Reference no: EM133252602

China Green is about to introduce a better tasting, healthier, coffee that will boost energy while providing the consumer a refreshing drink. The company's proprietary formula combines the health benefits of Ginseng, Reishi Mushroom, and a top-quality special coffee bean that is only found in China. The proprietary special formula of these 3 ingredients create a line of delicious, healthy, instant gourmet coffee drinks for home or on-the-go consumption.

What separates China Green from other coffee brands? It's great tasting, has a proprietary blend of 3 energy boosting ingredients, and is conveniently packaged for an 8oz cup of energy. This product is sold exclusively online. China Green will be the first coffee drink in the United States to use this special blend of energy ingredients which will provide a healthier energy boost compared to other main stream energy drinks. In addition, the special blend of ingredients minimizes the effects of traditional coffee on those consumers who are sensitive to caffeine. The unique coffee bean can only be found in China and due to its growing condition and China Green's proprietary production techniques, minimize the bitter taste often associated with coffee.

"China Green is truly re-inventing how coffee can be consumed," says President Zhang Wei. "We've created a healthy, fun drink experience that both teens and adults will love. And, we chose to use all-natural ingredients because it provides an immediate energy boost without the caffeine / sugar crash a few hours later. It tastes better than regular coffee and it does not have the sugar and subsequent carbs infused in the coffee drinks like the ones sold at the big box coffee shops. It's something parents can feel good about allowing their teenager to drink."

China Green coffee's great taste and health advantages represent the most significant advancements in recent history. "Consumers told us they wanted something new and different," explained Wei. "We held focus groups across the country and the response to our concept and product was tremendous. After viewing our individual serving package designs and tasting our China Green coffee, 98% of the participants said they liked the taste, and would purchase this product."

CHINA GREEN Inc.

Coffee was first introduced to the Yunnan province in 1892 when a French missionary brought the crop to the region. However, it is only since 2008 that it has been grown on a large scale as a commodity, according to China Green's president Ms. Zhang Wei. In the past five years, the production volume has increased steadily from 60,000 tons per year to nearly 120,000 tons. Almost half the coffee produced in Yunnan comes from Puer, an area traditionally associated with tea production. According to the Ms. Wei, tea and coffee are grown together in Puer and actually complement each other. "Our family choose to grow coffee because it's more profitable than other crops like sugar cane," says Wei, "that's why it is developing so fast."

As a small startup company with limited resources, China Green is devoted to developing innovative new food products, combining outstanding taste, with health advantages, to be sold in the United States. It is a family owned company based in China, with family connections and a warehouse in United States. China Green owns the coffee bean production farm, the production facility and the online portal, where the coffee product can be purchased. China Green purchases ginseng, and reishi from other local Chinese vendors.

The layout of a coffee farm in southwest Yunnan consists of 5,000 coffee trees per hectare, grown in full sun, plantation style. The special China Green coffee bean is selected for its low susceptibility to disease and higher, quicker yield. The unique coffee bean had been developed many generations ago by Ms. Wei's family. Over the years, each planting was carefully culled to promote the best taste (less bitter), color and plant sturdiness. It has been carefully nurtured to maintain its unique flavor. But the coffee plants were very difficult to grow. Fungus, leaf rust and other environmental factors that can impact the crop. Recently a soil and plant consultant was brought in to develop cultivation techniques that would make the volume commercially viable. China Green coffee beans is now grown and processed under strict controls

Her family use a washed method of harvesting that has come to include mechanical mucilage removers in recent years. Her family stands out among fellow farmers as their neatly manicured land shows the care of an expert agronomist, as do the shade trees they have planted to help fend off harsh frost that's decimated past crop years. Though production is limited, the farm has several hectares of land to increase production if needed.

China Green believes that the coffee product will do well in the United States market and has conducted several marketing surveys to confirm market potential and shipping feasibility. The instant coffee product will be available as individual single packs (sold in cases of 12) as well as the bulk pouch (which is equivalent of thirty 8oz cups). More sizes will be available as market dictates. China Green has a warehouse facility in the US to have product readily available and to minimize supply chain disruptions.

Question: Which of the three competitive advantage types would you recommend (cost, product differentiation, or niche) and explain why you recommend this.