2024
8
China On-premise Coffee Consumption Consumer Report 2024
2024-11-08T06:01:51+00:00
REPDB71E9DE_1AB4_420C_9A2D_CE7BE3B677A5
3695
177202
[{"name":"Coffee","url":"https:\/\/store.mintel.com\/industries\/drinks\/coffee"},{"name":"Foodservice","url":"https:\/\/store.mintel.com\/industries\/foodservice"}]
Report
en_GB
This report looks at the following areas: Market outlook and growth prospects for the on-premise coffee market over the next five years Noteworthy marketing activities and new product trends in…

China On-premise Coffee Consumption Consumer Report 2024

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This report looks at the following areas:

  • Market outlook and growth prospects for the on-premise coffee market over the next five years
  • Noteworthy marketing activities and new product trends in the on-premise coffee market
  • Trends in on-premise coffee consumption and comparisons with other coffee segments
  • Factors influencing consumer choice and repeat purchases of on-premise coffee products
  • Consumers’ ideal price ranges for on-premise coffee products
  • Segmentation of the on-premise coffee drinkers (cluster analysis)

The rapid expansion of domestic coffee chains is reshaping the on-premise coffee market landscape. Refined operations and the development of specialty coffee can help brands better navigate competition in a gradually slowing market.

Bernie Gao, Analyst, China Insights

Market Definitions

This report explores consumer habits regarding on-premise coffee consumption and their interest in related innovations while also examining their perceptions and attitudes toward different purchasing channels. On-premise coffee refers to freshly made coffee beverages available through on-trade channels, including cafés, convenience stores, full-service restaurants, fast-food outlets, tea houses, bakeries and dessert shops. It excludes ready-to-drink coffee beverages and instant coffee brewed in homes and offices.

Definition of segmented group:

Heavy drinkers are respondents who consume once a day or more

Collapse All
  1. Executive summary

    • Key issues covered in this Report
    • Definitions
    • What you need to know
    • The market
    • Expanding consumer base and stable drinking habits drive further growth in the on-premise coffee market
    • On-premise coffee market enters a natural shakeout phase, with store growth expected to slow further
    • Market factors
    • Companies and brands
    • Concentration in China’s on-premise coffee industry increases, with domestic chain brands rapidly expanding
    • Key trends in marketing activities
    • Key trends in new products
    • Product examples reflecting the above trends
    • The consumer
    • The penetration rate of on-premise coffee continues to rise, with the gap between different income groups narrowing
    • Graph 1: penetration rate of coffee segments, 2023 vs 2024
    • Special coffee drinks help attract a wider audience
    • Graph 2: menu item preferences, 2024
    • ‘RMB15’ serves as the price threshold for classic coffee drinks across city tiers, with special coffee drinks boosting average customer spending
    • Focusing on the product itself is more likely to resonate with consumers than emphasising value for money
    • Graph 3: product choice factors, 2024
    • Amid the trend of intentional spending, brand values and fundamental services are key to driving repeat purchases
    • Graph 4: repurchase factors, 2024
    • Domestic coffee chains are rapidly closing the gap with international chains, with an emerging trend toward diversified purchasing channels
    • Graph 5: consumption channel, 2024
    • Clearer personal beverage preferences can be fulfilled through personalised options
    • Graph 6: behaviours towards on-premise coffee – drink size and product choice, 2024
    • Graph 7: behaviours towards on-premise coffee – roast degree and caffeine content, 2024
    • Segmentation of on-premise coffee consumption (cluster analysis)
    • Graph 8: purchasing behaviour, cluster analysis, 2024
    • Issues and insights
    • What we think
  2. The market

