The Current State of Fresh Ground Coffee Market: New-Style Tea Brands Enter the Coffee Race

When Tea Brands Join the Coffee Race

Competition in China's new-style tea market has long spilled beyond the industry's own borders, so tea brands crossing into coffee no longer raises eyebrows. First ChaYanYueSe launched its own coffee brand and opened 5 coffee stores at once. Later, HeyTea invested in the specialty coffee chain Seesaw and in Minority Coffee.

More recently, the coffee chain Monster Tired, which has been making the rounds on social platforms, announced it had completed an angel-round financing worth millions of yuan, with the investor being its market peer Nayuki. As early as the end of 2020, Nayuki rolled out its "Nayuki PRO" store format and added 7 specialty coffees — the moment its coffee business officially began. In September this year, Nayuki invested in AOKKA Coffee and opened its first offline coffee store inside the first Nayuki Life store.

But the true "pioneer" of tea brands entering coffee is CoCo Dou Ke. As early as 2014 it was working with coffee service organizations to build out its coffee business, and in January 2015 it opened its first coffee store at Wujiaochang near Fudan University in Shanghai, focusing on affordable, reasonably priced creative coffee.

Since then the big names have followed one after another, and the tea-versus-coffee crossover battle keeps intensifying. Mixue Ice City & Tea, Shuyi Xiancao, 7FenSweet, and other tea brands have all launched coffee products and brands of their own. In August this year, ChaYanYueSe's new coffee brand "YuanYang Coffee" opened its first 5 stores, formally entering the market.

And long before ChaYanYueSe made its move, Mixue Ice City had already established "Lucky Coffee," anchored in its home province of Henan, attacking the coffee market and officially opening franchise operations. HeyTea had coffee products on its menu as early as 2020, and that same year it partnered with specialty brand %ARABICA on multiple pop-up stores in Shanghai and Guangzhou, blending milk tea and coffee elements. In July 2021 HeyTea invested in Seesaw Coffee, and in June this year it added Minority Coffee to its portfolio.

The Growth Numbers Behind the Gold Rush

According to iiMedia Research, China's coffee market was worth approximately 381.7 billion yuan in 2021 and was expected to reach 485.6 billion yuan in 2022, with consumers exceeding 300 million. The market was projected to keep growing at 27.2% per year — far above the global average of 2% — with total market size forecast to hit 1 trillion yuan by 2025.

Against that backdrop, cross-border entrants keep multiplying. The Tianyancha app shows the number of companies crossing into coffee climbing sharply from 2020 to 2022, from 2 cases in 2020 to more than 10 cases in 2022. They come from every industry — beyond catering, names as large as China Railway and China Post. Their participation has amplified the segment's momentum. As of mid-November, coffee brands had logged 13 financing rounds in 2022, nearly 80% of all financing across the entire coffee track.

Why Tea Brands Keep Coming

For tea brands locked in ferocious competition at home, entering coffee serves both market expansion and brand promotion. Industry insiders describe it as the "optimal choice": whether grabbing an early first-mover advantage or hunting for a second growth curve, coffee's booming prospects, vast untapped consumer base, and high ceiling make it irresistible. Naturally, tea brands want a slice of the pie.

Their arrival brings more than product and marketing ideas. Years of running tea stores have given these brands deep experience in standardized operations, large-scale expansion, and supply chain integration. How they will reshape the coffee market? Let's wait and see!

Image source: Internet

FrontStreet Coffee Recommendation

While the giants fight over market share, the real battleground is still the cup. For an everyday specialty bean that suits newcomers, FrontStreet Coffee's entry-level list covers all the classic origins. Ethiopia: the Natural Huakui (strawberry, passion fruit, jackfruit, melon, honey, florals) and the Washed Guodingding Cooperative lot from Yirgacheffe (jasmine, lemon acidity, berry tones). Brazil: the Cerrado Red Bourbon daily bean (cream, peanut, cocoa) and the Queen Estate Yellow Bourbon (butter, melon seeds, macadamia, almond, sugarcane sweetness — excellent with milk). Indonesia: the wet-hulled Linong Mandheling, fuller and smoother than Blue Mountain with herbal and spice notes, plus the PWN Golden Mandheling, triple hand-sorted for a cleaner, silkier cup with woody and caramel clarity.

Colombia contributes the Huila daily bean, grown above 1500m in the country's premier specialty region, alongside the Sidra and Big Navel lots with their gentle florals and fruit acidity. Costa Rica answers with the honey-processed Blackberry and the raisin-honey Mozart — raisin, blueberry, osmanthus, and rose notes that shine in pour-over, cold brew, americano, or latte. Yunnan offers the Small Bean and the 2013 Typica grown at 1300m (hazelnut, dried apricot, black tea, caramel, ripe plum), and Panama rounds out the list with the washed Boquete Geisha — pure orange-blossom honey character at a fraction of Esmeralda's price.