Playwright in Beijing - A Little Bit Of Coffee Culture

Playwright in Beijing

(Frank Gagliano, China Journal）

……

And will the Chinese audiences gasp, as I did, when Joe first mentioned the idea over coffee and goodies at the Paradiso Coffee?

PARADISO

-- and over cigarettes, of course. Joe is a smoker. And smoking is allowed in the Paradiso Coffee. (Smoking is allowed in all restaurants in China)

The Paradiso Coffee is a student hang out on the campus of Peking University, located under the Centennial Hall. The Centennial Hall is a huge building with an imposing square in front of it and houses two theatre spaces, one with 2,167 seats and a smaller 300-seat house.

You enter the Paradiso Coffee by going round the back of the Centennial Hall and down an outside flight of steps. When you go through the doors, the Coffee is on the left; on the right is a steep staircase going further down to an even lower-level restaurant --just one of many restaurants on the campus.

By the time I return to the US, I will have eaten excellent full-out Chinese meals at six restaurants on campus; there are at least twice, or maybe three times, that many non-fast food, major eating establishments on the Peking U campus, that cater to even nonstudents in the area.

The Paradiso Coffee is a large Starbucks-styled space (with un-Starbucks-styled cheaper, per-cup, prices). As you enter the Paradiso Coffee you spot the coffee bar at the other end of the room.

Clean, warm atmosphere.

Simple, clean-lined furniture; small, round, blond, wood-like plastic topped tables and chairs, for the most part; some booths; some stuffed, dark-covered arm chairs; to the right, the room, with more tables and chairs, extends farther back; some food cases with pastries, sandwiches, snacks; the coffees range from an "Americano" to a latte to a Cappuccino to an Ethiopian blend I tend to favor; teas, cold drinks.

There are posters on the wall of the Italian film classic, Cinema Paradiso. Also, enlarged poster-sized photos of New York scenes are prominently featured on the walls near the large windows, where you can see the feet of outside passersby; one of the posters has a New York scene with the twin towers still standing.

The music loops are constantly playing and filling the room's atmosphere with vocal and instrumental music that ranges from rock to pop to easy Llstening to Chinese pop to old-time jazz, to classical, to foreign artists, including my favorites, Jacques Brel and Edith Piaf. The music is always a little too loud.

Two baristas, Cindy and Tiantian run the place, augmented by two boys (baristos?). Sweet Cindy seems to be in charge (more about her later).

Chinese students, foreign students, campus visitors, sit alone, studying, working on their computers or putting tables together to socialize, study in groups and often, each coffee drinker is on the "Ubiquitous," cell-phoning or text-messaging away; the ring-tone music always cutting through the music in the Paradiso ether, no matter how high the canned-music's volume. Many students can be seen sleeping over their books or laptops, or curled up on the stuffed chairs or sofas, scattered about.

On occasion, The Paradiso is used for a magazine photo shoot or a shoot for a television series.

Often there's some Young-Love kneeing and canoodling going on in some of the corner booths.

There is always time to appreciate the stunning Chinese student beauties making their Paradiso entrances and exits.

Listen to the foreign students, from all over the world, studying the Chinese language, as they sit, talk and create an interesting music of their own; and as they mingle and counterpoint their native languages with the four tones of the fiendishly difficult Chinese.

Lots of one-on-one goings-on; of language-coaching and group reviewing for test preparations.

The Paradiso Coffee is comparatively new on campus this semester and is not open during the winter "Year-Of-The-Pig" holiday-week when I arrive in February. (That's why Joe Graves and I meet at a Starbucks off campus, that first holiday week). By the time I leave to return to the States, the Paradiso Coffee becomes the place to meet. Eventually, I will have an all-day meeting at the Paradiso with each playwriting student.

A little taste of Coffee culture for me.

Just about every morning I meet with Joe at the Paradiso Coffee. The weeks he needs to go to Macau and Taiwan to lecture and perform his one-man show, RAVEL'S SHAKESPEARE, leave a morning-routine hole in my Peking U life (my wife will join me for the last month at PKU).

