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Coffee - China - September 2016

“Though the penetration of drip-bag coffee is still low in China, drip-bag coffee has the convenience of instant coffee and the original taste of freshly brewed, and the medium price range between the two. In addition, as its format is similar to traditional Chinese tea bags, consumers could easily adapt to the usage and perceived it as more natural and less processed. Hence, Mintel expects it’d be the next hit for the coffee category.”
– Ching Yang, Research Analyst

This report discusses the following key topics:

  • Opportunities for the rising domestic manufacturers
  • Engage the young consumers
  • The capsule coffee market in China

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Keep up with the growing momentum
              • Figure 1: Best- and worst-case value sales forecast of coffee, China, 2011-21
            • Instant coffee dominates the retail market but is shrinking
              • Figure 2: Coffee retail value market share, by segmentation, China, 2011-16
            • Companies and brands
              • Concentrated market dominated by few players
                • Figure 3: Leading companies in China non-liquid coffee market, by value, 2014 and 2015
              • Winning the capsule coffee category
                • More RTD coffee targets young consumers
                  • The new instant: drip-bag coffee
                    • The consumer
                      • Instant coffee enjoys the highest consumption, followed by RTD coffee
                        • Figure 4: Coffee consumption frequency, by types of coffee, June 2016
                      • More using as an energy boost
                        • Figure 5: Coffee drinking occasion, June 2016
                      • Online channel is crucial for instant coffee and coffee beans
                        • Figure 6: Purchase channel of coffee, by types, June 2016
                      • Most prefer sweetened coffee to black
                        • Figure 7: Consumers’ preference between black coffee and sweetened coffee, June 2016
                      • A regular drink for the older while an indulgence for the younger
                        • Figure 8: Consumers’ attitudes towards coffee, June 2016
                      • Smell is the key
                        • Figure 9: The ideal coffee attributes for Chinese consumers, June 2016
                      • High interest in artisan coffee and coffee with additional health benefits
                        • Figure 10: Consumers’ interest in different coffee innovations, nutrition-related, June 2016
                      • Mintropolitans are sophisticated coffee drinkers
                        • Figure 11: Consumers’ coffee consumption behaviour, by consumer classification, June 2016
                      • What we think
                      • Issues and Insights

                        • Opportunities for the rising domestic manufacturers
                          • The facts
                            • The implications
                              • Engage the young consumers
                                • The facts
                                  • The implications
                                    • The capsule coffee market in China
                                      • The facts
                                        • The implications
                                          • Figure 12: Example of capsule coffee with cream and sugar ingredients, US, 2016
                                      • The Market – What You Need to Know

                                        • Keep up with the growing momentum
                                          • Instant coffee dominates the retail market but is shrinking
                                            • Competition from on-trade channel coffeehouses
                                            • Market Size and Forecast

                                              • Keep up with the growing momentum
                                                • Figure 13: Retail market value of China’s coffee market, 2011-16
                                                • Figure 14: Best- and worst-case value sales forecast of coffee, China, 2011-21
                                              • Consumption per capita growing faster than other major markets
                                                • Figure 15: Non-liquid coffee retail market volume & volume consumption per capita, China, Japan, US and UK, 2011-16
                                            • Market Segmentation

                                              • Instant coffee dominates the retail market but is shrinking
                                                • Figure 16: Coffee retail value market share, by segmentation, China, 2011-16
                                              • Instant coffee: Specialty is more popular than plain
                                                • Figure 17: Instant coffee retail value market share, by sub-category, China, 2011-16
                                              • Rise of RTD coffee
                                                • Figure 18: RTD coffee launched between 2014 and June 2016, by region
                                              • Fresh coffee grows through premiumisation
                                              • Market Drivers and Barriers

                                                • Coffee becoming a routine
                                                  • Rely on coffee for the busier lifestyle
                                                    • RTD coffee premiumisation
                                                      • Figure 19: Percentage of newly launched RTD coffee product with ‘premium’ claim, China, 2014-16
                                                    • Competition from on-trade channel coffeehouses
                                                    • Companies and Brands – What You Need to Know

