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Interview: Sahra Malik

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Although still relatively small, China's natural products market is growing steadily, especially in cities such as Beijing and Shanghai. Ironically, many domestically produced natural products come from Yunnan but are not sold here due to market or distribution issues.

Beijing-based Shangrila Farms produces and sells all natural coffees, honeys and personal care products, all of which come from Yunnan. After having already established itself in Beijing, the company recently began selling its coffee beans, honeys and soaps at Salvador's Coffee House here in Kunming.

In addition to its environmental angle, Shangrila Farms is also a socially minded enterprise that operates on a fair trade model in which it pays its suppliers above-market rates for coffee, honey and other items in order to provide local farmers with a more sustainable income than they would receive otherwise.

A family business with roots in Yunnan, Shangrila Farms' distribution network and media exposure have grown considerably in the past year. We spoke with Shangrila Farms Managing Director Sahra Malik about the company's story and where it's headed:

GoKunming: How did you end up starting Shangrila Farms?

Sahra Malik: Shangrila Farms Gourmet Coffee all started when my family and I came across a co-op of farmers and roasting facility in Yunnan. We were enchanted by the delicious coffee and the possibility of buying coffee beans from farmers who care for the environment.

Originally Shangrila Farms was set up as fund raiser for the Yunnan Mountain Handicraft Centre (YMHC), however we soon realized the potential of this coffee project as a way to support rural communities in beautiful Yunnan.

I decided to quit my job in advertising and manage our growing coffee business. At the same time my sister started working on honey and Shangrila Botanicals, our natural cosmetics line. In January 2010 we decided to partner together. So now Shangrila Farms is a natural products company that sells organic coffee, natural & pure exotic honeys, and hand crafted 100 percent natural cosmetics.

GoKunming: Why did you decide to go with a Fair trade model?

Malik: My mother Carter Malik runs YMHC in Diqing Prefecture – in the area known as Shangri-la. She and my father often travel to Yunnan, and especially to Shangri-la. Our family ties to the area are the inspiration for starting the business – we wanted to give back to the area.

YMHC is a perfect organization to support as they do many projects that support eco-tourism and handicraft development. Their facility has a free library and English classes. We donate a portion of our profits to YMHC's community service projects in Shangri-la.

We want to support farmers that grow high-quality natural products. We currently pay four times the fair trade standards. We want to form a lasting partnership with the farmers that can help economic development in the area.

GoKunming: What were the biggest challenges in setting things up?

Malik: The biggest challenge is working with the Chinese government, especially in trying to get our company registered and legal. It has been quite a challenge and has taken over a year, where as registering a company in Hong Kong or the US takes a matter of weeks.

GoKunming: How many retail locations in China sell your products?

Malik: We sell our products in over 80 locations all over Beijing, Kunming, Shangri-la, Hunan, Hong Kong and Lhasa. We recently opened a kiosk in EC Mall in Beijing for our Shangrila Botanicals natural cosmetics line.

GoKunming: Are you exporting any of your products?

Malik: We export to Hong Kong at the moment. We have recently launched our coffee with Pacific Coffee in Hong Kong. It is available to drink as the "Yunnan Brew" and for purchase in all of their Hong Kong locations.

We hope to start exporting to the US. Our dream is to sell at Whole Foods!

GoKunming: What are your most popular products right now?

Malik: Right now for the coffee the Yunnan Blue and the Shangrila are the most popular. Our anti-aging soap is very popular. Also, our newly launched pomegranate honey is flying off the shelves.

GoKunming: You've only just started selling your products in Yunnan, do you plan on expanding your presence in the province?

Malik: We hope to sell our products more in Yunnan. Since we are based in Beijing we hope to work with a distributor who can help sell our products in the area. We are still looking for suitable partners.

GoKunming: How have Shangrila Farms products been received in Beijing so far?

Malik: We started selling in the beginning to the expat community, at the local supermarkets here, also at speciality shops. Our products have been well received, our coffee is quite popular in the grocery stores. Our honey is popular in specialty shops, such as the Yoga Yard and Tai Tai.

We have now launched in a Chinese mall, so we are aiming to sell to the Chinese market. In China consumers are increasingly sophisticated and there is a growing market for organic products.

GoKunming: Do you plan to add any new products in the coming year?

Malik: We have recently launched three new lines for our Shangrila Botanicals natural cosmetics line: anti-aging, lavender and rose. We have also expanded our natural soaps line from five to 25. One line we are thinking to work on is a maternity and baby line. We are always looking for customer feedback.

GoKunming: What do you see in the future for natural foods and personal care products?

Malik: A lot of brands position themselves as natural, but when you take a closer look you find that indeed there are many preservatives and additives. I think more and more consumers are looking for 100 percent natural alternatives. We have already seen a big move for this in America and the UK and we think this will catch on more in China as well.

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Comments

Strange, does coffee really grow that high in Shangri-la? Something smells fishy here.