The talk ranges from the work on BIG SUR and the maddening Peking U obstacles that often derail a rehearsal to problems I'm confronting in my adult conversation classes, to sharing with him the tongue twisters I'm developing for those same classes, to talking American politics and how surreal all that seems to viewing Bush-era madness from China, to making arrangements with Qing to get acupuncture when my lower back starts spasm-ing, to a lot of smutty Graves/Gagliano sophomoric talk from two aging fantasizing sybarites -- and to stopping whatever we're doing to chat with the passersby who stop by our table.

In the five years Joe Graves has been the Artistic Director of the Beijing Institute of World Theatre and Film, he has cast many students in his productions. His first casting call elicited 4000 requests to audition -- that's right, 4000 (for his production of Gozzi's, The King Stag)! The students adore Joe and seek him out, whenever they can. Jane, for example, stops by our table. Jane is a graduate PhD student (lovely, charming, sweet, studying the Linguistics of Character Development in Drama). Her spoken English is perfect. Joe embarrasses her by praising her acting ability.

Jane lives some distance from the Peking U campus, so, when she arrives daily on campus, she sets up office in the Paradiso Coffee and can be found there, laptop before her, whenever she is not in class. For most of the term Jane is feverishly preparing for an important examination. I will discover that most students will prepare for important examinations while I'm there (like, every week, it seems), and this will make life difficult for our BIG SUR rehearsal schedules.

Jane introduces me to the world of linguistics, where theories on drama and dramatic character (Jane's linguistics' focus) seem to dovetail with mine. I invite Jane to attend my playwriting class, if she has the time.

I am beginning to understand in more depth the lure of the Coffee House centers of creative camaraderie that were often the centers of artistic and political and social life in Fin De Siècle (and early 20^th Century) Vienna and Paris and Berlin and Prague. Would I, while I'm at Peking U, hold court while chairing an all-day-long table, where a Chinese Picasso, or a Chinese Cocteau, or a Chinese Gustav Klimt, or a Chinese Arthur Schnitzler, or a Chinese Madam Alma Mahler – with five of her current lovers perhaps -- pulling up chairs, regularly stop by and, over an Ethiopian brew, rage with me against whatever Establishment shackles are currently crushing our creative balls?

I'll tell you this: Before heading for China I had become a tea drinker back in the good old US of A -- mainly English Breakfast tea with milk and "Splenda" sugar substitute. At Peking U, in Paradiso, I've become a coffee drinker again.

Reverse Wrongful Coffee Image and Stimulate Consumption In China

This article was written for International Coffee Organization in 2004 in order for ICO to take appropriate coffee promotion in China.  After six years, it has still been true and unchanged.   If international companies and China’s domestic entrepreneurs do not take necessary steps to understand this market, it may take much longer for coffee to popularize and everybody will fight harder in a very slow growing and small market.

FACTS:  Relevant information

One important scenario has to be pointed out – European and North American countries have popularized coffee differently from East Asian region.  In 17^th century, English called coffee houses “Penny Universities”, which unfolds the underlining characters of coffee: Inexpensive and Brain Stimulating.  Coffee houses were social integral places for all classes.  When Nestle, Starbucks, espresso drinks, TV ads and brand marketing were basically non-existing, coffee had conquered one country after another just because of its natural characters.  In Europe and North America, coffee played an important part to their economic growth and coffee houses gave the birth to the first stock market and insurance company.  In East Asian countries, the same phenomena, which repeated so many times in history, never happen.  Instead to play as a social integrator, coffee houses with its high prices, unavoidably served as a social divider in Asian countries. 

Coffee Business has been staggered in China

1. Historical low price of green coffee bean does not benefit Chinese consumers. High retail price has suffocated China’s coffee market growth. 
2. Fundamental misperception about coffee and opaque marketplace in China causes a huge price hike from green coffee bean to retail vendors. 
3. 5% of highest income class and foreigners are over-exploited and spoiled by coffee shops when majority of consumers are left out.
4. Surreal coffee market boom: high public profile, slow growth and low market share in beverages market.
5. International and domestic coffee farmers, Chinese consumers and China’s coffee businesses are all suffering from high retail price.

