CCTV: Coffee Market Booming! 300 Million Consumers!

Professional Coffee Knowledge Exchange

China's Coffee Market: Rapid Growth and Transformation

By recent industry estimates, China now has roughly 300 million coffee consumers. As the ranks of coffee lovers keep expanding, the industry is showing real vitality in the Chinese market and has become a "good business" in the eyes of investors. Well-known companies from many different industries are actively moving into coffee.

China is now home to 166,000 coffee-related enterprises, of which more than 22,000 were newly registered between January and September 2022 — a growth rate of 36.4%. Surveys also suggest that 91.4% of consumers view a brand more favorably when it adds Chinese-style flavors to its coffee products. The sector is expanding fast, and the domestic coffee market is rising with it.

There used to be a saying in the industry: "six losses, three break-evens, one profit" — of every ten stores, six lost money, three broke even, and only one turned a profit. But with accelerating urbanization and rising living standards, China has gradually become a major coffee-consuming country. The industry has started generating real profits and, in recent years, has been the fastest-growing coffee market in the world.

Competition in coffee has always been fierce, with businesses seemingly either opening cross-industry stores or preparing to. Since 2020, giants from other sectors — Li-Ning, China Post, Huawei, Tongrentang, Sinopec, and NIO among them — have all crossed over into coffee, a clear sign of how hot the sector is.

Types of Coffee Products in the Market

By consumption pattern, coffee products fall into three main categories: instant coffee, freshly ground coffee, and ready-to-drink coffee — with instant holding the largest share. Take SATURNBIRD as an example: although the company has existed for only 7 years, it has become an internet-famous brand that shows up constantly in coffee reviews and recommendations across social platforms.

Instant coffee owes its dominance to cost-effectiveness and convenience. For drowsy office workers and students, it saves a trip to a cafe or a delivery order, meets high-frequency demand, and costs less — making it the obvious everyday choice.

Freshly ground coffee may currently trail instant in market share, but it has by far the greatest growth potential. It is now one of China's fastest-growing categories: according to an iResearch report on the freshly ground coffee industry released in 2022, the market is expected to reach 190 billion yuan by 2024. As the consumer base grows, so does the demand for quality — fueling the steady opening of more offline coffee shops.

Meanwhile, ready-to-drink coffee is thriving in its own right amid consumption upgrading. It wins consumers over with convenient purchase scenarios, higher cost-effectiveness, and crowd-pleasing flavors. It may not match freshly ground coffee in quality, but nothing else is more convenient: no cups, no brewing — just twist off the cap and drink. Instant caffeine, zero fuss.

The Youth and Coffee Culture

Today's coffee shops and young consumers are in a relationship of mutual selection. Quick-service coffee stores design their interiors and packaging to cater as closely as possible to young people's aesthetics; whether you prefer light-luxury minimalism, street-cool, retro, or the Instagram-famous look, you'll easily find a shop to match on online platforms.

Young people choose coffee for many different reasons, and brands are winning them over in their own distinctive ways. This generation has become the driving force behind consumption upgrading and the new economy, and China's coffee culture is getting younger by the day. Whoever wins over young people, it seems, wins the future.

FrontStreet Coffee Recommendation

With millions of Chinese consumers discovering coffee every year, many are ready to move from instant to something better. FrontStreet Coffee's entry-level single origins are a great starting point. The Ethiopia Guji washed lot from the Guji cooperative brings jasmine florals, lemony brightness, and berry notes — a vivid introduction to what specialty coffee can taste like.

If bright, fruity coffee isn't your style, FrontStreet's Brazil Cerrado Red Bourbon offers a smooth, balanced cup with cream, peanut, and cocoa notes that most drinkers can appreciate right away. For a true bargain daily driver, the FrontStreet Brazil "Queen Estate" lots add higher growing altitude, rare Yellow Bourbon genetics, and layered nut and sugarcane sweetness — excellent black or with milk.