Thought it sounded strange as well. A quick google later told me that coffee trees don't grow well at altitudes higher than 3500-4000 feet and they don't particularly like extended periods of frost so clearly the coffee isn't grown near Zhongdian. It wasn't clear from the article but the coffee they sell probably comes from Southern Yunnan.

i believe the coffee is actually grown near Dali, a bit further east from where most of Yunnan's coffee beans are grown. their honey is from the weixi area.

The mistake was mine... it appears I could have used another cup of coffee when I wrote this. Correction has been made, thanks to all for setting the record straight.

Chris - REALLY nice article (for me). THanks much. Guess I'll have to take a closer look at Salvador's glass case next time I'm in the shop - maybe they can add this stuff to their "take-out" menu...

And I REALLY appreciate Sal's staff not trying to upsell this stuff - I hate that.

For us - we can periodically absorb a roughly 10-20% premium over domestic products, depending on the prices and other important stuff like expendable capital...luxury expense..

It seems a little disingenuous to be promoting Shangrila Coffee that is not grown or processes anywhere near Shangrila doesn't it? Because from a read of this article and a quick look at the website, one gets the impression that this coffee is from Shangri-la.

In other countries this would be considered false advertising.

Please in the future, rather than just regurgitate some PR material from an attractive salesperson, how about asking the questions we want to know.

I agree with Andrea Fox completely. The salesperson is very attractive.

Not quite sure I liked how the thread was "harmonized." Granted the previous posts about the Malik families activities in China were off-topic, but I have to wonder if Shangrila Farms will start advertising on gokunming soon...

Seems like they have a pretty cool system set up for selling their products - but I do wonder if the Fair Trade thing is thrown around a bit too much these days. Granted, I know that there are several standards applied to Fair Trade around the world, so which one does Shangrila Farms follow? Are their products Fair Trade certified by any international organizations?

I do think it's surprising they didn't mention her father being the UN Representative to China for the past seven years...but I guess if you're going to use your dad's connections you may as well do it for something good like this!

Gokunming website is registered at Salvador's Coffee House's address. A Christopher Horton, the guy under whose name the website is registered, is using email account on their server. You can check it on alexa.com. This article is in fact an advertisement...most stuff on this website is.

Sorry, I am starting to loose faith in objectivity here, particularly if there is a tie-in between advertisers and articles, and sales at Salvadors.

Now, I was under the impression that at Salvadors they help the staff who are from southern Yunnan - perhaps they grow coffee there - and Salvadors could promote coffee from that place. Because it seems that Shangrila Farms coffee is not from Shangrila.

Or doesn't anyone care about ethics anymore?

shangrila farms is their brand name and i don't think they are trying to misrepresent anything by carrying this name into their coffee line.

they mostly sell their products in beijing and shanghai, and as one of the owners of salvador's, i thought it would be a good idea to have a place to retail their products locally. i like their products and i like what they have done within the farming communities. pay a visit to the farmers they work with and ask them how they feel about it.

salvador's has no economic ties with gokunming (other than we pay for a banner advertisement) and sales of shangrila farms products in no way could benefit gokunming. the gokunming guys have to pay for their organic coffee too. i can only assume that gokunming thought the brand alone was interesting enough for an interview. and the above posted web link shows that gokunming's address is in wenhua xiang but is not salvador's address. we are wenhua xiang #76.

anyone who knows the people of salvador's and those of gokunming would find all of this unfounded conjecture rather amusing; but if you'd like to discuss it in person some time, i'd be happy to and am easy to find.

I tried their coffee and it's very bad. The roast is off and it just tastes old. I bought a pack of Chicago's coffee packs the other day, while that's not very good is light years ahead of Shangrila's. Stay away from this brand.

same here, i've tried their beans too and salvador's packs are way better. also their honey is generic tasting, not much different from the 15 yuan stuff i get at walmart and really ridiculously overpriced. friend in bj tried their soap and said it's just fancy packaging for an inferior overpriced product. Like 5 shotwhisky above, my advice is to stay away from this fancy looking packaged, luxury priced but subpar quality brand.

Whatever you do, don't get their coffee, the 2 packs I got is old. I'm sure they don't sell very many and probably got lots of old stock lying around. Honey is mediocre too. Shangrila farms should have a more hands on approach to their production quality than merely branding. Not sure if this venture is gonna work out for them.

I got diarrhea from their honey, is that normal?

It's difficult and financially burdening in China to become Fair Trade or Organic certified, so I believe it is already magnanimous of them to pursue a mission that seems to be supportive of a local community.

Ofcourse the marketing may be a little misleading because one will not know for certain "how" fair traded it is or what stipulates being organic. In fact, an interesting sidenote is that out of many developing nations China seems to lean more supportive of farmers, probably due to it's communist ideals.

One thing I noticed is that though their products are from regions elsewhere of Shangrila they actively choose to support the Shangrila community. Either way, interesting GK article bringing up some local issues and best of luck of Shangrila Farms.

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