Coffee May Not Dethrone Tea, But China Could Be the Largest Coffee Consuming Market By 2020

on June 19 2014 | in Lifestyle Trends | by | with No Comments

coffee, China, Chinese coffee market

Though Chinese citizens drink only a meager five cups of coffee each year, one town—Fushan—boasts a much higher mean. The town, which lies in Hainan’s Chengmai County, averages 200 cups per person per year, only 40 less than the world average.

The market in Fushan is thriving due in part to coffee farms that originated in the 30s. Foreign companies, roughly 100 of them, have also begun to market their brands in Fushan as the middle class there continues to show a captive interest in the caffeinated drink.

Other significant coffee hubs include the provinces of Yunnan and Sichuan. In fact, ECNS reports that Yunnan accounts for 90 percent of China’s coffee bean growth, though more than half of their annual yield is exported.

In the 1980s foreign brands like Starbucks and Nestle made their way to China. These name brands, as well as Blenz, Maxwell House and Barista Blends, have influenced the popularity of coffee in big cities like Beijing and Shanghai. While they have also reached the Hainan and Fujian provinces, for most towns, coffee, especially foreign coffee, is still a largely Western concept.

So what is really driving the recent Chinese coffee growth? The answer is one you might have already guessed; the same younger generations that have embraced a number of predominantly Western commodities and brands.

“To them, Starbucks represents a luxury and fashionable experience. Many of them are attracted by this brand rather than the coffee itself. They can tell what kind of tea is good, but they can’t do so with coffee,” said Annie Huang, the general director of the Food and Dining Culture Committee of the Guangdong Food Culture Research Institute.

The Chinese coffee market is in need of some refinement before homegrown beans can outsell foreign ones. In order to advance local brands, companies are going to have to improve their planting techniques and brewing methods, as well as establish a baseline of industry standards.

Regardless of local and foreign competition, with the right amount of preparation, now is a good time for companies to jump into the Chinese coffee market. Coffee consumption has risen at an annual rate of 15 percent. That’s a growth rate nearly seven times more than the global average.

Even though coffee is currently trending, the beverage does still come second to another caffeinated favorite. Ji Ming, chairman of the China Coffee Association Beijing, said that given the historical, traditional and cultural significance of tea, it is unlikely that China’s national drink will be dethroned anytime soon. That said though, with the numbers as they are, China is set to be the largest coffee consuming market by 2020.

 

image credit: susanne nilsson

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