Mei Xiang Yak Cheese

As I explained briefly in the last post, until the end of September I’ll be working with Mei Xiang Yak Cheese on behalf of Ventures in Development (the non-profit org that incubates Mei Xiang) to market more cheese to a Chinese population that is lactose intolerant. Good times. The Chinese cheese market, while minuscule in comparison to that of European countries, is growing rapidly and is finding a strong niche among upper-class Chinese and of course expats. Allow me to explain how Mei Xiang fits into this picture.

Over the past 30 years China has displayed remarkable growth rates never before seen by mankind, but this growth has been unbalanced. Most of the benefits have not reached the isolated areas of western China. The Tibetan plateau of northwestern Yunnan province is one such area. Here, the domestic yak of the Tibetan minority supports the population, but at average elevations of 4000 meters, the herders have not been able to take advantage of export opportunities to the rest of China. Instead, the high transport and storage costs have forced the Tibetan nomads to sell only locally at very low prices. In 2002 a prominent NGO in western China identified the opportunity to produce yak cheese for high-end Chinese markets, and with the help of Wharton and Harvard graduates, with who I am working closely, yak dairy products are being brought to market in Beijing, Shanghai, Hong Kong, and locally.

The cheese factory, run by a small Tibetan family, is located in Landu village, home to just over 600 people living on approximately $1 per day. The village is actually about 50 miles away from where I am currently staying, but my host family said it takes four hour to get there, three of which cover only the last 20 miles or so – the roads are that bad. Local Tibetan herders sell raw yak milk to the Mei Xiang cheese factory in Landu, and are able to forgo the costly procedures of converting the milk into local products, saving both time and money, thus improving their livelihoods.

I’m based in Shangri-La (yes, the town was recently renamed after the utopia in James Hilton’s novel Lost Horizon, and it did this to attract tourists), because Shangri-La is also the location of the local Mei Xiang cheese shop. The cheese shop buys from the cheese factory, and serves as a local outlet for the cheese (and also sells wine and other dishes that use cheese) as well as the distributing outlet for the rest of China. However, up until now, all of Mei Xiang’s business has resulted from customers coming to Mei Xiang, not Mei Xiang going to them. Other than the cheese shop, there are no customers in Yunnan province.

So finding myself fresh off the train from Guangzhou (after Hong Kong), I found a cheap hostel and started calling around. I visited numerous high-end restaurants and hotels, explaining the product and establishing relationships. Two questions resulted: 1) could they have a sample, and 2) what were our prices. Because I still hadn’t made it up north to Shangri-La at that point, I didn’t have any samples, and because Mei Xiang had never established consistent customers in Yunnan, there was had been no shipping logistics or price schedule established. My next stop was Shangri-La, where I’m currently based, and I was beginning get the feeling that this social business and poverty learning experience would be quite different than that of what I had in Bangladesh.