Coffee’s Identity Crisis in China – “COFFEE IS FOR LUXURY LIFE STYLE”

There is a widely accepted view about Coffee among Chinese, that is coffee is for luxury life style.  This is a misperception and has direct impact on both China’s coffee business community and its consumer groups.  Because of the misperception, business community cannot identify who their customers are and thus fails to develop workable coffee business models and effective marketing strategies.  In turn, it unintentionally denies the vast majority of consumers the opportunity to acquaintance with coffee.

Started with Japan, the earliest and still most developed Asian country, coffee has been distorted as luxury drink with its unreasonably high prices.  It takes Japan near 90 years to popularize coffee when still low in per capita consumption among coffee bean importing countries.  Japan is the look-up guy in Asia and sets the trend to its neighbors especially to its former colonies such as Taiwan and South Korea.  Taiwanese are the major investors on coffee house chains in China, such as Starbucks and Shang Dao Coffee. 

Coffee is marked with high price and branded as luxury in everywhere in China. 

Surreal Coffee Boom in China When Chinese Cannot Afford Coffee

Starbucks and blossom of new coffee shops in China’s major cities creates a surreal impression of coffee boom.  There are new coffee shops opening in Beijing and Shanghai everyday.  Nevertheless, almost all coffee shops fight for 5% of highest income class and foreigners in a few major cities.  There is a market vacuum for 95% consumers.  Green coffee bean import has been on decline in recent years based on ICO data.

Average Chinese cannot afford a cup of smallest size coffee at coffee house per day.  For instance, Starbucks Beijing prices small size coffee (8oz) for RMB 12 yuan, which is equal to US$1.5 (same as sold USA).  When average Chinese urban income is RMB 8000 yuan per year, 55% of salary would be spent to drink a small cup of coffee per day.  The income in Beijing and Shanghai are higher than average but still not even close to afford it.  A typical Beijing taxi driver has average gross monthly income of RMB 2000 yuan and a Starbucks barista makes RMB 1000 yuan.  Although Starbucks by no means is the most expensive coffee house in China and give slight higher salary than its competitors, we can be sure that Starbucks’ barista cannot afford Starbucks coffee.

Maybe China has 1 billion people; maybe Beijing and Shanghai alone have more than 30 millions in population; maybe China’s economy is growing fast; maybe there are more than 5 coffee shops opening in Beijing and Shanghai everyday; maybe China is the biggest potential coffee importer, but the truth is that majority of Chinese just cannot afford a cup of coffee everyday.  If the situation continues, it will also take China 90 years to popularize coffee.

Leadership Vacuum in Coffee Business Community

So far, international coffee companies have difficulty to develop China’s coffee market and are unlikely to provide leadership and direction either.  With more than 300 years of coffee history, western coffee giants know better how to gain more market share in a mature and coffee-drinking society than to develop an immature one.  They know better about marketing than coffee.

As the first major player in China, Nestle owns soluble coffee market.  Nestle has produced popular TV and media ads by targeting at a group of so-called ‘young middle class Chinese’.  However, that class of Chinese basically never exists and in reality if they would exist, these healthy neat family-oriented young Chinese couples couldn’t be possible to be the hardcore coffee drinkers either.  Without understanding the true characters of coffee and China, any kinds of campaigns may generate a lot of buzz with little effects.  In addition, without coffee shops and other means to start people drinking coffee, it is really hard for soluble coffee to expand its market.  Considering how many years for soluble coffee to win Japanese market, do we all want to wait for that long for China’s market?

Starbucks has increased the awareness of coffee house more than anyone else in China and in the world.  By providing better quality and environment, Starbucks has a good reason to hit big in USA, but requires a different strategy for China’s market, something that KFC has done quiet successfully in China.  As a trendsetter, Starbucks would also do more harm than anyone else.  Starbucks Beijing may never make much of money for years, and Starbucks Shanghai’s success is hardly exemplary and sustainable.  Its strength is in management, brand name and financial mightiness.  However, for a primary market like China, a little bit entrepreneurship is critical to advance the market.

International Coffee Organization had done generic coffee promotion in China in 1997-2001.  Nevertheless, coffee festivals and design and fashion award hardly worked because the consumers didn’t understand the drink and couldn’t afford coffee at the first place.  Concerts, festivals and award even in the name of coffee diverted the focus from coffee to, again, life style.  In addition, these expensive concerts and fashion awards just reaffirmed the misperception of coffee and luxury life style.  History shows the grass-root is always the best way to popularize coffee.  Chinese won’t start to drink coffee because Vanessa Mae or any acclaimed celebrities drinks or endorses coffee.

