Insight – Coffee’s growing popularity in China brews export opportunities

Austrade

China’s increasingly urbanised and affluent population is drinking more coffee than ever before. From 2018–19 to 2020–21, coffee consumption in China increased by 140% (Source: USDA 2022).

Coffee culture suits the increasingly fast-paced city lifestyle that many in China aspire to.

Implications for Australian exporters

Chinese coffee imports increased 144% in 2021 to A$1.12 billion. Malaysia, Vietnam, Japan, Guatemala and Colombia were the top five suppliers. They accounted for 57% of total Chinese coffee imports (Source: GACC 2022).

Despite having a relatively small market share for roasted coffee, Australian grown and roasted coffee is renowned for quality. It has a loyal and niche clientele in China. The flat white, or Ao Bai (Australian White), is becoming increasingly popular in Chinese coffee shops.

Australian exporters seeking to enter the Chinese coffee market should read Austrade’s China market profile. You can also refer to the Manual of Importing Country Requirements for green and roasted coffee beans to China.

Figure 1: Chinese coffee imports 2018 to 2021

Figure 1 Chinese coffee imports 2018 to 2021

Source: GACC 2022

Coffee consumption in China

Tea has traditionally dominated hot-drink consumption in China. The entry of large coffee retailers in the late 1990s coincided with rapid urbanisation and large demographic shifts. In 1980, around 80% of China’s population lived in rural areas, where coffee consumption was rare. Now, almost two-thirds of China’s population live in urban areas, with much broader food and beverage options (Source: China Policy 2021).

China is now one of the world’s fastest growing coffee markets. As of April 2022, China has approximately 110,000 coffee shops (Source: Reuters 2022). In Chengdu, China’s third largest coffee-consuming city, one coffee shop opened per day in 2020 (Source: GCTN 2021). China is home to more than 5,400 Starbucks stores. Local competitors, such as Luckin Coffee, are also expanding their footprint.

Coffee is still considered a luxury item. Coffee prices are high compared to other food and beverage products. For example, in 2021, the average cost of a latte was A$4.05 (Source: World Coffee Portal 2022), while the average cost of milk tea or fruit juice was A$1.50 per cup (Source: China Highlights 2021).

Coffee consumers in China:

  • are between 20 and 40 years old
  • are white collar workers in “first tier” cities (such as Beijing, Shanghai, Guangzhou and Shenzhen)
  • have a bachelor’s degree or above
  • have a high income (Source: Deloitte 2022).

Coffee production in China

China is a mid-sized global coffee producer. Most production is consumed domestically. Chinese coffee consumption is increasing at a faster rate than domestic production. This has created more opportunities for coffee exporters around the world.

The USDA expects China’s coffee production to decline to 1.75 million 60kg bags in 2021–22. Chinese coffee producers are finding coffee production less profitable and are switching to other crops. China’s imports of coffee are forecast to reach 4 million 60kg bags in 2021–22 (Source: USDA 2022).

Figure 2: Chinese imports, production, and consumption of coffee (measured in million 60kg bags of coffee)

Figure 2 Chinese imports, production, and consumption of coffee (measured in million 60kg bags of coffee)

Source: USDA 2022

Table 1: Chinese coffee import suppliers

Country

2018

2019

2020

2021

Average (2018-2021)

Malaysia

$130m

$156m

$180m

$188m

$164m

Vietnam

$174m

$122m

$138m

$167m

$150m

Japan

$17m

$30m

$68m

$106m

$55m

Guatemala

$24m

$17m

$33m

$99m

$43m

Colombia

$37m

$34m

$44m

$87m

$50m

Brazil

$30m

$36m

$40m

$83m

$47m

Ethiopia

$21m

$28m

$31m

$81m

$40m

Italy

$36m

$42m

$49m

$49m

$44m

Switzerland

$14m

$19m

$33m

$33m

$25m

Indonesia

$27m

$26m

$29m

$30m

$28m

Australia (13th)

$3m

$973k

$2m

$16m

$6m

Other

$134m

$136m

$147m

$187m

$139m

(Source: GACC 2022)

Resources

The Manual of Importing Country Requirements has import requirements for green and roasted coffee beans to China.

Austrade has more information about the Chinese market.

The USDA has recently published an extensive report on the Chinese coffee market.

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