Figure 5 and Figure 6 show coffee production and coffee consumption in China, respectively. The sheer number of Starbucks shops isn’t the company’s only impressive feat. [3] The main regions within Yunnan for coffee production are Baoshan, Dehong, and Menglian in Pu'er. Restaurants China Co Ltd, to further explore the coffee market in China. As I walked to my table, I passed two French couples immersed in passionate conversation over half-full lattes and Americanos. “And yet, everyone within the coffee industry recognized that there was a tremendous opportunity.”. What Does Made in the USA Really Mean? We pride ourselves on delivering ex. performance. Unlike Baker and Spice, Cafe On Air was filled with local Chinese customers. In these cafes, they are “chatting and taking selfies,” while middle-aged men and women are “reading books or working.”. China is the … At the Starbucks in the USC Village, my tall, black Americano costs just $2.15. Still, many coffee farms in China produce and export excellent quality coffee, which makes … Starbucks Coffee’s first shop opened near Pike Market in Seattle, Washington. Maltz realized the strategic first-mover’s advantage of entering an untapped market. When I was in Shanghai over spring break, I spent nearly a dollar more for the same drink. Coffee is also now sold at many convenience stores and fast-food restaurants. The coffee market in China is one of the fastest-growing and the most dynamic in the world. From December 31, 2017 to December 30, 2018, there was a 92% increase in revenues from $340.2M to $651.8M. A cup of coffee in Doha, the capital of Qatar, topped the list with a price of $6.40 USD. For millennia, China has been a tea-drinking society. Given China’s huge population, coffee companies have found a market in China that they hope to develop. More coffee means more coffee drinkers. Starbucks is also increasing its geographic diversity. Even so, coffee is growing increasingly popular, reflecting expanding tastes. This cafe had all the characteristics of an American coffee shop with the conversationalists, the workers, and high-end beverages and baked goods. All images courtesy of Sucafina. China has had its own coffee farming industry for more than a century, started when a French missionary to the southern province of Yunnan introduced the crop in the late 1800s, and the industry is now rapidly expanding along with national consumption. Their lattes were also relatively cheaper than competitors, with a price of 24 RMB ($3.58 USD) and their speciality flavored lattes, including matcha and black tea, were only 27 RMB ($4.02 USD). With coffee shops lined up across these populous streets, coffee has established itself as a trendy, Western luxury. While specialty coffee production in China is still less than 2% of total volumes, China's recent selection (2018) as the portrait country at the world's largest Specialty Coffee trade show held by the Specialty Coffee Association emphasizes the growing recognition of China as producer of specialty grade coffees. Sep. 17 – Coffee in China market is growing larger and larger, the coffee category is exciting in China overall. China’s 400 million millennials are the top target for these chains. The menu was filled with options ranging from coffees and teas in the $5-6 USD price range to healthy juices. Planting coffee is a long-term investment and patience is required to earn a payout. Scott Rozelle discusses his new book that looks at the stark contrast between China's rural and urban populations. Coffee consumption is a hot trend worldwide and is becoming an essential for many consumers. When you’re in China, you’ll learn quickly that a big part of the culture is drinking tea. By 2022, the company aims to have 6,000 stores in 230 cities. There is an interest in developing and becoming part of the middle class, doing better than your parents.” The rise in coffee consumption has coincided with an interest in “economic achievement” and the “adoption of Western style,” according to Hetzel. Coffee consumption in China has nearly tripled in the past four years, with coffee imports growing 16 percent a year compared to about 2 percent in … “It was very difficult to find a cup of coffee outside a Western hotel or Western area.” However, over a decade later, this is no longer the case. China, One Of The Biggest Coffee Consumers In The World. [8], In Yunnan about half of the crop went to export markets in 2016, generating $280 million in earnings. Flat White Coffee in Chinese; Flat White in Chinese. Chinese Characters: 澳白 Pinyin: Ào bái Meaning: 澳 refers to Australia, and 白 means white.So an Australian White Coffee! Photographer Aaron Berkovich captured coffee production in Yunnan from 2011 to 2013. Hetzel attributes much of coffee’s success in China