Local coffee business community is loose, sporadic and directionless in China.  Although there are many entrepreneurs, it is difficult for them to identify market when market itself is quiet muddy.  Coffee shops dilute coffee business by adding too many side businesses such as foods, fruit plates, spirits, music band, ultimately luxury environments and so on.  They are in bad need for knowledge and information about coffee and also need business guidance and substantial helps to develop their own coffee business models.  It is absolutely critical to realize that the local Chinese business community knows the market better than anyone else.  Once if they find ways to win rest of 95% consumers into coffee, it can definitely set a new record of coffee consumption worldwide.

Coffee and Coffee House

Coffee is a SPEICAL drink.  It stimulates people’s brain so to be more focused, excited and creative, extends their working hours and doesn’t hurt people’s health at the same time, not to mentioning it tastes bitterly sweet and smells like heaven.  Coffee is also quite inexpensive when coffee farmers have been on the verge of bankruptcy for years because of low green coffee bean price.  In addition, coffee is an addictive drink, which keeps loyal consumers.  Based on first hand observation and research, whoever has chance to drink coffee 3 times a week for two continuous months is addicted to coffee.

All in all, the economic trend since 400 years ago shows that the maximizing brain utilization becomes important to develop personal wealth and intelligent.  History also shows ‘inexpensive’ coffee stimulates the brain; the active brain creates wealth and the wealthy people drink coffee.  East Asians and even some international coffee giants may forget history and take the coffee cycle backward.

Coffee’s popularization has always been grass-root.  Coffee house, since early in the history, has served the purpose to promote coffee.  Before consumers are accustomed with coffee and move onto soluble or ground coffee, they need get chance to drink and feel the effects of the coffee.   All coffee cultures gain momentum from coffee shops.  Once momentum is generated, the market can grows like snowball rolling down from mountain.  Coffee shop can be seated place or just coffee carts and stands.  The point is to let people start to drink coffee, which cannot be done by soluble or ground coffee.

Coffee is a special drink with special effects on human body that play important parts on today’s society.

China’s Consumers Are Ready For Coffee

Tea has become a scapegoat for unsuccessful coffee promotion in China.  It is heard so often that ‘China is a traditional tea country and coffee has no market here’.  During 80’ and 90’s in China, the first group of coffee shops was born to meet the needs of foreigners living in China (normally they are richer than Chinese).  Coffee shop business has since evolved around foreigners and Chinese new riches.  Ordinary Chinese basically have no chance to enjoy all the benefits of coffee and coffee house.  Soluble coffee is really not something to start coffee drinking habit. 

A study has done on China’s illegal immigrants working in construction sector in the United States.  Most of these constructors are poorly educated and born in the peasantry.  The study results show that a majority of construction workers are faithful coffee drinkers and add less milk to coffee everyday.  Chinese today are as acceptable to coffee as Europeans 400 years ago or Arabians 500 years ago. 

In China, there are no marketing campaigns from tea industry; there are no dominant tea companies to rival with international coffee giants such as Nestle and Starbucks and there is nobody fighting in the name of saving tea from coffee invasion.  Everyone says coffee and coffee house are good thing to happen.  One of the best excuses for people who cannot afford coffee house is coffee may be harmful for the health.

 

Snowball effect

The best coffee promotion is to let people drink coffee and more coffee.  Anyone who drinks coffee more than 3 times a week for 2 continuous months wins the ticket to coffee club.  Therefore, coffee shop openings and intense marketing have to be around the places where the same group of people will revisit everyday such as universities, office buildings and so on.  This can bring the marketing and promotion to the best result.  When one WHOLE group of people becomes loyal to coffee, the snowball is formed and rolling down the mountain to expand its own consumer groups. 

Coffee already has a high profile in China.  Measurable and pinpointed generic promotions in harmony with private sector’s marketing campaigns will effectively increase public awareness and, more importantly, consumption. If any companies can adopt more direct, continuous, measurable and detail-driven promotions on specific group of consumers, another beautiful coffee story will be born in China.  

