China Food

2021, the “new” war of trillion coffee market

In the past 40 years, China’s coffee market has experienced several changes. In the eyes of a thousand people, there are a thousand ways to drink coffee. The story of coffee in 2021 continues.

Starting a day’s work with a cup of coffee has become the choice of more and more migrant workers. Words that were unfamiliar before, such as trendy ear hanging, coffee liquid and freeze-dried coffee, will become familiar in 2020.


In the early 1980s, Maxwell and Nestle entered China and dominated the instant coffee market for more than ten years. Subsequently, Starbucks brought freshly ground coffee, and other international brands entered the market one after another.


China’s Chinese mainland coffee market has not been affected even by the 2020 epidemic. Sinopec has crossed the border coffee shop. McDonald’s McAfee also said that it will invest 2 billion 500 million yuan in the next three years and have more than 4000 stores in mainland China. Starbucks opened 259 new stores in China and set up a record in 2020, even the Chinese time-honored Tong Ren Tang also opened coffee shops. They sell health coffee and so on.


With the continuous rise of post-90s and Z generation consumers, new products with high appearance value are emerging in recent years. In 2020, representative brands of Wangsheng coffee, such as Sandun and a half, yongpu coffee and Shicui, will also emerge from online channels.


Nestle once accounted for 71.8% of China’s instant coffee market, and it has been monopolized for a long time. It did not expect that it would be squeezed out of a large market share by new domestic brands so soon.


High quality and convenience have gradually become the mainstream of Chinese coffee market.

The secret of Shicui, yongpu and Sandun

When the coffee “goes out” from the store, the online bonus is more obvious. During the epidemic period, new coffee brands ushered in a wave of consumption and flow.


According to the data, the search volume of tmall’s coffee category increased by 80% during the epidemic period, and the sales volume increased by 50% – 60%. After the epidemic, it achieved a growth of over 100%.

Representative three and a half meals, completed five financing in less than two years; yongpu coffee also obtained two financing in 2020. These new coffee brands make coffee “re upgrade”, mainly based on freeze-dried powder and concentrate, known as the boutique instant.


Sandun and a half focuses on the freeze-drying instant solution technology of “soluble in any liquid within three seconds”; yutianchuan uses normal temperature coffee liquid capsule to make the circle; yongpu’s most representative is the original flash extract espresso liquid, which can achieve 10 times concentration of non-destructive flavor; Shicui uses high color value hanging ear coffee to make the circle, which has a sense of ceremony and convenience.


Behind the popularity of these brands, the diversification of coffee consumption is reflected. New packaging has increased sales by 200%, and new consumers are willing to try.


Before, lucky’s continuous expansion of stores greatly educated consumers and brought a lot of imagination to the coffee industry. In addition, black coffee has the effect of burning fat, improving metabolism and removing edema, and the new products have high face value. They are highly sought after by weight-loss people and fitness people, especially by the post-90s and post-95s.

The iteration of technology has promoted the new growth of coffee online, and the characteristics of “convenient brewing and all things are soluble” have greatly reduced the space and time limit for drinking coffee, so that the three and a half meals can be organically integrated into the life of consumers and the sense of ceremony can be extended.


From the occupational point of view, office workers are the main consumers of black coffee, and new coffee brands also aim at their fragmented consumption patterns.


High value and convenient, new brands are also very “play”. For example, three and a half meals will find the “Navigator” who produces high-quality content in various channels, mail them products and listen to suggestions. There is also a “return plan”, where consumers can exchange empty boxes for coffee or other peripheral products.


Feng Weidong, the managing partner of Tiantu investment, once said that from instant solution to high quality, it is an excellent instant solution. Both quality and supply efficiency, instant coffee is more social benefits.


Santong and a half, yongpu, yutianchuan, etc. accurately cut into the segmentation field, and attracted new consumer groups with innovation to meet the demand of real-time scene.

Offline stores make a comeback

Compared with instant coffee, the market prospect of freshly ground coffee is broader.


Although lucky has been deeply involved in “scandals” one after another and closed its stores constantly, the latest financial data shows that 60% of its stores have made profits, and its revenue has also achieved double-digit growth in the first three quarters of 2020. At present, lucky still has a strong influence in new product development and popular marketing. After the launch of thick milk latte, it also triggered a round of product follow-up.


