China is known around the world as a tea-drinking nation. This is rapidly changing as a younger and wealthier generation embraces the coffee culture. Coffee is now enjoyed by 52 percent of the population.
There are three groups of coffee consumers in China:
1) those who go to coffee shops for business meetings
2) those who go to socialize—generally middle-aged women and younger generations
3) young couples who see coffee shops as great places to go on dates.
According to the International Coffee Organization, young middle-class customers make for 75% of coffee drinkers in China, with women accounting for 70% of this group. Tea, pastries, and Wi-Fi are all vital to most consumers, just as they are in coffee shops abroad.
In the future years, the number of Starbucks stores in China is likely to surpass that in the United States. The coffee behemoth intends to expand its presence in the country to 6,600 locations. China’s coffee consumption is increasing at a rate of 30% per year, putting it 2% higher than the global average.
The Products
As consumers want higher-quality beverages, speciality coffee is becoming increasingly popular in China. Lattes and cappuccinos, which are made with milk, are the most popular. Coffee with healthier ingredients and non-dairy alternatives (such as oat milk) is also gaining popularity among consumers. In China, convenience reigns supreme. Coffee is purchased in convenience stores by 52% of consumers, whereas coffee is consumed in coffee shops by 44%.
The Future
The Chinese coffee industry presents a once-in-a-generation opportunity for ambitious coffee brands, with significant annual consumption growth and a quickly rising specialty scene.
Adapting to China’s cultural customs and tastes is essential for business success. China’s use of technology for food and beverage delivery, local tastes, digital media, and networking with trusted enterprises are just a few examples. Brands who do so will undoubtedly see substantial growth in the Chinese coffee market for many years.
Assuring that flavors and quality satisfy expectations while focusing on the right local market and consumers increases the likelihood of success. For the past six years, Mersol & Luo has been advising beverage manufacturers through incredibly difficult and ever-changing situations in the Greater Chinese markets.
