Analysis of the current market status and development trends of China's coffee industry in 2019｜Air Catering Exhibition

2019 may be a new year for the coffee industry

In recent months, news about coffee has frequently appeared in major media. First, Heytea and Nayuki launched coffee products, then the two leading companies in the coffee market, Starbucks and Nestle, launched new series of products one after another, and Luckin Coffee, which has the best capital in the coffee field, finally went public in the United States. The latest news is that after Coca-Cola and Vitasoy announced the launch of coffee drinks, Nongfu Spring also joined the melee in the coffee market. After years of relatively stable development, 2019 seems to have become a new year for the domestic coffee industry to rise again.

Market competition

The domestic coffee market seems to have ushered in a new opportunity with this extra-long spring. In addition to existing competitors, several brands that did not previously belong to the coffee beverage field have also announced their entry into the coffee market.

On March 22, Heytea announced the launch of a new coffee drink, which was launched in four stores in Beijing, Shanghai, Guangzhou and Shenzhen. Since soft European bread and pub products had just been launched, this new product launch only attracted attention from fans. In fact, Nayuki Tea, a leading new tea brand like Heytea, also launched coffee products about a month ago, which also did not attract much attention. At this time, the market did not know that this was just the beginning of the resurgence of the coffee world.

In April, several brands announced their entry into the ready-to-drink coffee market, including international beverage giant Coca-Cola and Hong Kong's household beverage brand Vitasoy. The latest news on May 9 was that domestic beverage brand Nongfu Spring also announced that it would launch four new carbonated beverages that combine coffee ingredients.

In addition to these "outsiders", Starbucks and Nestlé, which have been in the coffee industry for many years, have also been making frequent moves recently.

After its peripheral products became more popular than coffee, Starbucks returned to product development. In April this year, it launched eight new products in the "Fun Ice Blend" series. Although the outside world believes that this is a cross-border product targeting the domestic new tea beverage market, there are still three coffee-based drinks in it. And its cold brew series later appeared on the menu again.

Since Nestlé and Starbucks officially joined forces to establish the Global Coffee Alliance in August last year, they launched 24 new Starbucks coffee products including coffee beans, ground coffee and capsule coffee in February this year. In April, Nestlé once again launched 3 new fruit-flavored cold brew coffee products and opened a Beijing-style coffee pop-up store in Beijing.

Luckin Coffee, which has always been a "challenger", will also be listed in the United States. This company, which has the best capital in the coffee circle, will have more funds to support its development, and it has not forgotten to launch new products including coffee. Online, there are more domestic or imported coffee brands competing for this part of the market.

Development prospects

Multiple brands have entered the coffee world, and old brands are busy consolidating their positions, which is bound to set off a new round of competition. The domestic coffee market has been developing for more than 30 years since Nestle Coffee entered China. However, surveys from institutions show that the Chinese market is far from saturated for coffee.

At present, the Chinese coffee market is entering a stage of rapid development. According to the prospectus of Luckin Coffee, the average coffee consumption per capita in China was 6.2 cups in 2018. Compared with developed countries, the average coffee consumption per capita in China is only 1.6% of that in the United States. The market size of China's coffee industry was 56.9 billion yuan in 2018. With the improvement of people's living standards and the increase in the awareness of coffee culture, coupled with the huge demographic dividend, domestic coffee consumption may be stimulated. It is estimated that in 2023, the average coffee consumption per capita in China will be 10.8 cups, and the coffee market size will be 180.6 billion yuan.

Forecast of China's coffee industry market size and per capita coffee consumption statistics from 2013 to 2023

Beijing Youth Daily reporters learned that in addition to the gap between per capita coffee consumption and that of Europe and the United States, the boundaries of the coffee world in the Chinese market are still expanding.

The CBNData report shows that people born in the 1990s and 1995s are the main force of online coffee consumption, with women accounting for more than 60%; second-tier cities have strong demand for coffee consumption, accounting for nearly half of the population, and the growth rate of consumers in low- tier cities is outstanding.

In addition to new consumers and changes in consumption habits, there is another emerging market that supports the expansion of the overall coffee market. This is the rise of afternoon tea consumption in China. According to a survey conducted by an institution, afternoon tea has accounted for 12% of the passenger flow of catering companies in different time periods, which has obviously divided the share of dinner. For some consumers, lunch is a "must-have" and afternoon tea is a "life-saving" service. During this consumption period, 52% of customers are accustomed to food pairing. Coffee is no longer just a refreshing drink at work, but has become a companion to cakes or snacks in casual meals.

Development Hotspots

In fact, if we look back at the new coffee products launched by major brands this year, it is not difficult to find that whether it is freshly brewed products or packaged products, "cold drink" has become their common point. Even the new instant products emphasize "cold brew" and indicate that they can be brewed with cold water.

According to the CBNData report, online "cold drink" coffee has experienced explosive growth in the past two years , especially among young people born after 1995 and 1990, who have become the main consumers of "cold drink" coffee with a higher consumption growth rate than other generations. Young people who do not miss "cold drinks" even in winter will indulge in "ice-free" coffee in the warm spring and summer, and the same is true for drinking coffee.

In addition to cold water brewed coffee, "milk brewed" coffee and "fruit brewed" coffee have also become a trend. Online "milk brewed" coffee has grown by 89% annually, a significant increase. In fact, temperature is just one of the preferences of young consumers. According to a report by market research firm Mintel, 19% of new coffee products in the world in 2017 were ready-to-drink iced coffee. According to data from market research firm Mordor, the scale of ready-to-drink coffee has increased by 31% in the past two years and will reach US$2.643 billion by 2023.

Ready-to-drink coffee can make the younger generation feel relaxed and awake more quickly, especially in the morning and afternoon, and brands are also working hard to innovate to attract young consumers. "The proportion of ready-to-drink iced coffee has increased because young consumers prefer the refreshing taste of this formula."

Mintel wrote in the report, "Ready-to-drink coffee has also proven itself to be a more suitable formula for innovation, with advantages over other hot coffees, giving manufacturers more room to play." Mintel predicts that the average annual growth rate of ready-to-drink coffee in the Chinese market will remain at 20% in the next five years, squeezing out more of the freshly ground coffee market.

With the increasing demand for coffee consumption, how to stand out in a homogenized product environment and create a brand image with distinctive personality and profound culture will be an important issue facing coffee companies. By then, the 9th Shanghai International Aviation, Cruise and Train Food and Beverage Exhibition, which will be held at the Shanghai Hongqiao National Convention and Exhibition Center from May 7 to 9, 2020, will further help coffee companies solve the pain points and difficulties of this industry, and further help coffee companies tap into market potential and expand sales channels.

New opportunities: In order to better promote the development and expansion of the tourism catering market and promote win-win cooperation among tourism catering enterprises, supply enterprises and tourism catering catering companies, Golden Commercial and relevant competent departments will continue to hold the 2020 9th China International Aviation, Cruise and Train Food and Beverage Exhibition at the National Exhibition and Convention Center (Shanghai) from May 7 to 9, 2020. The exhibition will gather nearly a thousand major domestic and foreign tourism catering companies (including catering companies such as aviation, cruise ships, trains, troops, schools, factories, hotels and catering) and tourism catering suppliers and tens of thousands of global professional buyers to participate in the exhibition. Through face-to-face exchanges and communication at the exhibition, the understanding, understanding and friendship between tourism catering suppliers and tourism catering companies' procurement management departments have been enhanced, promoting win-win cooperation between supply and demand. MP:17621958105

Statement: Some of the above content comes from the Internet, and the copyright belongs to the original author