Table of Contents
Overview
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- What you need to know
- Covered in this Report
- Excluded
Executive Summary
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- The market
- Growth momentum projected to continue
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- Figure 1: Best- and worst-case retail value sales forecast of coffee, China, 2012-22
- Instant coffee is poised for shrinking share
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- Figure 2: Coffee retail value market share, by segmentation, China, 2012-17
- Key players
- Leading brands challenged by smaller players
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- Figure 3: Company share of non-liquid coffee market in China, 2015 and 2016
- Figure 4: Company share of RTD coffee market in China, 2015 and 2016
- Target zoomed in on young consumers
- Minus claims and additional nutrients to address health needs
- The consumer
- Rise of coffee on premise underpinned by young females
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- Figure 5: Penetration of different types of coffee, July 2017
- Shift from instant and RTD to fresh coffee
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- Figure 6: Percentage of people drinking the following types of coffee once a day or more, July 2017
- Adopting coffee drinking culture as a whole
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- Figure 7: Choice of food paring with coffee, July 2017
- Manual brewing arsenal upgrade in quality as well as in quantity
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- Figure 8: Average types of brewing tools used, July 2017
- Success formula of most consumed RTD coffee brands
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- Figure 9: Correlation between brand attributes and penetration, July 2017
- Milk yes, sugar maybe
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- Figure 10: Interested flavour innovations, July 2017
- What we think
Issues and Insights
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- How can instant and RTD address health needs
- The facts
- The implications
- How to build connections with young consumers
- The facts
- The implications
- Leverage the power of food
- The facts
- The implications
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- Figure 11: Dessert flavoured coffee launched globally, 2016-17.
- Figure 12: Coffee launches with food paring suggestions or recipes, global, 2016.
The Market – What You Need to Know
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- Growth momentum projected to continue
- Premiumisation with more chilled space
- Emergence of small roasters
Market Size and Forecast
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- Robust growth projected to continue
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- Figure 13: Retail market value of China’s coffee market, 2012-17
- Figure 14: Best- and worst-case retail value sales forecast of coffee, China, 2012-22
Market Drivers
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- Dynamic market embrace innovations
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- Figure 15: Percentage of coffee launched in China, 2014-17 (till July)
- Chongqing becomes the next major coffee distribution hub
- Consumption further fuelled by rising coffee machine ownership
- Premiumisation with more chilled space
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- Figure 16: Average price of drinks launched in 2016, by sub-category, by storage
- Figure 17: RTD coffee launched, by storage type, China 2014-17
Market Segmentation
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- Instant coffee is poised for shrinking share
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- Figure 18: Coffee retail value market share, by segmentation, China, 2012-17
- Favour for milky note fuels demand for flavoured instant coffee
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- Figure 19: Instant coffee retail value market share, by sub-category, China, 2012-17
- RTD thriving yet competitive
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- Figure 20: RTD coffee drinks launched by new entrants, China, 2017
- Figure 21: Percentage of cold brew among global RTD coffee launches, 2014-17
- Burgeoning small roasters tapping into fresh coffee retail
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- Figure 22: Uncle Bean Coffee Roasters’ products on Tmall
- Figure 23: Lutianjia’s products sold on selective e-commerce platforms
Key Players – What You Need to Know
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- Leading brands challenged by smaller players
- Target focused on young consumers
- Minus claims and additional nutrients to address health needs
Market Share
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- Dominant leading players are losing share of non-liquid coffee market
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- Figure 24: Company share of non-liquid coffee market in China, 2015 and 2016
- Leading RTD coffee brands challenged by smaller players
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- Figure 25: Company share of RTD coffee market in China, 2015 and 2016
- Nestlé sets eye on Chinese online shoppers
- JDE restructuring business in Asia
Competitive Strategies
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- Local brands aim to win young consumers
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- Figure 26: Local brands strategies to target young consumers. China 2015-17
- RTD price meeting half way
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- Figure 27: RTD coffee products launched in China, 2017
- Engage with coffee lovers through community building
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- Figure 28: David Choice’s community management
Who’s Innovating?
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- Coffee hybrid drinks
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- Figure 29: Examples of newly launched coffee hybrid drinks, China and global, 2016-17
- Plant based solution
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- Figure 30: New launches of plant based coffee, Global, 2016-17.