                                                      • Concentrated market dominated by few players
                                                        • RTD coffee targets young consumers
                                                          • The new instant: Drip-bag coffee
                                                            • ‘Cold-brewed’ moving from on-trade to off-trade
                                                            • Market Share

                                                              • Concentrated market dominated by few players
                                                                • Figure 20: Company share of non-liquid coffee market in China, 2014 and 2015
                                                              • Nestlé also leads the RTD coffee market
                                                                • Figure 21: Company share of RTD coffee market in china, 2015
                                                            • Competitive Strategies

                                                              • Winning the capsule coffee category
                                                                • Figure 22: Percentage of capsule or pod type of coffee launched, Global, 2014-16
                                                              • RTD coffee targets young consumers
                                                                • Figure 23: RTD coffee products targeting young consumers, China, 2015-16
                                                              • International players collaborate with local players
                                                                • Figure 24: The sino-foreign-collaborated RTD coffee products, China, 2015-16
                                                              • Nestlé increases local coffee bean source from Yunnan
                                                              • Who’s Innovating?

                                                                • The new instant: Drip-bag coffee
                                                                  • Figure 25: Top 10 claims on the newly launched coffee products, China, 2014-16
                                                                  • Figure 26: Percentage of drip coffee among the total newly launched non-liquid coffee, China, 2014-16
                                                                  • Figure 27: Product example of drip coffee in China, 2015-16
                                                                • Products premiumisation
                                                                  • Figure 28: Example of premium coffee product, US, 2016
                                                                • Category blurring with coconut water
                                                                  • Figure 29: Example of coconut water coffee, US, 2014-16
                                                                • Foaming coffee
                                                                  • Figure 30: Product example of foaming coffee, Japan and China, 2016
                                                                • ‘Cold-brewed’ moving from on-trade to off-trade
                                                                  • Figure 31: Percentage of cold-brewed coffee in the RTD coffee category, Global, 2014-16
                                                                  • Figure 32: Example products of cold-brewed coffee, US and Indonesia, 2016.
                                                              • The Consumer – What You Need to Know

                                                                • Boosting energy is the main purpose
                                                                  • Most prefer sweetened coffee to black
                                                                    • A regular drink for the older while an indulgence for the younger
                                                                      • Smell is the key
                                                                      • Frequency of Drinking Different Types of Coffee

                                                                        • Instant coffee enjoys the highest consumption, followed by RTD coffee
                                                                          • Figure 33: Coffee consumption frequency, by types of coffee, June 2016
                                                                        • Self-made coffee is still not the mainstream
                                                                        • Drinking Occasions

                                                                          • More using as an energy boost
                                                                            • Figure 34: Coffee drinking occasion, by function, June 2016
                                                                            • Figure 35: Example of coffee products with energy-boosting claim, US and China, 2015-16
                                                                          • More drink at work or study places
                                                                            • Figure 36: Coffee drinking occasion, by location, June 2016
                                                                          • Coffee is not a breakfast drink in China
                                                                            • Figure 37: Coffee drinking occasion, by time of the day, June 2016
                                                                            • Figure 38: Example of coffee products featuring the breakfast occasion, Japan and US, 2015-16
                                                                        • Purchase Channels

                                                                          • Online channel becomes increasingly important for instant coffee
                                                                            • Figure 39: Purchase channel of instant coffee, June 2016
                                                                          • Coffee beans are primarily bought from imported food stores and online
                                                                            • Figure 40: Purchase channel of coffee beans, June 2016
                                                                          • RTD coffee as a result of impulse purchase
                                                                            • Figure 41: Purchase channel of RTD coffee, June 2016
                                                                        • Consumption Behaviour

                                                                          • Most prefer sweetened coffee to black
                                                                            • Figure 42: Consumers’ preference between black coffee and sweetened coffee, June 2016
                                                                          • Domestic coffee has room to improve
                                                                            • Figure 43: Consumers’ attitudes towards coffee beans, June 2016
                                                                            • Figure 44: Consumers’ attitudes towards international and domestic brands, June 2016
                                                                          • A regular drink for the older while an indulgence for the younger
                                                                            • Figure 45: Consumers’ attitudes towards coffee, June 2016
                                                                          • Most are familiar with the different coffee types
                                                                            • Figure 46: Consumers’ attitudes towards different types of coffee, June 2016
                                                                            • Figure 47: Examples of coffee products with the flavour description chart, China, 2015-16
                                                                        • Ideal Coffee Attributes

