Brewing a love for coffee in traditionally tea-drinking China

Ironically, I found a passion for coffee in the traditionally tea-drinking nation of China.

I still love tea, and have tried all kinds of wonderful new varieties thanks to my connoisseur colleagues and friends.

But coffee owns my heart. And that’s not only due to its intoxicatingly high caffeine content.

The ongoing rise of coffee culture in China reflects many current market trends in the country’s surging service industry. An increasing appetite for foreign goods, tastes and brands is continuing to grow among China’s latest consumer power: the fashion-conscious urban youth.

Euromonitor notes the development in China’s cafe and bar scene in recent years has been “driven by the ever-enlarging loyal consumer base of coffee lovers in China, consisting of mainly young consumers and white collar workers”.

The industry’s further growth potential, especially in lower-tier cities, is monumental.

Data from the International Coffee Organization shows China consumed only 0.1 kilogram of coffee per capita in 2017, far behind nearby South Korea at 3.2 kg.

That is after a staggering 752 percent growth in fresh coffee consumption since 2003, showing how the market is catching onto another leading trend in China — premiumization.

Artisanal cafes are springing up across the country, and overseas brands have been expanding aggressively for years, making their way into lower-tier cities nationwide.

Starbucks claims it opens a new coffeehouse in China every 15 hours, hoping the nascent market will catch up with the United States’ 300 cups per capita annual consumption. One tactic it has employed to build up a loyal fan base in the country was opening its Starbucks Reserve Roastery in Shanghai in 2017. Another was teaming up with Alibaba for the domestic tech powerhouse’s data and delivery expertise.

However, local competitors could be driving the brand’s best-laid plans off course. Luckin Coffee and Coffee Box, among others, have more delivery-focused operating models. As new entrants, they are less focused on profits as they pursue breathtaking expansion.

That means this fledgling competition can undercut the prices of established overseas brands. They’re also pulling their weight in the online-to-offline logistics war, for now, as these local brands can get coffee to busy, caffeine-craving office workers within 10 minutes for a lower fee than foreign competitors.

According to CNN Business, Luckin Coffee plans to have 4,500 stores by the end of 2019, driving it ahead of its main target, Starbucks, which currently has more than 3,000.

But the coffee trend is also moving into people’s homes, as premiumization becomes an everyday trend. Another Euromonitor report notes that “With increasing consumer sophistication and rising household incomes, more consumers of fresh coffee are trading up to fresh ground coffee pods.”

This highlights the major downside of China’s growing coffee consumption — the resulting, rampant unrecyclable waste production.

Ease and convenience for the consumer, in the form of single-use coffee pods and cups, leads to lasting devastation for the environment.

The coating on disposable coffee cups makes them next to impossible to process at normal paper recycling facilities. As such, these materials break down into small components and find their way into water systems, doing untold damage to ecosystems and our own health.

But, there are alternatives. Biodegradable coffee pods and stylish on-the-go mugs also offer environmentally friendly options.

Of course, that means taking a break from work to go to a nearby cafe or to make the coffee oneself rather than ordering delivery. But, a 10-minute break, as our smoking colleagues will tell us, can make all the difference in productivity at the workplace anyway.

With all these battles, brands and beverages vying for coffee-lovers’ attention, it’s no wonder the market is buzzing.