China’s Coffee Market: Waiting for the Tipping Point or Pushing for it

(Paul Wang, hwang35388@gmail.com)


Average Chinese drinks 2 cups of coffee per year, which means majority of Chinese almost never drink coffee since over 3 million of foreigners in China is the major clientele of coffee consumption.

In 2009, China’s per capita coffee consumption is less than 0.02 kg, and less than 0.035 kg for its metropolitan demography, in contrast with the US’s 4 kg, Japan’s 3.5 kg, Korea’s 1.5 kg, and Russia’s 1.5 kg.  Any medium size roaster in the US would roast more coffee than the entire consumption of China today.  The tipping point for China’s coffee popularization has yet to be reached due to its economic and political factors and also due to the lack of unconventional thinking in coffee promotion and strategies by most of players.

Coffee Popularization Pattern in Asia

The evolving pattern of China’s coffee market is, by and large, following the footsteps of its Asian predecessors, Japan, Korea and Taiwan.  Historically, for the US and most of western countries, coffee popularization was always a grass-root movement, evolved side-by-side with political changes and economic development. For many occasions, coffee houses were the birth place to business invention, political movement and new science.

On the contrary to their western counterparts, the maturing process of Asian countries’ coffee-market is always couple steps beyond their economic development. In the time before the tipping point, the coffee consumption was led by foreigners, and coffee house was served as leisure cafe by the local elites, the rich and the foreigners.  The most notable characteristic of this type of coffee market is that it has very high coffee price in their coffee house, which happened to Japan half century ago, and is happening in China now.  For a medium size black coffee (12oz), the average price in China is sold 2.2 dollars, which is more than the average in the US, when per capita GDP in China is only one tenth in the US.

A Phenomenon: Always a Tipping Point for Coffee Consumption Growth in Asia

In Asian countries, at least in the past 100 years, the coffee consumption growth would be standstill for decades, and then in a sudden, the coffee consumption starts to fly.

The tipping point of Japan’s coffee consumption happened in the late 1960’s.    Between 1965 and 1980, Japan’s annual coffee import jumped by 6 folds[1]; soluble coffee led the consumption growth. Korea’s per capita coffee consumption increased 6 folds between 1982 and 1992[2].  Taiwan was more gradual, but its annual coffee import also increased 3 times between 1988 and 2008[3].

The similarity among these three countries is that their coffee consumption growth was very much stalled before the tipping point, somewhere below 0.1 kg per capita for decades.  Then, at a tipping point, coffee consumption suddenly picked the steam, shooting up exponentially.

If this phenomenon would also be the case to China as it appears already to be, it means China needs decades for any meaningful coffee consumption growth.

International Coffee Giants in China – Waiting for the Tipping Point or Pushing for It

Nestlé is the first international giant to experience China’s coffee market.  After 30 years in China, it had met merely a little success.  It became the biggest fish in a small pond.  As said of a Nestles’ manager in Beijing, for Nestle coffee, China’s total market size is not even compatible with Russia’s, another non-traditional coffee drinking country. 

Another example is Starbucks.  With 200 stores in China, Starbucks Coffee has already saturated China’s obvious market clientele, especially the foreigners and the elite group.  For its continuous growth, it is necessary for Starbucks to look deep into the heart of China’s market, identifying niche positions, targeting specific market group, leveraging its brand power and management depth, and utilizing its vast variety of sales vehicles.

Without the comprehension of market reality and subsequently taking unconventional initiatives, China’s coffee market could spend another ten years or more in standstill. It is a wishful thinking that China’s coffee consumption would suddenly increase just because of its high flying GDP.  The grass root of coffee popularization has been the soul of coffee promotion for hundreds of years.  For any business has an interest in China’s coffee market, it needs to decide if it wants to wait for the tipping point as everybody else, or lead the tide to push toward it, which will set the future market leader in China.

---

[1] Graph was cited from the presentation “History of Japan’s coffee market and Outline of the 3 neighboring countries market situations”, All Japan Coffee Association , 2010

[2] Analysis derived from the data by World Resource Institute, “http://earthtrends.wri.org/text/energy-resources/variable-294.html”

[3] Analysis derived from the data by International Coffee Organization, “http://www.ico.org/new_historical.asp”