China Looking to Import Coffee as Demand Brews Stronger

Published 2022년 5월 30일

For MY 2021-22, China’s coffee imports are expected to reach USD 16 billion, a YoY increase of over 5%. The higher imports are driven by growing demand for coffee in the metropolitan areas of the country. China produces very small amounts of coffee and relies heavily on imports from countries like Vietnam, Brazil, and Guatemala to meet its domestic demand. The Chinese market is currently brewing strong, giving opportunities to large coffee-producing countries to expand their sales and reach in the Chinese market.

Demand for coffee in China has grown tremendously over the past three decades. Many global coffee producers and aggregators like Nestlé and Starbucks are building their setups in different metropolitan states of the country. In addition to this, local Chinese coffee brands like Lian Coffee, Luckin, Yongpu, Seesaw, Manner, and SEngine are also making a mark in the coffee market. The majority of the Chinese coffee consumers reside in first-tier cities like Beijing, Shanghai, Guangzhou, and Shenzhen and are between the ages of 20 and 40 years old. Most of them have an international-level higher education with increasing income levels, leading most to consume anywhere between two to three cups of coffee per week. The USDA has projected that as disposable income in China rises, the number of coffee consumers in the country could reach over 350 million, with female consumers accounting for nearly 65 percent of all coffee purchases.

China produces very small amounts of coffee domestically and relies heavily on imports to meet the demand. The country produces less than 2% of the global coffee production, within selected areas of the country. Coffee production is expected to fall to 1.75 million 60 kg bags in marketing year (MY) 2021-22, which runs from October 2021 to September 2022. Many coffee farmers in the country are finding coffee production less profitable and are switching to other crops. The country is expected to import 4 million 60 kg bags of coffee as demand in second and third-tier cities for coffee drives growth and expansion of domestic coffee consumption. The USDA projects that coffee imports will reach nearly 16 billion USD, a YoY increase of 5% over MY 2020–21.

Looking at the preferences of Chinese coffee consumers, 70% of the time the consumers prefer instant coffee, and then the remaining is shared by freshly ground coffee and ready-to-drink coffee, with 20% and 10% respectively. Coffee consumption in China is a relatively new trend compared to more mature markets like the US, Japan, and Europe, but the rate of growth of China’s coffee demand is much higher. Consumers in first-tier and second-tier cities have shown the most sustained growth in coffee consumption, and it is expected that the trend will continue in the coming years. This gives an opportunity to coffee-producing countries, especially those that specialise in instant coffee, to expand their markets in China.