    • Market size and forecast
    • Further expansion of the consumer base supports the stable development of the on-premise coffee market
    • Rapid store expansion in lower-tier cities boosts overall store count growth
    • Market factors
    • Following a rapid recovery in 2023, total foodservice retail sales are steadily increasing
    • More favourable policies are expected to promote the development of the foodservice industry, including on-premise coffee
    • Expanding into lower-tier markets could serve as a revenue growth driver for on-premise coffee brands
    • The growth of milk coffee and black coffee drinkers is moderate, while those who drink special coffee drinks are steadily increasing
    • Graph 9: on-premise drink consumption trend – drunk more, 2023-2024
  3. Companies and brands

    • Market share
    • The on-premise coffee market is increasingly concentrated on leading brands
    • Domestic chain coffee brands continue to expand their stores, with regional specialty coffee brands achieving cross-regional development
    • International coffee brands explore development models in the Chinese market
    • Instant coffee brands continue to strengthen their offline businesses
    • Marketing activities
    • ‘Low-price vouchers’ to drive traffic and ‘combo vouchers’ to promote new products
    • Collaborating with an iconic game to enhance the brand’s popularity
    • Leverage the Olympics to organise offline themed activities
    • Focus on trendy sports to enhance a healthy and active brand image
    • Brands use coffee as an entry point, catering to the broader lifestyle of their audience
    • New product trends
    • The fruit-flavoured coffee trend persists, offering an enhanced taste with a sparkling mouthfeel
    • More tea bases are being integrated into on-premise coffee products to enhance aroma
    • Using or selling Yunnan coffee beans supports the sustainable development of China’s coffee origins
    • Incorporating chocolate into coffee menus adds a uniquely rich flavour
    • A more varied and enriching ‘coffee + food’ experience caters to a broader array of scenarios
  4. The consumer