Recently, lucky coffee released a recruitment plan for new retail partners, which is open to 22 provinces and autonomous regions, which also means that its stores will further expand in the future.


According to the report of coffee consumer market insight in 2020 released by Aurora big data, nearly 65% of consumers said that they would drink coffee every week, and about 40% of them drank coffee 3-5 times a week; more than 50% of the main people who bought coffee were white-collar workers and students, with strong purchasing power.


According to incomplete statistics of online public information, domestic Internet coffee start-ups have announced a total financing amount of nearly 3 billion yuan in recent years, involving 30 VC / PE companies.


In 2020, capital will pay more attention to the coffee market, mainly focusing on online brands. According to public information statistics, a total of 11 enterprises completed 13 financing events last year. Among them, 7 brands focus on the online, while Novartis, TIMS, icah and manner focus on the offline.



Interestingly, Tencent has invested in Tim Hortons China, a Canadian national coffee brand. Tims coffee said it plans to open more than 1500 stores in China within 10 years.

Data shows that 80% of sales of tims China come from wechat apps. The first E-sports themed coffee shop jointly built by tims and Tencent also opened in Shanghai in November 2020, providing users with a new life scene of “E-sports + coffee” with strong social attributes.


Lu Yongchen, chief executive officer of tims Coffee China, disclosed at the end of last year that in the stores currently open, TIMS coffee has achieved overall profits. Previously set store plan, is expected to be shorter. At present, the number of members of tims coffee is nearly 2 million, and the monthly repurchase rate is 40%. The proportion of offline and online was 8:2 or 7:3, but now it is nearly 5:5.


Affected by the epidemic, Starbucks has a hard time, so opening a shop in China has become its life-saving straw.

Last year, Starbucks accelerated the closing of its stores in the United States and Canada, and at the same time increased the speed of opening its stores in China. Starbucks expects to add 2150 new stores and 1100 new online stores in the next fiscal year, of which more than half of the new store expansion plans are in China, where it is expected to open 600 stores.


Known as “the largest dark horse coffee brand in 2020”, m stand, a local high-end boutique coffee chain brand in China, recently completed a round of financing of over 100 million yuan led by CMC capital and followed by Challenger capital. With creative products and trendy personality taste environment, the M stand brand is valued at 700 million yuan.


Li Weicai, partner and chief operating officer of CMC capital, said, “m stand, on the basis of high enough product quality, meets the demand of middle and high income consumers for brand power in lifestyle products, and meets the upgrading demand of relatively mature coffee market; at the same time, m stand Stand is a representative of quality and young offline lifestyle space. Its design meets the needs of commercial space for high-quality experience format, and has a very clear value creation. “


Manner, another coffee brand in Shanghai, also ushered in an outbreak in 2020. According to the new store information on its official micro blog, manner opened at least 22 new stores last year, and the total number of local stores in Shanghai alone has exceeded 80, basically covering the major business districts.


In addition to enterprises focusing on coffee, McDonald’s sub brand “maccoffee” is speeding up; new tea brands like Xicha and Naixue’s tea have also launched coffee drinks; the first travel home hotel group has also launched the first “like coffee” to explore hotel space, etc.

Sinopec cross border, oil coffee waiting to break out

While refuelling, there is No. 98 coffee. Sinopec’s coffee is very firm.


As early as September 2019, Sinopec launched its own coffee brand, easyJet coffee. On December 22, 2020, Sinopec easyJet announced the establishment of a joint venture with internet coffee brand “Lian coffee”, which is mainly engaged in the coffee business of gas station convenience stores. On the same day, Yijie coffee’s first store in Beijing was officially opened at Beijing Longyu Yuquan gas station.


It is understood that after the establishment of the joint venture, the two sides will jointly establish an operation team with coffee professional ability and Internet innovation ability to be responsible for the overall operation of “easyJet coffee”.


There is also a clear division of labor between the two. Even coffee outputs a complete operation team for easyJet coffee, which is mainly responsible for the background construction, product development and design, and personnel training of easyJet coffee, while Sinopec easyJet is responsible for the site support and brand operation of easyJet coffee.



According to the list of China’s top 100 convenience stores in 2020 issued by China business chain association, Sinopec’s easyJet Sales Co., Ltd. has 27699 convenience stores, ranking first on the list.