to the millennial generation. In mid-May, Luckin went public on the U.S. market and had a strong debut day as it was heavily anticipated by those in the tech and coffee industries. The Reserve serves as a space to showcase its “most extraordinary coffees.” Currently, there are fewer than half a dozen Starbucks Reserves in the world, and the Shanghai Reserve is bustling with both Chinese nationals and tourists, looking to learn more about the coffee craft, buy fancy coffee equipment, or share a cup of joe with good company. Chinese powerhouses Shanghai and Beijing didn’t come far behind, with prices of $4.60 and $4.42 respectively. “You can probably find a Starbucks just outside of your complex or next to the subway stations,” says Ms. Jiang, a Starbucks barista in Changzhou, a city in southern China near Suzhou. In particular, coffee consumption has grown among young Chinese professionals. [1] Nestlé also arrived early in Yunnan to encourage the cultivation of coffee. “I think it is driven by the younger generation, clearly,” says Hetzel. The coffee industry has come a long way in the past 13 years. In one week, I carried out ethnographic research in five coffee shops in Shanghai and one in Suzhou. [9] The United States is also an export market for Chinese beans, with Starbucks purchasing more than half of the coffee imported into the U.S. from China in January-September 2014. The world’s largest Starbucks is located in Shanghai and is the second Starbucks Reserves to be created. China's coffee market offers a silver lining for pandemic-stricken global coffee chain leaders like Starbucks, which closed many stores around the world, including shops in China. The proportion of freelancers and coffee practitioners is close to that of public institutions. [11] The exchange takes advantage of Chongqing's role as a transportation hub. Yunnan Province shares some of the same characteristics that enable producers in South America and Africa. According to the analysis of the coffee market reported by Chinabgao, the growth rate of coffee consumption in China is about 20% per year, more than 2% above the global growth rate. From business meetings at the Starbucks in the upscale area of Xintiandi, Shanghai to multicultural get-togethers at the expat-friendly Baker and Spice on Anfu Road, coffee has become a cultural icon in mainland China. Except for coffee at the boba shop Coco’s or McDonald’s, I shoveled out around $4-6 USD for my caffeine fix. Though coffee has been popular in the West for 150 years, its emergence in China is recent. Some typed away at their Lenovo computers while others engaged in deep conversations with business partners. [3], A French missionary brought coffee to Yunnan province in the late 19th century, marking the crop's introduction to China. However, I noted speciality drinks that cost over $7 USD and the ice cream snack items available for sale alongside Starbucks’ usual menu of sandwiches, breads and cakes. “In 2006, there were very few multinational chains that were present,” Hetzel says. A strong Western influence has manifested itself through the rise of coffee in China. And while a regular-sized latte costs around 30 yuan ($4.24) in China, it can be as cheap as 4.5 yuan ($0.60) at some places with the use of discount vouchers. Although Luckin’s (“LK” on the Nasdaq) went from its I.P.O. Currently, China’s per capita coffee consumption is only at five cups per year, whereas the U.S. is at 400 cups per year and countries in Europe like Norway and Sweden are above 1,000 cups per year. China's Luckin Coffee to pay $180 million penalty to settle accounting fraud charges. Originally published by US-China Today on June 28, 2019. Given Los Angeles is one of the most expensive cities to live in, this is the price I pay for coffee. In 1999, little over a decade following the resurgence of the coffee production sector, the first Starbucks store in China opened in Beijing. Since 1971, Starbucks has emerged as one of the most well-known multinational enterprises in the world. [3], White-collar workers are the main force of coffee consumption. In Yunnan, he met with and photographed Chinese coffee farmers who were part of GoodWorks Coffee, a nonprofit that helps coffee farmers increase their returns on investment. Yoyo indicated being perceived as young and fashionable remains important, as it allows individuals to “build a perfect digital self.” In China, like many parts of the world, having a strong social and digital presence is a priority. In the upcoming years, coffee chains will continue to vie for market dominance. I ordered a tall Americano for 25 RMB ($3.72 USD), the cheapest drink on the menu. [1] However, the modern Chinese coffee cultivation industry began in 1988 when the Chinese government, World Bank and the