Organic Coffee Certification in China

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Organic coffees and teas are on the upswing in China. But it’s not all a walk in the park. There are still issues to tackle.

By Thomas Schmid

"China’s organic certification rules are inferior to corresponding international regulations.” “China-grown coffees frequently fail to gain western certification because they are unable to comply with the tough requirements.” These are arguments occasionally uttered in western coffee industry circles. But they are grounded in misconceptions, perhaps even some bias.

In fact, Chinese coffee growers find themselves in a very complex situation, the result of a slew of mutually compounding factors. Shirley Liu, general manager of Yunnan Volcafe Co. Ltd., calls it “a conundrum.”

Laborious to obtain, expensive to maintain

Although more costly “organic” products are not necessarily “high quality” – and vice versa. Soil conditions in many of China’s coffee-growing regions leave a lot to be desired. “Our soils cannot provide enough natural nutrition so organic coffees tend to have low yield and can suffer from poor visual appearance, which in turn reflects in the cup,” explained Liu. “Overseas and local roasters are reluctant to buy [Chinese] organic coffee for this reason, especially when there is a price premium on the coffee as well.”

Then there is the tremendous effort that is required to actually obtain organic certification locally or through internationally accredited organizations. Apart from extensive paperwork, organic certificates are an expensive, recurring investment for growers who must think twice before jumping through hoops in the current economy that has caused coffee prices to plummet.

In other words: Growing organic coffee is riskier than growing commercial grade. As a consequence, the number of certified organic producers in China is in decline. Some brand owners simply stopped marketing their coffee as organic, selling it instead at commercial coffee prices. Others continue to use organic practices but are not renewing certifications. And a few new organic brands are just appearing.

Specialty coffees may boost interest in organic product

The industry is far from its death throes. As demand drives planting of specialty coffee, locally developed varietals may eventually boost interest in Chinese organic coffee both at home and abroad. As always, taste and value are the deciding factors.

“But until then,” cautions Liu, “the use of potassium fertilizer by many growers rules out the widespread production of organic coffee [in China].”

In contrast, Chinese coffee exported to Australia is slowly building a following as a good-value washed arabica. As Australians prefer certified coffees, and as demand increases, there may materialize an expanding niche for organic products from China.

Andrew Mackay, general manager of Sydney-based importer, CofiCom, asserted that “a recent UTZ-certified Pu’er Premium AA from our Volcafe sister company is satisfying any request for certified Chinese coffee.”

 Meanwhile, in China, where coffee culture is relatively new, demand for organic coffee brands will be slower than in the traditional coffee-consuming markets. “It will probably be the next younger generation of Chinese coffee drinkers who are going to drive the growth of organic coffee here… if it is perceived to be healthier and has positive ‘green’ connotations,” explained Liu. Right now, she said, “it’s not yet economically viable to promote organic coffee in China.”

Raising customer awareness

A roaster that knows all about the ups and downs of Chinese organic produce is Kunming-based Man Lao River Coffee. While Man Lao River offers some full organic single origins, the company had to temporarily stop offering full organic blends because, according to its international advisor, Mark Respinger, “there wasn’t enough China-certified product of the high quality that we required in order to continue.”

“We are, however, working closely with our producers and are hopeful that this season we will be able to secure enough specialty grade organic coffee of the right quality and profile to restart those [temporarily suspended] product lines,” Respinger added. He also clarified that while China boasts many suppliers that produce organic coffee, it tends to “end up cupping too poorly to be used by Man Lao River.”

While Respinger has observed a growing move towards organic products in China, outside of Shanghai and Beijing he hasn’t seen it promoted on café menus. That, he said, made things difficult for China-certified coffees, as “end consumers may not be aware of and willing to pay extra for the organic crop.”

Proof of compliance is an Achilles’ heel

Are China’s organic certification standards indeed inferior to those adopted by the European Union, the US, Japan, and other international peers? Respinger wholeheartedly disagrees, in fact, he said, the opposite is true.

“China has some of the strictest organic certification standards in the world. So while it is easy to access USDA and EU certified product here [in China], not as many [local] coffee farms meet the requirements,” he wrote correspondence with STIR. Yet that has less to do with what requirements have to be met under Chinese regulations than with how that compliance is actually proved by way of documentation.

“In practice, the various standards amount to a similar level of protection against inorganic production, but the Chinese standard is regarded [among producers] as being the most onerous in terms of proof of compliance,” Respinger said.

The onus is on the producer

Application documents must be filed with the Accreditation Administration of the People’s Republic of China (CNCA), which then kicks off a surprisingly elaborate approval process.

In the opinion of Respinger, “this is a reaction to the complexity of the Chinese market. As you drill down to village farm practices, there are a lot of moving parts surrounding the dynamics of growers and processors, complex land ownership arrangements and leasing structures and the proximity of small holder plots that all make assessing the organic status of a crop so much more difficult.”

“By requiring more from applicants, CNCA is throwing more of the onus on the producer to prove that what they are doing truly fits the guidelines,” he said.

On the other side of the spectrum, international certification appears to be relatively easy by comparison.

“Because of the simpler process, and provided they plan to export, most applicants submit their USDA and EU certification processes first… and only then work on the additional requirements to meet the Chinese certification,” Respinger said.

“This allows for a more staged process in document production, rather than having to meet the more difficult Chinese requirements from the outset.” It is a sensible approach, too. After all, most foreign importers of organic coffee insist on full documentation; including organic produce from China.

“CofiCom doesn’t purchase certified coffee that doesn’t have validated documents prior to shipping. For organic coffees this means either USDA NOP (National Organic Program), NASAA (National Association for Sustainable Agriculture Australia) or similar plus ICO certificates of origin (ICO certificates are issued for every international shipment of coffee from producers to consumers (whether the importing country is an ICO member or not). The certificates are used to monitor the movement of coffee worldwide.

“Many of our roaster customers will also insist on copies of this documentation to support their marketing activities,” Mackay explained.

Where there’s a will, there’s a way

“Anecdotally, I haven’t heard of anyone failing to be accredited if they are really trying for it,” said Respinger. “If you are producing coffee in an organic way and can prove it, then the process generally goes smoothly.”

In situations where a certification lapses and is not renewed it is normally because the company internally decided to abandon it for reasons of cost or effort, he added. He reiterated that while categories are not mutually exclusive, organic coffee does not automatically guarantee high quality coffee.

“We see that, in the Chinese market, organic coffees normally sell for 15-20% extra compared to non-certified products. Given the amount of work that goes into obtaining and maintaining the certification, that premium is often not worth it.”

Respinger nevertheless predicts great things to happen, saying that at this time in China organic products are becoming increasingly popular and attract quite a price premium if and when they are differentiated properly.

“I think there is plenty of room to grow, but [the trend] will probably be led by organic coffee houses with a strong, easily distinguished value proposition that is evident to customers. We also see a growing number of home consumers specifically requesting our organic coffees when they order.” And once coffee escapes the prevailing price slump, Respinger said that he expects there will be “larger numbers of producers making the switch.”