China Coffee Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

China Coffee Market is Segmented by Product Type (Whole-Bean, Ground Coffee, Instant Coffee, Coffee Pods and Capsules); and by Distribution Channel (On-Trade and Off-Trade). The report offers market size and forecasts for foodservice (in USD million) for the above segments.

Market Snapshot

snapshot
Study Period:

2016 - 2026

Base Year:

2020

CAGR:

10.15 %

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Market Overview

The China coffee market is projected to witness a CAGR of 10.15 % during the forecast period (2021 - 2026).

The overall Chinese coffee market has been least effective after the advent of COVID-19, as per the analysis, in 2020 an average of one new coffee shop opened every day in China's Chengdu City. That pushed the total number of coffee shops in the city to over 4,000 – just after Shanghai and Beijing, Chengdu is the third-largest coffee market in China. Moreover, with the strict lockdown measures being imposed in the country, the consumers in China have been resorting to at-home coffee consumption thus, increasing the sales of instant coffee in the country during the COVID-19 times.

While tea remains the traditional drink of China, the demand for coffee continues to grow, especially in urban areas and among younger professionals. To promote international coffee trade and coffee drinking culture in China, the Chinese government supported the I-Coffee Exposition in Haikou. The I-Coffee Exposition is focused on coffee production, trade, and consumption.

According to the data from the China Coffee Association Beijing (CCAB), coffee consumption is increasing at an annual rate of 15%. The current leaders in the market, namely, Starbucks and Nestle, have played a significant role in the growth of the coffee culture in China.

With the increasing consumer demand, manufactures are focusing on expanding their product ranges and widening their distribution channels. For instance, Starbucks Corp. partnered with Tingyi Holding Corp., in order to improve its distribution network and increase its consumer base.

Scope of the Report

Coffee is a brewed drink prepared from roasted coffee beans, the seeds of berries from certain coffee species. Roasted beans are ground and then brewed with near-boiling water to produce the beverage known as coffee. The market studied is segmented by product type and distribution channel. By product type, the coffee market is segmented into whole-bean, ground coffee, instant coffee, coffee pods and capsules). By distribution channel, the market studied is segmented into on-trade and off-trade. The off-trade channel is further sub-segmented into supermarkets/hypermarkets, convenience stores, specialty stores, online retail stores and other distribution channels. For each segment, the market sizing and forecasts have been done on the basis of value (in USD million).

By Product Type
Whole-Bean
Ground Coffee
Instant Coffee
Coffee Pods and Capsules
By Distributiob Channel
On-trade
Off-trade
Supermarkets/Hypermarkets
Specialty Stores
Convenience Stores
Online Retail Stores
Others

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Key Market Trends

Dependency on Imports for Coffee

China’s commercial coffee production is limited mainly to the two southern provinces of Yunnan and Hainan, while a smaller amount is produced in Fujian province. Presently, Yunnan produces more than 60% of China’s coffee. Recently, Yunnan’s local government established the Tea and Coffee Industry Bureau, whose mission is to promote Yunnan’s coffee to the domestic and international markets.

China lacks in the production of coffee, owing to which, the country is dependent on imports. For instance, in 2017, the United States exported 1,800 metric ton of roasted coffee and coffee products to China, worth over USD 22 million. Thus, the government and manufacturers need to invest more in R&D activities, in order to come up with better measures to increase the production of coffee.

China Coffee Market 1

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Increasing Consumption of Instant Coffee in China

The instant coffee segment held a significant amount of share in the market studied, owing to the convenience provided by it. Moreover, rising household expenditure, changing lifestyle, and acceptance of western culture trends by middle-class consumers have contributed toward the increased demand for instant coffee across the country.

Moreover, with the growing preferences for coffee over other beverages among the consumers, instant coffee manufacturers have launched several flavoured products to attract a wider set of audience. 

Online retailing has remained a minor distribution channel for instant coffee for the past few years in China. It is likely to gain prominence in the market during the forecast period, owing to the convenience it provides to the consumers, as they find it easy to choose their preferred brands from the vast variety of product choices available.

China Coffee Market2

Competitive Landscape

The Chinese coffee market is highly competitive in nature, with a strong presence of local and global players operating across the country. Thus, in order to sustain their positions in the market, the active players are bringing innovation in packaging and product offering, in order to cater to the consumers’ increasing demand for coffee. Key players are now focusing on social media platforms and online distribution channels for online marketing and branding of their products to attract more customers. Owing to a significant rise in the consumption of coffee, the global and local players are investing in expanding their production facilities across the country. The key players in the market are Starbucks Coffee Company, Nestle SA, and Luigi Lavazza SPA.

Recent Developments

In May 2019, Neste SA launched a range of Fruity Ice Coffee, a fruit-flavoured instant coffee. It took six months for Nestle's local team in China to design and develop the products.

In September 2019, Neste SA opened a new office that is registered as a fully-owned subsidiary of Neste, located at Jing’an Kerry Centre in Shanghai.

In October 2019, the United States coffee chain Peet’s Coffee had launched a pop-up cafe in Shanghai, inspired by the design of its heritage store in California. 

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Drivers

    2. 4.2 Market Restraints

    3. 4.3 Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Product Type

      1. 5.1.1 Whole-Bean

      2. 5.1.2 Ground Coffee

      3. 5.1.3 Instant Coffee

      4. 5.1.4 Coffee Pods and Capsules

    2. 5.2 By Distributiob Channel

      1. 5.2.1 On-trade

      2. 5.2.2 Off-trade

        1. 5.2.2.1 Supermarkets/Hypermarkets

        2. 5.2.2.2 Specialty Stores

        3. 5.2.2.3 Convenience Stores

        4. 5.2.2.4 Online Retail Stores

        5. 5.2.2.5 Others

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Most Active Companies

    2. 6.2 Most Adopted Strategies

    3. 6.3 Market Share Analysis

    4. 6.4 Company Profiles

      1. 6.4.1 Nestle SA

      2. 6.4.2 Starbucks Corporation

      3. 6.4.3 Luckin Coffee

      4. 6.4.4 Hainan LISUN Investment Co.

      5. 6.4.5 Dehong Hogood Coffee Co. Ltd

      6. 6.4.6 Gloria Jean's

      7. 6.4.7 The Kraft Heinz Company

      8. 6.4.8 The Coca-Cola Company

      9. 6.4.9 JAB Holding Company

      10. 6.4.10 Luigi Lavazza SpA

    5. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. IMPACT OF COVID-19 ON THE MARKET

**Subject to Availability

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Frequently Asked Questions

The China Coffee Market market is studied from 2016 - 2026.

The China Coffee Market is growing at a CAGR of 10.15% over the next 5 years.

  • Starbucks Coffee Company
  • Nestle SA
  • Luigi Lavazza SPA
  • Gloria Jeans
  • JAB Holding Company

Are the major companies operating in China Coffee Market.

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