United Nations Development Programme jointly initiated a program to introduce coffee growing in the region. [9], The emergence of dedicated specialty coffee farming commenced around 2009 under early adopters such as Hu Xixiang from Mangzhang Farms in Menglian (Pu’er), Yunnan alongside the support of industry professionals such as Timothy Heinze, Joshua Jagelman, and Saxon Wright. In many towns – one person does it and then everyone else joins in.”, In addition to homegrown coffee beans, China has several of its own homegrown coffee shop chains. Sellers see great commercial potential. Though the prices may appear perplexing, the consumption of high-priced coffee reflects the same motivations behind buying luxury, designer goods. Starbucks later seized on the warming of China's outpaced recovery to continue its store-opening plan. China might be the fourth-largest country in the world and have the largest population on earth, but it has one of the world’s lowest coffee consumption rates, with citizens consuming an average of just one cup a year. [1] Hogood Coffee, the largest domestic instant coffee maker, was founded in 2007 and has been responsible for cultivating much of the coffee in the Dehong region. China’s Luckin Coffee has agreed to pay a $180 million penalty to settle accounting fraud charges, the Securities and Exchange Commission says. [12], "Coffee brings prosperity to Yunnan farmers", "Coffee bean output grew 50 percent in 2016 in China's Yunnan Province", "Starbucks scoops up coffee beans from China for blends, Asia sales", "Chongqing becomes largest coffee trade hub in China", "Yunnan Coffee Exchange is formally launched", Grasping the large, letting go of the small, China Banknote Printing and Minting Corporation, National Development and Reform Commission, Ministry of Industry and Information Technology, State-owned Assets Supervision and Administration Commission, State Administration for Industry and Commerce, China Council for the Promotion of International Trade, All-China Federation of Industry and Commerce, Guangdong-Hong Kong-Macau Greater Bay Area, Mainland and Hong Kong Closer Economic Partnership Arrangement, Mainland and Macau Closer Economic Partnership Arrangement, Regional Comprehensive Economic Partnership, https://en.wikipedia.org/w/index.php?title=Coffee_production_in_China&oldid=981891998, Agricultural production in China by commodity, Articles with unsourced statements from October 2020, Creative Commons Attribution-ShareAlike License, This page was last edited on 5 October 2020, at 00:57. The Shanghai coffee shops attract a younger, more millennial population because most of them have “fancy interior designs,” which allow individuals to take “fancy photos” and “selfies” there. Number of cafés in China 2018, by brand. In addition to the Reserve, according to CNBC a new Starbucks emerges every 15 hours in China to keep up with rising demand. During his two years in Yunnan, Berkovich noted that production had risen, output became more predictable and sustainable, and the quality of the beans produced was higher. [2] Ninety-eight per cent of the coffee grown in China comes from Yunnan province. China’s Luckin Coffee has agreed to pay a $180 million penalty to settle accounting fraud charges, the Securities and Exchange Commission says. Coffee shops and coffee consumption are rising in China. While Starbucks played an integral role in bringing coffee to China, Chinese consumers can now get their caffeine demands met elsewhere. China’s tea-centric culture was relatively untouched by Western coffee retailers until the late 1990s, when Starbucks first entered the Chinese market. While tea is great and all, sometimes you’ve just got to get a good cup of joe. According to data from China Coffee Association Beijing, the coffee consumption growth is increasing at an annual rate of 15 percent. Number of Starbucks stores in China 2005-2019. “It is an overall demand for modern culture. Most of the customers were Chinese, many of whom were well-dressed in business casual attire. This is nearly double that of the second largest tea producer in the world, India. [11] Pu’er City also saw the establishment of a coffee trading hub when Yunnan Coffee Exchange started operations in January 2016. Although coffee consumption didn’t take off until the mid-2000s, its current popularity in China is undeniable. As Hetzel puts, many want to manifest their membership in the coffee-sipping middle class. Market research from the international bank UBS ranking the world’s most and least expensive cups of coffee confirms that coffee in China is costly. Both foreign and domestic chains are growing, as Starbucks and Luckin take the lead. NYU-Shanghai student Yoyo indicated many cafe-goers in China choose coffee shops for their aesthetic purposes and ambiance. China isn’t just a country of consumers; it also produces coffee. While this might not sound promising, coffee consumption rates in China are growing at 30% a year, compared to an international rate of 2%. David Shambaugh spoke on his new book focusing on the United States and China in one of the world's most dynamic regions. In a December 1999 interview with CBS News, Maltz said, “It would be foolish for us to wait until coffee was well entrenched in China.”