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Coffee Enters Daily Life in China, Coffee Industry Becomes a Significant Business Opportunity

In coffee shops, homes, and offices, a cup of coffee in hand has become a common sight in eastern China. With rapid economic development, more and more people are drinking coffee. In addition to international coffee brands that offer convenient takeout and stable quality, independent coffee shops focusing on drinking environment and unique characteristics are gradually emerging. At the same time, China has also begun to produce high-quality local coffee. This beverage, popular worldwide, is catching up with the long-standing tea culture, and its charm cannot be underestimated.

The number of coffee drinkers in China has increased significantly in a short period, mainly in first-tier cities in the east. According to data provided by market research company Euromonitor International, in 2016, the average person in China drank 3 cups of coffee per year. Compared with South Koreans' 377 cups, Americans' 363 cups, and Britons' 250 cups, there is a considerable gap, which also means enormous growth potential. Whether it's Starbucks or Dunkin Donuts, both are ambitious and actively planting flags on China's coffee map.

In a Bloomberg report, the head of Cofco International's coffee division stated: "Chinese people are gradually developing the habit of drinking coffee at home and in the office. By 2021 and 2022, China's middle-class population will reach 450 to 600 million people." Starbucks, which has been in China for nearly 20 years, has long seen the growth of this class. CEO Kevin Johnson mentioned in a Reuters report: "The rapidly increasing middle class leads to increased business opportunities; the market will become larger." He also expects that in the next 20 years, Starbucks will expand from the current 2,800 stores to 10,000, a scale that will approach the U.S. domestic market.

Not just Starbucks, but chain donut shop Dunkin Donuts also has similar plans. Despite past setbacks in entering the Chinese market with only 34 locations nationwide, Dunkin Donuts has drawn up a blueprint to establish 1,400 branches within 20 years. "Among all beverage consumers, although coffee drinkers are relatively few, they are growing rapidly and are expected to surpass tea consumers," said Dunkin Donuts CEO Nigel Travis.

Independent Coffee Shops Are Gradually Rising

In addition to the expansion of major brands, Euromonitor International analyst Yu Limin also made another observation. "We've noticed that many small brands and independent coffee shops are rising, with explosive growth in the number of registrations." The rise of independent coffee shops in China, to some extent, also represents that chain coffee shops can no longer fully satisfy Chinese consumers. They have begun to seek coffee that differs from what chain stores offer.

According to Fresh Cup magazine, a coffee shop owner named Max has carved out a place in Beijing by making special-flavored coffee. He combines flavors like blue curaçao, peach, mango, and rose with espresso, milk, and sugar to create complex-flavored drinks. This strategy has been very successful: Max's coffee shop has moved twice due to insufficient space, but customers' loyalty is deep - they follow wherever he moves.

Quality of Domestic Coffee Beans Improves

China produces 138,000 metric tons of coffee beans annually, approximately the total annual production of Kenya and El Salvador. However, although China's coffee production is high, it's difficult to directly associate coffee with China; this is because in the past, Yunnan's coffee beans were not of high quality and were mostly used as raw material for instant coffee. But in the eyes of Samuel Gurel, CEO of Torch Coffee Roasters, who has long focused on coffee farmer technology, China already has the capability to produce excellent specialty coffee beans.

Gurel and a team from the non-profit organization Coffee Quality Institute experimented with 40 coffee processing methods on a donor's land in Yunnan. According to research by the Coffee Quality Institute, low-altitude production areas are more suitable for dry processing, medium-altitude areas are suitable for honey/pulped processing, and high-altitude beans are suitable for washed processing. The coffee beans they grew are ideally dried and shelled using the dry processing method.

Note 1: Coffee Quality Institute is a non-profit organization that helps coffee farmers internationally produce high-quality coffee beans and also helps them improve their quality of life.

Specific processing based on the characteristics of beans at different altitudes has yielded very sweet results. "The cupping score of coffee beans rose from 80 to 86 points, which is truly exciting. It's rare to find Asian coffee beans that score so high. They were very surprised when they learned the beans came from Asia because it contains rich fruit aromas rarely found in Asian beans. With the improved quality of coffee beans, we have reason to raise the selling price."

Similar Coffee Development Processes in Mainland China and Taiwan

The current coffee trend in mainland China actually has similarities to the path Taiwan once took. Teacher Han Huaizong, who has carefully studied coffee and authored books such as "Specialty Coffee Studies" and "Long Live Taiwan Coffee: 8 Major Producing Regions and 54 Quality Estates in Taiwan that Fascinate Coffee Masters," clearly elucidated Taiwan's coffee history in his book "Learning from Coffee Masters."

Taiwan has been greatly influenced by Japanese and American coffee cultures. Coffee was introduced during the Japanese colonial period, and corporate coffee cultivation was established, laying the foundation for Taiwan's coffee cultivation industry. During the US aid period, the instant coffee culture brought by stationed troops greatly influenced Taiwan, with instant coffee becoming the mainstream. At the same time, coffee shops like Fengda Coffee chose Japanese slow-roasting methods and siphon brewing to present coffee with low acidity and a sweet-bitter taste. American instant coffee and Japanese dark-roast coffee coexisted in society, each with its own supporters.

In the 1990s, smaller-scale coffee operators began to import their own roasting machines, moving toward in-house roasting. In 1998, Starbucks expanded extensively in Taiwan, establishing its position as a coffee leader. During this period, many coffee enthusiasts, mainly university students, also started roasting their own beans, adding diverse aspects to specialty coffee. After 2000, Taiwan officially entered the third wave of coffee, emphasizing individuality through light roasting, terroir, latte art, and cupping. Light-roast coffee shops increased, self-roasting coffee shops became more prosperous, and coffee could even be easily purchased from convenience stores.

Taiwan has a high density and variety of coffee shops, with a sharp increase in the professionalism of coffee artisans, coupled with improved quality of locally grown coffee beans. Now, coffee consumers in mainland China are also transitioning from drinking instant coffee to consuming chain coffee. With the promotion of specialty coffee, it's only a matter of time before Chinese consumers can enjoy high-quality domestic coffee beans.

In January 2018, Chinese officials will hold the first Coffee Forum in Pu'er City, Yunnan, bringing together about 300 professionals in the coffee field to share coffee trends, brewing techniques, coffee quality, and more. Whether through expanded development or specialization, China's coffee landscape is bound to become increasingly exciting.

Recommended Domestic Coffee Bean Brands

FrontStreet Coffee's roasted domestic coffee beans - Yunnan Small Grain Typica Coffee - have full guarantees in both brand and quality. More importantly, they offer extremely high value for money, with each 227-gram package priced at only about 69 yuan. Calculating at 15 grams of coffee beans per cup, one package can make 15 cups of coffee, with each cup costing only about 5 yuan. Compared with the dozens of yuan per cup sold in coffee shops, this is undoubtedly a conscientious recommendation.

FrontStreet Coffee: A roastery in Guangzhou with a small shop but diverse bean varieties, where you can find various famous and lesser-known beans, while also providing online store services. https://shop104210103.taobao.com

Important Notice :

前街咖啡 FrontStreet Coffee has moved to new addredd:

FrontStreet Coffee Address: 315,Donghua East Road,GuangZhou

Tel:020 38364473