                                                                          • Smell is the key
                                                                            • Figure 48: The ideal coffee attributes for Chinese consumers, June 2016
                                                                          • Nearly half consumers want some dairy notes in their coffee
                                                                            • Figure 49: The ideal coffee attributes for Chinese consumers, by age, June 2016
                                                                            • Figure 50: Example of RTD coffee featuring creamy and sweet taste, 2016
                                                                          • Older consumers and high earners care about the brand
                                                                            • Figure 51: Consumers who consider an ideal cup of coffee should come from a well-known brand, by age and household income, June 2016
                                                                        • Interested Innovations

                                                                          • Consumers want nutrients beyond caffeine
                                                                            • Figure 52: Example of coffee product with additional health benefits, US, Thailand and Spain, 2016
                                                                            • Figure 53: Consumers’ interest in different coffee innovations, nutrition-related, June 2016
                                                                          • Tapping into the artisan coffee
                                                                            • Figure 54: Consumers’ interest in different coffee innovations, product-related, June 2016
                                                                            • Figure 55: Example of dessert-inspired fresh coffee, US, 2015-16
                                                                            • Figure 56: Product example of RTD coffee containing PPD, Spain, US and Japan, 2016
                                                                          • Fair trade coffee sees opportunity from the top of the pyramid
                                                                            • Figure 57: Consumers’ interest in different coffee innovation, ethic-related, June 2016
                                                                            • Figure 58: Percentage of newly launched coffee products with the ‘fair trade’ claim, global, 2014-16
                                                                            • Figure 59: Product example of fair trade coffee, US and Canada, 2016
                                                                          • Want resealable package but not willing to pay more
                                                                            • Figure 60: Consumers’ interest in different coffee innovation, package-related, June 2016
                                                                        • Meet the Mintropolitans

                                                                          • Sophisticated coffee drinkers
                                                                            • Figure 61: Percentage of consumers who drink the following types of coffee at least once a week, by consumer classification, June 2016
                                                                            • Figure 62: Consumers’ coffee consumption behaviour, by consumer classification, June 2016
                                                                          • High interest in artisan coffee
                                                                            • Figure 63: Consumers who are interested in and willing to pay more for the following coffee innovations, by consumer classification, June 2016.
                                                                        • Appendix – Market Size and Forecast

                                                                            • Figure 64: Value sales of China’s coffee retail market, 2011-21
                                                                            • Figure 65: Volume sales of China’s non-liquid coffee retail market, 2011-21
                                                                        • Appendix – Market Segmentation

                                                                            • Figure 66: Value sales of China’s coffee retail market, by segment, 2011-21
                                                                            • Figure 67: Best- and worst-case retail value sales forecast of RTD coffee in China, 2011-21
                                                                            • Figure 68: Best- and worst-case retail value sales forecast of fresh coffee in China, 2011-21
                                                                            • Figure 69: Best- and worst-case retail value sales forecast of instant coffee in China, 2011-21
                                                                            • Figure 70: Volume sales of China’s coffee retail market, by segment, 2011-21
                                                                            • Figure 71: Best- and worst-case retail volume sales forecast of fresh coffee in China, 2011-21
                                                                            • Figure 72: Best- and worst-case retail volume sales forecast of instant coffee in China, 2011-21
                                                                            • Figure 73: Best- and worst-case retail volume sales forecast of RTD coffee in China, 2011-21
                                                                        • Appendix – Methodology, Definition, and Abbreviations

                                                                          • Methodology
                                                                            • Fan chart forecast
                                                                              • Abbreviations

                                                                              Companies Covered

                                                                              To learn more about the companies covered in this report please contact us.

                                                                              Coffee - China - September 2016

                                                                              US $3,990.00 (Excl.Tax)