. 92% increase in revenues from $340.2M to $651.8M, one of the most expensive cities to live in, Video: David Shambaugh on the US and China in Southeast Asia, Joshua Goldstein - Remains of the Everyday: A Century of Recycling in Beijing, Scott Rozelle - Invisible China: How the Urban-Rural Divide Threatens China’s Rise. Luckin Coffee has agreed to … That is what is driving the change entirely. Coffee production in China is rising. [4] In 2013, Yunnan Coffee Traders became the region's first dedicated specialty coffee exporter; they are now (2018) the largest exporter of Yunnan specialty coffee in China. As Western things are super trendy in China, there are more and more coffee shops popping up every day. China’s booming coffee culture is also visible on social media, where coffee companies and netizens collectively discuss and share pictures of their perfect brew. price of $17 to $25 in a few days, the price has continued to fluctuate on a downward trend with a low of $14.75 on May 22. However, Starbucks did not enter the Chinese market until the late 1990s, when Lawrence Maltz brought China’s first Starbucks to the lobby of the China World Trade Building in Beijing. Other newcomers are ambitiously expanding. Modern cultivation of coffee in China began in 1988. With an increase in over 500 stores in that year, Starbucks expanded its physical capital as well. Leading Italian coffee brand, Lavazza SpA, Luigi is cooperating with leading consumer foodservice brand, Yum! The Atlantic states that “high prices actually entice customers who wanted to show off their new affluence.” For coffee consumers in China, Starbucks and other Western coffee brands enable them to show off their wealth and good taste. Published Wed, Dec 16 2020 11:59 PM EST. Despite China’s economic slowdown, Starbucks’ revenue has grown in the past year. The word coffee (咖啡) comes from “Kahve” meaning power and passion – the key drivers of coffee culture in China and around the world. Though regular meals in Shanghai are comparatively cheaper (I had several meals for under 25 RMB or $3.72 USD), and the minimum wage is around $10 less than Los Angeles’, coffee in Shanghai is relatively expensive. At the center table, many people were engrossed in their work: one tall, blonde man creating graphic designs, two college-aged students working on an assignment and two Americans bidding each other farewell. Top tip: As flat whites are relatively fresh to make it over to China, there isn’t really one standardised name for them. There are now almost 2,000 Starbucks locations nationwide, and the enterprise recently announced plans to open an additional 3,000 stores in China … Currently, it owns stores in 13 cities and aims to expand. Other Western coffee companies have also entered the Chinese market, such as Britain’s Costa Coffee, Canada’s Tim Horton’s, America’s Dunkin Donuts and the Swiss Nestlé. Since its inception in 2017, Luckin has opened more than 2,300 stores and “serves lattes at prices about 30 percent lower than Starbucks and provides subsidised deliveries to office workers,” according to the Financial Times. Through incorporating coffee into their day-to-day, Chinese individuals have been able to adopt aspects of Western culture. "Compared with foreign coffee markets, the average person in China only drinks three to four cups of coffee every year," says Lyu. [3] Most Chinese coffee beans are commercial grade and exports are primarily green beans sent to European markets. [9] Major trading houses like Volcafe, the coffee arm of London-based commodities trader ED&F Man with an office in Yunnan, and Miami-based commodities trader Coex, source from China to balance deficits in supply from traditional exporting countries during years of drought or crop rust. He also reported growers received strong returns that supplemented their incomes from other crops like mangos. Given China’s huge population, coffee companies have found a market in China that they hope to develop. More importantly, the emergence of coffee in China represents the new dominance of a previously uniquely Western influence, and coffee itself serves as an exhibition of social status and cosmopolitanism. China has produced approximately 120 million kilos of green bean coffee each year from 2014 to 2018. “At that time, in 