Coffee culture steaming hot in China

Coffee has become a lifestyle choice for urban Chinese consumers, with multiple types of the brewed beverage entering the fray, said a recent report from consultancy CBNData.

In a survey polling 2,000 consumers in May from China's first- and second-tier cities, over 60 percent said they drink three cups of coffee per week or more. Such cities, exemplified by Shanghai and Hangzhou, Zhejiang province, usually indicate higher levels of economic development and disposable income.

The study found that first-tier city dwellers consume 326 cups of coffee on an annual basis, a level comparable to that of developed economies. The result dwarfed 280 in Japan, was comparable to 329 in the United States and was lower than the Republic of Korea's 367.

The findings are surprising on the surface because it wasn't like this until 1988 when Nestle first sold instant coffee in China, with tastes entirely new to most Chinese. And it was in 1999 that Starbucks began offering fresh ground coffee to local consumers who were by then becoming increasingly accustomed to evolving consumption lifestyles.

"Chinese millennials and Gen Z are particularly open-minded and hungry for new experiences," said Wei Yutong, a CBNData analyst. "This is a major factor in the Chinese coffee boom seen throughout the last decade. Millions of young coffee aficionados have been searching for new types of coffees and cafes to try."

Like many consumer goods, online purchases saw the fastest growth, registering 60 percent sales growth in the past year and a 50 percent surge in the number of buyers.

Among them, freeze-dried coffees and capsule coffees posted higher growth than coffee concentrates or drip coffees, despite the first two varieties' average higher retail prices. Female shoppers were three times more inclined to try out novel coffee products than conventional ones like instant coffee packages.

Oat milk and other plant-based dairy alternatives are fast rising to become the new darlings of coffee lovers who either suffer from lactose intolerance or simply want healthier options. Nearly 90 percent of those who choose oat milk are female customers, the survey found.

Sophisticated buyers are also taking a closer look at the origins of coffee beans. While established sources like Brazil and Vietnam still lead the way, those from China, Costa Rica, Jamaica and elsewhere are quickly gaining popularity among consumers seeking novel experiences with the beverage.

For offline coffee shops, customers are anticipating a more comprehensive overall experience. The study found that 72 percent of white-collar workers typically go to chain stores for cost-effective drinks that are convenient and consistent in quality.

Meanwhile, other avant-garde coffee lovers normally aspire to the uniqueness discovered in standalone boutique shops, or immersive experiences both fun and photogenic.

Also, delivery services have become a staple of life in China. The strategy to support a delivery service for single cups of low-price coffee was immediately accepted by local customers. Nearly all major chain stores have adopted delivery models, while concerns that transport may affect coffee taste have been kept at bay.

"With deliveries in place, you do see this rising awareness of freshly ground coffee being promoted as an affordable yet necessary daily pleasure," Wei said.

Coffee has quickly become an iconic venture capital-investing target in China. Of late, tech company ByteDance is smelling opportunities in brewing, backing coffee chain Manner Coffee, which is known for its cost-effective deals and minimalist sleek design of shops.

Following suit is Tim Hortons, a Canadian coffee shop that has thrived in China since debuting in 2019. Its Chinese unit, which has also been injected with funds by Tencent, has vowed to open some 1,500 outlets in the country.