With more than 27000 stores and the largest number of convenience stores in China, easyJet can be said to have the most powerful front warehouse network in China. This has become the strong competitiveness of easyJet in promoting the new retail strategy, which provides the possibility for the nationwide promotion of easyJet coffee.


In contrast, even coffee, which was founded in 2014, was greatly impacted by lucky. It once fell into the storm of closing stores in June last year, many offline stores were closed, and the coffee business also stagnated. Until we got a new round of financing, we were able to return to online channels again.


However, even coffee did not give up offline. In addition to Sinopec, which is looking for a new growth point, the plan of easyJet coffee is very clear: in the future, “easyJet coffee” will open stores in easyJet convenience stores one after another, and continue to lay out a new retail mode of “delivery + consumption in store” for gas station convenience stores.


Gas station coffee is a new model in China, but it is mature abroad. According to the data, on average, 64% of the revenue of gas stations in the United States comes from convenience stores, while 35% – 40% in Europe. In some developed countries, coffee in gas station convenience stores has almost become a standard.

In contrast, in China, the proportion of non oil revenue of gas stations is very low. Sinopec has more than 30000 gas stations, with non oil revenue of 27.6 billion yuan in 2017, only 3% of the retail revenue of gasoline and diesel. At present, the non oil business of most domestic gas stations only contributes 5% – 10% of the gross profit rate of the whole gas station.


In recent years, “two barrels of oil” have made great efforts in non oil business. Today, the coffee business is becoming a new growth point for many oil companies’ convenience stores. For example, PetroChina Kunlun Hakka has developed its own chain coffee brand, Hakka coffee. To provide consumers with coffee, bubble water, pure tea, fruit shake, fruit tea and other drinks, the price is between 18-33 yuan; multinational oil company BP also launched its own coffee brand “wild bean” in China.


Ke Yifan, executive vice president and retail business president of shell brand group, also said in an interview that shell’s preferred convenience store can sell about 250 million cups of coffee every year, “the profit margin of coffee is much higher than that of oil”.

New story of Chinese coffee market

In addition to instant and freshly ground coffee, instant caffeine has a more convenient purchase scene, higher cost performance and lower threshold taste, and the experience is also very hot.


Euromonitor International data shows that by 2022, the global ready to drink coffee market is expected to grow by US $3.1 billion, faster than bottled water and soft drinks.

In addition to Internet coffee companies, Coca Cola, Wahaha, Nongfu Shanquan, Xicha, Yili and Mengniu have successively announced the launch of coffee drinks.


In 2018, China’s per capita coffee consumption will be 6.2 cups, and it is estimated that China’s per capita coffee consumption will be about 10.8 cups by 2023.


The average growth rate of global coffee consumption is 2%, but China’s coffee consumption is growing at an alarming rate of 15% every year. Moreover, the demand of Chinese consumers for coffee is increasing, and the consumption is far more than the production.



According to the data of International Coffee Organization in London, the market scale of China’s coffee industry will reach 300 billion yuan in 2020 and 1 trillion yuan in 2025. China’s coffee market is entering a stage of rapid development, and the rise of new brands is faster.


So far, the coffee market has experienced three waves: the first wave is Nestle coffee; the second wave is hand ground coffee represented by Starbucks and Costa; now the coffee market is entering the third wave: driven by multi-level consumer demand, the coffee market has become more diversified. With the change of infrastructure, the coffee industry is also undergoing restructuring.


Despite the competition for instant coffee in the early years, the rapid rise and growth of coffee in the Chinese market occurred in the past five years. If we say that the milk tea industry is now tripartite, today’s coffee market is still in contention.

In the past 40 years, China’s coffee market has undergone several changes. In the eyes of a thousand people, there are a thousand ways to drink coffee. The story of coffee in 2021 continues.

Author: Coco; source: tidesight, reprint authorized. Joining the community: Cherry (wechat: 15240428449); business cooperation: Amy (wechat: 13701559246). high quality original investment and financing events of 2020 inventory sustainable wind direction of 2020 inventory major events of 2020 inventory series major events of the year-end inventory hidden weapons of the strongest innovative concept beer Pepsi nutrition incubator ten shortlisted? Daily new products: Isee trends | editor’s | reader’s

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