2006, there was little specialty activity and very little coffee consumption,” coffee trade expert Andrew Hetzel says. Many companies are providing top-quality products in the market. Berkovich argues, though, that farmers “wanted to diversify crops to increase revenue and earn some more money.” In contrast, Berkovich stated that others started growing coffee as they “connect with friends. The Atlantic argues coffee has been used to signal a certain lifestyle and status in mainland China. Today, Starbucks dominates the Chinese coffee market. All rights reserved. China’s coffee market also has ample room to grow. According to Berkovich, GoodWorks Coffee helps local coffee farmers throughout multiple steps of the coffee production process and had successfully “tripled annual return for some of these farmers,” which drew Berkovich to the project. coffee in China has been increasing at double-digit rates and is not expected to slow down (ICO, 2015). Tags: China Coffee Buyers China Coffee Vending Machine Buyers Written by Rebecca Harbeck. The value of Luckin’s coffee is what attracted its growing customer base. [citation needed], Domestic coffee consumption in China rose in parallel with an increase in domestic coffee production; from 2006 to 2017, Chinese coffee consumption had grown by an annual average of 22%. The Baker and Spice on Anfu Road in Shanghai had a clean layout, dim lighting, warm air and indie-alternative English music playing in the background. In early 2018, start-up unicorn Luckin rocked the coffee industry by vying for Starbucks’ market share. Business experts like Hetzel see that these chains are a long way from meeting the rising demand for a nice, coffee shop experience. The bakery had slices of cake starting at $4 USD, donuts for $2 USD and an assortment of homemade breads. This list excludes the many companies which operate coffeeshops within retail establishments, notably bookstores and department stores, or restaurants or convenience stores which also serve coffee.These chains frequently engage in coffee wars to gain brand and consumer market share. The definition of the Federal Trade Commission, states … In China especially in Urban areas, you will find plenty of multi-national coffee shops and cafes, most of the coffee is drunk on the go especially during the morning rush hour, more people are drinking coffee and its seen as the perfect alternative for tea. In contrast, the average American drinks some 400 cups per … During January 2020, Lavazza opened its first flagship store in Asia in Shanghai, along with its official WeChat account called, Lavazza Official Coffee Shop. Swiss green coffee trading group Sucafina has announced it has established a new coffee company in China, in partnership with Chinese metals trading and logistics company Depond. However, leaders in the coffee industry and business sector warn about too much optimism in Luckin, as they do not see its business model as sustainable or profitable long-term. Even if the population individuals drink an average of 5 cups of coffee per year, compared to the world’s average of 240 cups, the annual growth in China nowadays represents 7 times the world’s annual growth. The city is the starting point of the Chongqing-Xinjiang-Europe freight train, a corridor of the Belt and Road Initiative. Although the market still faces some cultural and societal hurdles, China is waking up and smelling the coffee. Countries such as Japan and Korea have an average yearly consumption of 300 cups of coffee per capita, the worldwide consumption of coffee is around 240 … [6] Pu'er alone accounts for 60% of the country's total production. In 2016 and 2017, China was among the top 20 worldwide producers of coffee. Hogood capitalizes on relaxed land use policies in Yunnan which have allowed farm land consolidation through contract farming schemes; seedlings are planted by Hogood and harvested by farmers of the beans that are in the end purchased by Hogood. In 2017, China produced over 2.4 million tons of tea. Of particular interest, according to ICO (2015), estimates show China now harvests more coffee than Kenya and Tanzania together, and For millennia, China has been a tea-drinking society. Entering China’s Emerging Coffee Market. China is best known as a tea-drinking country, but, in the last few years, it has become one of the largest coffee consumers in the world, when speaking of the emerging countries. “You have representation from many large multinational chains–as you have seen, last week [referring to the opening of Shanghai’s Starbucks Reserve], Starbucks is expanding at a blistering pace,” he says. In China, the motherland of tea, coffee is rapidly gaining in popularity. In a survey, white-collar workers accounted for 30% of the total, which is the largest consumer