    • Consumer trends
    • Low-price strategies are driving deeper penetration of on-premise coffee among lower-income groups
    • Graph 10: on-premise coffee penetration rates, by household monthly income, 2023 & 2024
    • Graph 11: coffee segment penetration rates, 2023 vs 2024
    • Coffee drinkers aged 30 to 39 remain the core consumer group
    • Graph 12: consumption frequency, 2024
    • Graph 13: consumption frequency, proportion of heavy drinkers, 2023 vs 2024
    • Study/work and leisure occasions are essential, but breakfast and workout times should not be overlooked
    • Graph 14: drinking occasion, 2024
    • Graph 15: drinking occasion, percentage difference between heavy drinkers and the overall group, 2024
    • Menu items preference
    • Special coffee drinks have the broadest audience, followed closely by espresso drinks
    • Graph 16: menu items preference, 2024
    • Special coffee drinks are expected to attract more lower-tier consumers
    • Graph 17: menu items preference – special coffee drinks, by age and city tier, 2024
    • The promotion of specialty coffee can focus on various drinking temperatures
    • Graph 18: menu items preference – selected items, by drinking temperature (net), 2024
    • Graph 19: menu items preference – selected items, by city tier, 2024
    • Engaging young consumers with juice or ice blended beverages helps lay the foundation for coffee consumption
    • Graph 20: menu items preference – selected items, by gender and age, 2024
    • Graph 21: menu items preference, by female aged 25-29, 2024
    • Ideal price range
    • Special coffee drinks help boost average transaction value
    • RMB15 has emerged as the threshold for pricing classic coffee products across various city tiers
    • Graph 22: selected ideal price range – dairy coffee, by city tier, 2024
    • Graph 23: selected ideal price range –black coffee, by city tier, 2024
    • Consumers aged 30-39 and those in the midwest are more willing to pay a premium for innovative new products
    • Graph 24: selected ideal price range – special coffee drinks, by age, 2024
    • Graph 25: selected ideal price range –special coffee drinks, by city tier and region, 2024
    • Product choice and repurchase factors
    • Compared with value for money, the drinking experience resonates more with consumers
    • Graph 26: selected product choice factors, by age, 2024
    • Graph 27: product choice factors, 2024
    • Explore customised brewing process solutions to meet the needs of discerning drinkers
    • Graph 28: selected product choice factors, by region, 2024
    • Graph 29: product choice factors, by consumers of espresso and specialty coffee, 2024
    • Recognition of brand values surpasses service and product, making it the primary factor driving repeat purchases
    • Graph 30: selected repurchase factors, by age, 2024
    • Graph 31: repurchase factors, 2024
    • Leverage differentiated co-brand activities and marketing content to further enhance heavy drinkers’ loyalty
    • Graph 32: repurchase factors, by heavy drinkers, 2024
    • Consumption channel
    • Foreign chain coffee shops have the highest penetration rate, while women show greater trust in specialised coffee brands
    • Graph 33: consumption channel, 2024
    • Graph 34: consumption channel, by gender, 2024
    • Heavy drinkers show no significant differences in their choice of chain brands, but they prefer independent coffee houses
    • Graph 35: selected consumption channel, by heavy drinkers, 2024
    • Graph 36: selected consumption channel, by monthly household income, 2024
    • Convenience and the development of specialty coffee have become key directions for expansion in Tier 1 cities and eastern regions
    • Graph 37: selected consumption channel, by city tier, 2024
    • Graph 38: selected consumption channel, by region, 2024
    • Purchasing behaviour
    • Heavy drinkers tend to prefer larger cup sizes and black coffee
    • Graph 39: behaviours towards on-premise coffee – drink size and product choice, by consumption frequency, 2024
    • Graph 40: behaviours towards on-premise coffee – drink size and product choice, 2024
    • Enhance the convenience of services through digital features to encourage repurchase
    • Graph 41: behaviours towards on-premise coffee – brand loyalty, 2023 vs 2024
    • Young men are potential consumers of specialty coffee
    • Graph 42: behaviours towards on-premise coffee – roast degree, by selected gender and age, 2024
    • Graph 43: behaviours towards on-premise coffee – caffeine content, by selected gender and age, 2024
    • Further enhance the convenience of accessing on-premise coffee in Tier 1 cities
    • Graph 44: behaviours towards on-premise coffee – category and product choice, 2024
    • Graph 45: behaviours towards on-premise coffee – preference for portable coffee and black coffee, by city tier, 2024
    • Consumer segmentation
    • On-premise coffee consumption segmentation (cluster analysis)
    • Graph 46: behaviours towards on-premise coffee, cluster analysis, 2024
    • Group definitions and characteristics description
    • In addition to chain brands, flavour heads also prefer independent coffee shops
    • Graph 47: consumption channel, by consumer segmentation, 2024
    • Flavour heads likely drive high average transaction values, while emphasising caffeine content can attract value seekers
    • Graph 48: product choice factors, by consumer segmentation, 2024
  5. Issues and insights

    • Refine the coffee menu: broaden coffee offerings and expand into related categories
    • Modify the proportions of different segmented products on the menu as needed to increase variety
    • Special coffee drinks and cold brew coffee: contributors to premium pricing
    • Non-coffee beverages: draw inspiration from dairy and tea drinks to better compete in the broader on-premise beverage market
    • Seasonal product sets: offering a range of products to meet diverse needs
    • Emphasising the ‘sense of value’ in specialty coffee: baristas, ambiance and service
    • The spirit of craftsmanship drives the development of specialty coffee
    • Designing the overall space and service process based on product characteristics
    • Elevate the experience and expand the business by focusing on coffee flavours
    • A comprehensive immersive experience gives consumers a clearer sense of ‘value’
    • Move away from price wars and focus on competing in quality
    • Relying exclusively on low prices is not a sustainable path to development
    • Showcasing a reliable supply chain and consistent product quality helps boost brand credibility
    • Showcase the supply chain in membership activities to boost interaction and strengthen brand loyalty
    • Exploring the origins and highlighting the stories enables consumers to fully immerse themselves in the experience
  6. Appendix – Market size and forecast, methodology and abbreviations

    • Market size and forecast – value sales
    • Market size and forecast – number of outlets
    • Methodology
    • Abbreviations

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