Why China Has Become The World’s Fastest Growing Coffee Market

on May 26 2015 | in Lifestyle | by | with No Comments

china become fastest growing coffee market

Though China has long been a tea-drinking country, coffee is catching on among the country’s young, which has led China to become the fastest growing coffee market in the world.

Despite the fact that Chinese drink only an average of four cups of coffee per person per year, the sheer number of people in the country means the market is huge, and it’s growing quickly, according to The Guardian.

International chains are taking over in China. Starbucks, which first entered China in 1999, plans to double its number of shops in China to more than 3,000 by 2019. Costa Coffee, which has 344 shops in China, plans to have 900 in the country by 2020.

To attract Chinese customers, coffee shops are adjusting their products to Chinese tastes, including tea-based drinks and sweet blended drinks. The Starbucks in Xintiandi in Shanghai offers a Green Tea Java Chip Frappuccino and a green-tea flavored cake.

Along with the big chains, independent coffee shops are also popping up. Sumerian, which is in Shanghai’s Jing’an district, is owned by Dave Seminsky who favors unsweetened, un-blended drinks.

“We’ve held true to staying true to coffee. I don’t have bags of sugar and lots of milk hanging around,” Seminsky said.

Though Seminsky acknowledges that it has been hard to get Chinese coffee drinkers to change their habits, Sumerian aims to provide a premium experience through roasting his own fresh coffee beans and providing a better in-store experience for customers.

Despite the growth of China’s coffee market, coffee is still a drink that is out of reach of many. At the Xintiandi Starbucks, a medium latte sells for around 30 RMB (US$4.80). The average monthly wage in Shanghai is only around 5,890 RMB (US$949), making coffee a luxury.

Much of the coffee in China is imported, though that is quickly changing. More and more of China’s coffee is being grown in the southern province of Yunnan, where coffee has been cultivated on a mass-scale since 2008.

“In the past five years, the production volume has increased steadily from 60,000 tons per year to nearly 120,000 tons,” said Hu Lu, the deputy secretary of the Coffee Association of Yunnan.

As Yunnan has transformed from a tea-growing province to a coffee-growing province, sustainability has become an issue. Coffee is a water-intensive crop, and much of the coffee in Yunnan is sun grown, which uses even more water and fertilizer.

To combat the sustainability issue, Starbucks buys only shade-grown coffee from Yunnan as part of the Coffee and Farmer Equity (C.A.F.E.) standards they adopted in the province in 2011.

“The C.A.F.E. practices program is designed to address social and environmental issues on the ground in coffee producing regions,” said the company.

Only around 30 percent of Yunnan’s coffee is consumed domestically. As Yunnan begins to produce better quality beans, and more Chinese begin drinking coffee, that should change.

image credit: susanne nilsson

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