group — followed by the government official, school staff and people who work for the organizations, accounting for 15%. This list of notable coffeehouse chains catalogues the spread and markets share of coffeehouses world-wide. Modern cultivation of coffee in China began in 1988. Coffee shop industry market size in China 2013-2023. recently followed poor performances from American companies Lyft and Uber’s I.P.O.s  and came amidst a growing trade war between the U.S. and China, so the timing could account for the company’s I.P.O. At first, Starbucks stores were only found in large, coastal Chinese cities. Like Baker and Spice and Starbucks, Cafe On Air’s beverages were expensive. Emergence of Coffee in China. [1] In 2016 and 2017, China was among the top 20 worldwide producers of coffee. At a shopping center on Nanjing Road in Shanghai, an Americano at Luckin is significantly cheaper than Starbucks, costing only 21 RMB ($3.13 USD) as opposed to Starbucks ($3.72 USD). Costa Coffee has remained quite popular in China, setting up a loose rivalry with Starbucks, while others like Dunkin’ Donuts have not fared as well. According to coffee in China statista market forecast, Revenue in the Coffee segment amounts to US$8214m in 2019. [citation needed], Chongqing has emerged as the largest domestic trading hub for coffee. [8], Fujian and Hainan mainly grow robusta, while Yunnan grows arabica, with catimor (a caturra-Timor hybrid) as the varietal of choice. [5], Almost all domestic coffee comes from Yunnan, accounting for 98% of production. According to coffee market analyses reported by www.chinabgao, the … In particular, coffee consumption has grown among young Chinese professionals.. So, who drinks this coffee? As a coffee-lover herself, she has spent hours studying and socializing in the various cafes and coffee shops in Shanghai. “There are commonly more young girls with friends,” Yoyo says, specifying that cafes tend to be populated with those in their teenage years and mid-adult life. It has been a busy year for the U.S.-China relationship, so be sure to catch up on all of our programming from it. Although Western chains such as Starbucks, Coffee Bean & Tea Leaf and Whitbread Group 's Costa Coffee undoubtedly dominate the China market, the … Currently, 95% of the coffee produced in China comes from Yunnan Province and over 100,000 tons of coffee are produced annually. Key Points. Coffee culture in Beijing and Shanghai fits the fast-paced cosmopolitan character of those cities. Nevertheless, Starbucks remains a dominant player with nearly 60% of the coffee market share in China. [7] Other provinces where coffee is grown include Fujian and Hainan. China is the lead producer and consumer of tea in the world: in 2014, The Atlantic found China consumes 1.6 billion pounds of tea per year. Coffee Box. Almost all (more than 90%) of China’s coffee is still produced in Yunnan, where Arabica is the sole variety grown. From business meetings at the Starbucks in the upscale area of Xintiandi, Shanghai to multicultural get-togethers at the expat-friendly Baker and Spice on Anfu Road, coffee has become a cultural icon in mainland China. Ninety-eight per cent of the coffee grown in China comes from Yunnan province. Coffee growing in China’s southern Yunnan Province. The Starbucks in the Xintiandi shopping area of  Shanghai had a minimalist, spacious first floor with a populous outdoor seating patio, and a dimly lit second floor with a seating arrangement that invited business engagements, friendly conversations, and individual workers at the long, communal table in the center. The market is expected to … The minimalist design fit well with the millennial crowd the cafe attracted. Joshua Goldstein talks about his new book looking at the history of the recycling industry in China. Founded in 2014, Coffee Box started out as a coffee delivery app for foreign brands … Established in 2002, Hangzhou Yile Vending Manufacturing Co., Ltd. is one of largest privately owned coffee vending operators in China, with 70 staff dedicated to customer service. Though the per capita income in the U.S. is five times higher than that in China, coffee prices in China are even more expensive. An Americano was a steep 28 RMB ($4.17) and a basic flat white was 34 RMB ($5.06). [10] The Chongqing Coffee Exchange was established by the Chongqing Energy Group as a trading platform for both home grown and Southeast Asia sourced coffee. However, they have since expanded throughout the country. More importantly, the emergence of coffee in China represents the new dominance of a previously uniquely Western influence, and coffee itself serves as an exhibition of social status and cosmopolitanism. © 2020 USC US-China Institute. 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