For millennia, drinking tea has been an important part of Chinese culture. However, times are changing.
China is slowly becoming a coffee-drinking nation, as consumption is growing at an incredible 15% annually, as opposed to the global rate of 2.2%.
Despite the Covid-19 pandemic, cafés in China have had continued success. In 2020 alone, the city of Chengdu saw a new coffee shop open every day, bringing the total number of cafés in the city to over 4,000.
Read on to understand more about coffee consumption behaviour and emerging trends in China.
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China’s developing coffee culture
Coffee consumption in China is on the rise, particularly among the younger generations.
A report by Deloitte suggests Chinese coffee drinkers are predominantly white-collar workers between 20 and 40 years of age. These consumers are mostly educated, have high levels of disposable income, and live in “top-tier” cities.
In China, cities are divided into four different tiers: tier one cities such as Beijing and Shanghai are considered to be the largest, wealthiest, and most populous cities in the country.
Interestingly, the same report finds Chinese consumers are increasingly dependent on coffee for physiological and psychological reasons. In particular, they turn to coffee to re-energise and relieve stress at work. When they do so, they tend to have higher expectations and preferences for better quality coffee.
Chinese millennials and Gen Z, meanwhile, are generally more curious and open to new experiences. As a result, they will often seek out new cafés and ways of drinking coffee.
Region-based consumption behaviour and preferences have also developed within the country. For example, consumers in Shanghai enjoy new concepts, flavours and experiences, while those in Guangzhou and Shenzhen tend to care more about pricing and quality.
This extensive diversity has seen various coffee trends emerge in China.
The rise of drip coffee bags
Over recent years, the Chinese market has seen an increase in the sales of drip coffee bags.
Drip bags originated in Japan during the 1990s. They are small pouches of ground coffee held in folded paper stands that are suspended over cups.
Drip coffee bags offer easy brewing as the coffee can be prepared by pouring hot water directly over the pouch.
Due to their convenience and quality, drip coffee pouches have become a popular option for those who are pressed for time.
Furthermore, an article by China’s leading online retailer JD.com, suggests black coffee is becoming a lifestyle choice for a large number of consumers.
Office workers, and young mothers in particular are drinking black coffee for its supposed health benefits. In addition to being sugar-free, black coffee is believed to help boost metabolism and help promote weight-loss.
Given their popularity, many brands are now offering drip products of their own.
For instance, global food and beverage manufacturer Nestlé, and local beverage company Nongfu Spring have both introduced drip coffee bags to the Chinese market.
The growth of on-demand coffee apps
For an average Chinese consumer, almost every aspect of their daily lives is managed through their mobile phone. This includes paying bills, buying train tickets and ordering food.
As a result, Chinese coffee consumers are naturally more receptive towards using online delivery apps.
A company that has taken China by storm through its app-based ordering system is Luckin Coffee. Founded in late 2017, the company opened over 4,000 outlets across the country within two years. This growth is a result of the company’s discounting strategy, as well as its delivery and pickup model.
Although Luckin Coffee has since been involved in a scandal, the brand successfully used technology to provide consumers with a convenient and seamless buying experience.
This has only been furthered by the Covid-19 pandemic, which saw food delivery platforms around the world experience substantial growth.
With the increased need for on-demand services, coffee brands such as Starbucks have also looked to expand its digital reach in China. Starbucks partnered with local food delivery platform Meituan to broaden its mobile order and delivery services. They now offer it across four different online platforms, including Alipay, Koubei, Amap, and Taobao.
This suggests on-demand coffee apps are here to stay.
The popularity of ready-to-drink: cold brew & flavoured coffees
Chinese consumers’ demand for pre-packaged drinks has surged in recent years.
The country’s ready-to-drink (RTD) tea and coffee segment is predicted to reach a market size of $26.9 billion by 2027.
One company that has recently entered the RTD space is UK coffee chain Costa Coffee. They made their debut in 2020 with their Black Americano and Classic latte drinks, and have continued to launch a series of cold brew coffee offerings.
Costa International’s Chief Operating Officer, Shakir Moin identified China as a priority market, and plans to focus on expanding its RTD presence in tier one and two cities.
At the same time, leading coffee brand Nescafé, which is owned by Nestlé, also aims to attract young Chinese consumers with a range of innovative flavoured RTD coffee.
So far, the company has launched its Sakura Soufflé Latte, Sakura Plum Latte and lemon-flavoured black coffee, to name a few. Additionally, Yili and Mengniu, the top two dairy producers in China, have also ventured into the RTD coffee market.
Yili launched its own coffee beverage brand called Sunrelas, while Mengnui has added a cold brew coffee latte to its product line.
Overall, the coffee industry in China has remarkable potential, and it is likely to see continuous growth in coming years. This expanding market reinforces the importance of sustainable packaging materials.
As more consumers demand fresh, high-quality specialty coffee, roasters must ensure their packaging options preserve and protect their product until the point of consumption.
Furthermore, roasters and coffee shop owners must make sure this market growth does not negatively impact the environment by providing recyclable takeaway cups and coffee packaging.
At MTPack Coffee, we offer a range of sustainable coffee bags for specialty coffee roasters. Made with green materials including rice and kraft paper, as well as recyclable linings made from PLA and LDPE, our packaging options are fully biodegradable, compostable and biodegradable.
