China’s Coffee Consumption Is Changing

This Article At A Glance

1.4 billion people live in China and, while tea has long been the drink of choice, coffee consumption is booming. Carl Sara, China Managing Director, shares his insights into this coffee boom and what it means for roasters and cafés looking to enter the Chinese market.

• Most of the coffees being consumed are not black coffee, but unique mixed beverages developed to meet the interests of the Chinese consumer, many of which feature add-ins like coconut milk, orange juice or a tea base.
• Demand has also changed because new coffee shop models have focused on bringing down the price per coffee as they reach new consumers. 
• Cafes in China are focused on leveraging the delivery model that’s so successful in China and, as a result, many of their cafes mainly function as pick up points for delivery drivers.

China’s Coffee Consumption is Booming

1.4 billion people live in China and, while tea has long been the drink of choice, coffee consumption is changing. “Large swathes of the Chinese consumer are moving quite quickly to coffee,” explains Carl Sara, China Managing Director, “they’re after an interesting and novel drink.” Carl, who has been Managing Director of Sucafina China’s operations since 2021, shares his insights into this transformation.

Coffee Shop Expansion

“Five or 10 years ago, there were only a few cafes in some of the larger cities like Beijing and Shanghai, but now, the number of coffee shops in the smaller cities has increased significantly,” Carl says. “We’ve seen an uptick in people’s interests in coffee-based beverages because some Chinese companies have really worked hard to make those beverages interesting and the coffees more accessible.”

Most of the coffees being consumed are not black coffee, Carl stresses, but unique mixed beverages with add-ins like coconut milk, orange juice and tea. “The average Chinese consumer is a lot more dynamic and a lot less coffee focused than Western consumers,” Carl says. “They’re looking for something relatable but still novel and exciting far more than they’re looking for a caffeine fix. And and they’re much more likely to keep trying new drinks than the average American or European consumer, who has history with their favorite beverage.”

Tea and hot water are still the most popular drinks in China by far, Carl says. This means that coffee shops often offer a wider range of tea-based drinks than cafes elsewhere and that consumers are typically not going to a coffee shop to get their caffeine fix. More often, Chinese consumers are frequenting cafes in search of new flavors and experiences, driving coffee shop chains to innovate and introduce new drink options all the time.

Demand has also increased because new coffee shop models have focused on bringing down the price per coffee. The price of coffee drinks has dropped from 35 to 40 Chinese Yuan (about USD$4.85-5.5) to about 10 Yuan (USD$1.40) per drink today.

Chains Drives Coffee Consumption

The driving forces in coffee consumption in China are chains who are steadily growing their number of cafes across China, Carl explains. They’re operating on scales we don’t typically see elsewhere. A ‘small’ chain has 500 to 1,000 stores. A medium has 5,000 stores and a larger chain has over 15,000 locations.

One of the hallmarks of Chinese coffee shops that make them different is the delivery model. “The delivery model in China is highly efficient,” Carl says. Food delivery is both faster and cheaper in China than in many other places and coffee drinks are a highly ordered item. While there are certainly cafes with beautiful architecture and sitting spaces, most large chain cafes are more like coffee bars designed for a quick coffee pick up via a delivery service than for sitting in. The streamlined design makes these cafes significantly cheaper and faster to build and more effective at delivering low-cost coffee to consumers.

This expansion of coffee consumption in China is good news for the coffee industry. “Compared to other regions where the growth in one company’s business comes at the shrinking of another, Chinese consumers of coffee are new entrants to coffee, meaning business growth for all,” Carl says. Growing coffee consumption means new opportunities for both national and international roasters, as well as coffee producing countries selling their coffee to Chinese roasters and cafes.