While working on a project that began in L.A. months ago, we’ve shifted our focus to Beijing. Business model intact, site lease signed, staff hired for buildout, and training sessions have been scheduled.
As you probably know, Brewed Behavior doesn’t typically consult at a retail level; we stick to our strengths in helping roasters and producers. However, occasionally a wholesale client will have “a” retail flagship store or “a few” retail stores tied to a concept that we just can’t resist, at which point we will tie into the project. This is one such project, and a good opportunity to try new things like: a high-tech brew bar on its own, an espresso bar, freshly sourced foods from an open kitchen, and the roastery at the retail location, which just happens to be in a shopping mall. Yes, a shopping mall, or as they are known in China: the emerging trend in lifestyle centers.
We learned a few good lessons about shopping malls back in some previous dealings in Japan. That said, we read about the “BRIC” economy (Brazil-Russia-India & China) everyday, and how it is the economy of the future. As Americans it’s easy to dismiss this notion in hopes that our own place on the top of the pile will be restored any day now. In previous articles I have gone on record to dispel this entitled cultural thinking, adding simply that it will never be the same, even in our best patriotic efforts. Brewed Behavior is currently working in three of the four BRIC economies and I am convinced the framework is built upon solid modeling. These economies watched from the sidelines as we issued too much personal debt to those lacking the ability to repay.
What I can tell you about this visit, other than the lighthearted comments about it being “Social Media Rehab” for visitors like myself (as you might guess, they have their own versions of Skype, Twitter and Facebook and this obviously helps to keep their culture internalized), labor for service industry jobs comes from the “outer rings” (rural areas) by those seeking a chance to make money and improve their lifestyle. In exchange, they are compensated with a subsistence wage and dormitory living accommodations provided by the employer. There are no credit cards, automobiles or other debt incurring opportunities at this level. Everything is done in RMB (cash). Something to watch for with this model is the elimination of the middle class. The upper class will of course be privy to cash and credit and banks will make plenty of interest. So the machine is oiled.
Economic indicators such as GDP and unemployment are relevant, but the demand for legitimate goods and services is the most visible and rapidly growing trend today. Of note is the younger generation that used to fill the rural factories comprising the world labor force. These kids are shunning knock-off manufacturing in hopes of a better life in the city. As a result, many of the hundreds of people in the queue at the Apple store, ready to buy an iPhone, are young service-industry workers. Food being a necessity, an iPhone seems to be a close second as an affordable luxury.
While coffee chains from the U.S., New Zealand and the U.K. are opening minds about coffee culture, as with any market the notion of what a coffee shop should be, it is still a work in progress. I am proud to say that Brewed Behavior’s client in Beijing has will be a clearly identifiable coffee importer, roaster, wholesaler, educator and ambassador, first and foremost. An ambitious undertaking to say the least.
And by the way, every product in the building is organic. Progressive is what is hot in this market. Taking care of the earth and the producer while satisfying the voracious appetites of the masses will be the challenge.
An exciting time for coffee and China.