieties of beans, control how they’re mixed together, and specify how hot and how long to roast them. The final result can be shipped straight to the customer’s door, just like a Tmall order. For coffee dependent businesses such as cafés and hotels, the ease of this system and the opportunity to create customized “house blends” are persuasive, but for the Chinese consumer, the system possesses the potential to redefine the nature of how coffee is consumed.

From The Beginning…

Mr. Chen became increasingly fascinated with roasting coffee beans, shortly after opening his first coffee shop 6 years ago, to the point that his café was described as a “coffee roasting studio”. For Mr. Chen, coffee beans had the advantage over customers that they were easier to deal with…to an extent.

The thing about coffee beans is that if you want to roast large quantities of them, you need some pretty special equipment. When Mr. Chen was looking to upgrade his first roasting machine, the machines with the best reputations—all imported—happened to start at 600,000RMB and go up from there. This proved a sizable hurdle for the young café owner. Still, the promise of roasting coffee beans, so he did what people who lack the resources to buy something have done for thousands of years.

Mr. Chen doesn’t have a technical background. The coffee shop was his first major endeavor after five years studying in Germany where he graduated with a business degree. He’d developed an interest in the bitter drink itself while studying abroad in Germany where coffee is consumed with a devotion to rival tea consumption in China. And while Mr. Chen had learned a great deal about the technicalities and complications involved in roasting beans, since opening his shop, when it came to building machines that could accomplish the task with regularity, he was starting from scratch.

So Mr. Chen took his inquiries to the internet. With the aid of online videos, he taught himself everything necessary—from circuitry to welding—to build his first roasting machine.

When asked how difficult this was, Mr. Chen gives a sheepish grin, “I electrocuted myself… a lot.”

China Meets Coffee

What kind of insanity would lead a bright, quiet young man to literally risk life and limb in the pursuit of cooking the beans of an exotic plant from Africa? Better known for its tea culture than its coffee culture, China does not seem an intuitive starting point for someone intent on revolutionizing how we buy our coffee.

On paper, the numbers suggest China’s barely dipped its toes into the world of coffee. The International Coffee Organization reports the average Chinese person consumes approximately 6 cups of coffee per year. Historically, 98% percent of that consumption has been via instant 3-in-1 (coffee+sugar+creamer) coffee powder; the kind served up at hostels and dug out of the back of factory cupboards when a foreign consultant comes to visit.

Despite this, China is already one of the top producers and consumers of coffee in the world. Yunnan province has been growing coffee since the crop was introduced in 1892 by a French missionary, although production didn’t scale up dramatically until around 2008. Now, China is one of the world’s top exporters of Arabica beans, shipping out more each year than Kenya and Tanzania combined. On the consumption end, the Chinese coffee market is already bigger than Australia, and boasts a 16% year-on-year growth even in the face of a slowing economy that has been putting the brakes on other domestic industries. For a story last year for the BBC, Shaun Rein at China Market Research Group in Shanghai said, “China’s thirst for coffee will totally change supply chains globally.” It is this change that Mr. Chen seems poised to head up.

The Genius in the Madness

Mr. Chen’s first coffee roaster opened up a world of possibilities. It wasn’t long before he was taking orders for roasting machines in addition to selling his beans. Business grew and evolved, and soon he’d divested himself of the café completely and moved shop into a full-fledged factory. He became increasingly interested in improving the roasting process through automation, which in turn led him to take a hard look at another backbone of the coffee preparation process, the coffee machine.

A trendy subset of the coffee machine, the coffee capsule machine, had recently hit the Chinese market with a consumer-friendly simplicity that intrigued Mr. Chen. Capsule machines take small single serving containers of coffee as their input to produce cups of coffee individually. The process tends to be considerably faster than batch brewing, and the coffee in the capsules stays fresher longer because it is only exposed to air the first time it is used. When Mr. Chen began eyeing coffee capsule machines as a viable branch for his coffee company, the machines and capsule brands available in China all tended to originate in Europe.

The modern world may move at digital speeds, but freighters still take weeks and even months to carry cargo between continents. While this isn’t the end of the world when the cargo is steel and plastic, it’s not an ideal situation for perishables, such as coffee. A coffee capsule from Europe might be 6 months old by the time it hits supermarket shelves. Mr. Chen had every reason to believe a home-brewed coffee capsule machine—along with the accompanying capsules—could produce better results in terms of fresher coffee, so he rolled up his sleeves again and went back into the workshop to reengineer a coffee capsule machine from scratch.

Mr. Chen’s coffee capsule machines are now available in his Tmall store alongside his company’s various coffee offerings. The wiley inventor has an aversion to big box stores and supermarkets, preferring to control as much of the marketing and distribution chain himself as possible. It’s a similar tactic to those adopted by many larger, well-known corporations across varying industries and has become more common since the beginning of internet era with information-powered consumers and one-click ordering wreaking havoc on the traditional benefit of location offered by “brick and mortar” stores.

Educating The Masses

Waving a hand at the gargantuan multi-ton roasting machines lining his shop floor, Mr. Chen sighs, “I want all this to be completely automated.” As if on queue, the room echoes with the sound of beans rumbling down a pipe from an attic storage compartment, where they’re routed into the holding cell of a waiting roaster. When finished, another tube will guide the roasted beans to the next stage in their preparation cycle.

One curious thing becomes very apparent about Mr. Chen after talking to him for a while. He’s not wild about dealing with people. While one theme of his business adventures revolves around solving a problem that needs a solution (usually with grease and circuitry), the second major theme is the burning desire to minimize his interactions with other humans. It’s this desire that led him away from the café business and into roasting, and it’s also this that inspires his increasingly complicated explorations into automation in the name of simplifying crafted coffee.

Mr. Chen holds eight patents for his inventions. One of his more recent ones is his coffee app which has the potential to open up the wide world of coffee flavors to any internet-savvy customer with a smartphone. The challenge, however, is those very same customers. How do you turn instant coffee drinkers into customized coffee connoisseurs? Ironically, automation-loving Mr. Chen is banking on the power of people to do just that with a planned Shanghai-based coffee showroom.

Cloud Coffee’s Shanghai showroom will emphasize workshops and coffee tastings—the goal being to introduce people to excellent cups of coffee and the details necessary to produce them.

Cloud Coffee’s Shanghai showroom will emphasize workshops and coffee tastings—the goal being to introduce people to excellent cups of coffee and the details necessary to produce them.

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