China's coffee market has entered a stage of rapid development. Analysis of the competitive landscape of the coffee industry

China Business Information Network: "Coffee" is one of the three major beverages in the world, and is the main beverage popular in the world along with cocoa and tea. It is rich in protein, crude fiber, crude fat, caffeine, etc. Because of its unique mellow taste and refreshing and exciting effects, it has gradually become an indispensable daily drink for modern people. Coffee occupies an important position in global trade and is one of the symbols of Western culture.

Coffee beans go through the steps of green bean processing, roasting, extraction, and cooking to become a drink. Depending on the consumption method, coffee can be divided into instant coffee, ready-to-drink coffee, and freshly ground coffee.

Currently, the Chinese coffee market is entering a stage of rapid development. Therefore, in the past two years, Starbucks has been continuously consolidating its market position in China by accelerating store openings, deploying high-end markets, and strengthening the coffee supply chain.

The consumption of coffee in China has been growing steadily from 2014 to 2018. In 2014, the total coffee consumption was 20.7714 million tons, a year-on-year increase of 34%; in 2017, the total consumption was 34.8095 million tons, a year-on-year increase of 29%. As the Chinese coffee market gradually matures and enters a period of integration, the growth rate will decline.

Data source: China Business Industry Research Institute

Judging from the current competition landscape of my country's coffee industry, instant coffee dominates the Chinese coffee market. According to data, instant coffee accounts for 71.8% of the market, followed by freshly ground coffee, which accounts for 18.1% of the market, and ready-to-drink coffee, which accounts for 10.1% of the market.

Data source: China Business Industry Research Institute

In the field of instant coffee, domestic products of foreign brands have a monopoly in the mid- and low-end market segments, with coffee giants such as Nestle and Maxwell House holding more than 80% of the market share. Chinese local coffee companies represented by Hougu Coffee and Chunguang Food are in the transition period from raw bean planting and rough processing to self-branded coffee products. At present, the deep processing capacity of products is still relatively low, and brand awareness needs to be improved. It is difficult to compete directly with foreign brands in terms of product prices and sales scale. The high-end market segment is mainly occupied by imported products of foreign brands.

Major instant coffee brands and prices in the Chinese market

Data source: China Business Industry Research Institute

In the field of freshly ground coffee, imported products of foreign brands still dominate the high-end market segment. However, Chinese local coffee companies represented by coffee towns import fine coffee beans from all over the world, and then roast, package and sell them domestically. Their products have certain price advantages in the mid- and low-end market segments, and are gradually expanding their market share.

Major freshly ground coffee brands and prices in the Chinese market

Data source: China Business Industry Research Institute

In the coffee chain sector, local coffee companies represented by Shangdao Coffee have occupied a considerable market share by virtue of their first-mover advantage and channel advantages. Foreign brands represented by Starbucks have come from behind and taken the lead in the "first-tier cities" and "Italian coffee" segments by virtue of their brand image and differentiated competition strategies. In recent years, some emerging coffee chain brands have gradually broken the monopoly of Starbucks and Shangdao Coffee on the market by virtue of their precise market positioning and unique business models, driving the chain coffee market to develop in a more diversified direction.

Number of stores and prices of major freshly ground coffee chain brands in the Chinese market

Data source: China Business Industry Research Institute

With the improvement of people's living standards and the growing awareness of coffee culture, coupled with the huge demographic dividend, my country's coffee industry is generally on the rise. In addition, domestic consumers' favorability towards coffee is constantly improving. my country's coffee market has shown great potential and will have great development in the next decade. The huge coffee market has laid the foundation for coffee takeaway.