- Natural claims to address health concern
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- Figure 31: Product claims* of RTD coffee launched 2014-17, China
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- Figure 32: New launches of coffee with minus claims, Global, 2016-17
- Temperature assigned
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- Figure 33: Launches of coffee products can both be served hot and cold, China, 2017.
- Communication thorough packaging
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- Figure 34: Examples of innovative packaging with plain quotes, China, 2017
- Craft instant coffee through subscriptions
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- Figure 35: Sudden Coffee as an example of craft instant coffee through subscription, US, 2017
The Consumer – What You Need to Know
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- Rise of coffee on premise driven by young females
- Shift from instant and RTD to fresh coffee
- Adopting coffee drinking culture as a whole
- Success formula of most consumed RTD coffee brands
- Cold brew has yet to take off
Segment Penetration
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- Rise of coffee on premise
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- Figure 36: Penetration of different types of coffee, July 2017 & May 2016
- Cross consumption increases with fresh coffee drinker
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- Figure 37: Penetration of different types of coffee, by coffee user types, July 2017
- Young females’ outstanding appetite for coffee
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- Figure 38: Penetration of different types of coffee by gender and age, July 2017
Consumption Frequency
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- Convenient in-home usage drive volume consumption
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- Figure 39: Coffee consumption frequency by type, July 2017
- More fresh, less instant and RTD
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- Figure 40: Percentage of people drinking the following types of coffee once a day or more, July 2017
- Drip bag coffee better fit consumers in their 30s
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- Figure 41: Percentage of consumers who drink the following types of coffee once a week or more, by age groups, July 2017
Food Pairing with Coffee
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- Adopting coffee drinking culture as a whole
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- Figure 42: Choice of food paring with coffee, July 2017
- High earners more open to coffee-pairing food choices
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- Figure 43: Choice of food paring with coffee (selected), by monthly personal income, July 2017
- Consumers drinking homemade coffee seldom drink alone
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- Figure 44: Choice of food paring with coffee, by users of different types of coffee, July 2017
Brewing Method
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- Automation rules
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- Figure 45: Penetration of coffee brewing methods, July 2017
- Manual brewing arsenal upgrade in quality as well as in quantity
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- Figure 46: Average types of brewing tools used, July 2017
- Figure 47: Cross penetration of coffee brewing methods, July 2017
RTD Coffee Brands Perception
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- Building awareness does not translate to purchase
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- Figure 48: RTD coffee brand awareness and penetration, July 2017
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- Figure 49: RTD coffee brand penetration, by age group, July 2017
- Safety and authenticity drives usage
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- Figure 50: Correlation between brand attributes and penetration, July 2017
- Figure 51: Examples of RTD coffee drinks claiming additional health benefits, Global, 2016-17
- Opportunities with building emotional attributes
Interested Flavour Innovations
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- Milk yes, sugar maybe
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- Figure 52: Interested flavour innovations, July 2017
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- Figure 53: Interested flavour innovations among milk flavour advocates vs total, July 2017
- Figure 54: Examples of salty coffee, China and Global, 2015-17
- Performance enhancement remains priority
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- Figure 55: Café Pele’s OOH campaign, Brazil, 2015
- Healthy formula can draw crowds
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- Figure 56: Examples of fresh coffee gaining extra health benefits from herbal ingredients, Global, 2016
- Cold brew has yet to take off
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- Figure 57: Cold brew innovations, US, 2016-17
- Figure 58: Interest in cold brew, by demographics, July 2017
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- Figure 59: Cold brew coffee products with education message on their packages, global, 2016-17
Meet the Mintropolitans
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- Advocates for fresh coffee
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- Figure 60: Penetration of different types of coffee, by consumer classification, July 2017
- Extra desire for ingredient upgrade
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- Figure 61: Interested flavour innovations, by consumer classification, July 2017
- Figure 62: Milan Gold’s selected single source coffee series, China
Appendix – Market Size and Forecast
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- Figure 63: Value sales of china’s coffee retail market, 2012-22
- Figure 64: Volume sales of China’s non-liquid coffee retail market, 2012-22
- Figure 65: Best- and worst-case retail volume sales forecast for non-liquid coffee in China, 2012-22
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Appendix – Market Segmentation
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- Figure 66: Value sales of China’s coffee retail market, by segment, 2012-22
- Figure 67: Volume sales of China’s coffee retail market, by segment, 2012-22
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Appendix – Methodology and Abbreviations
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- Methodology
- Fan chart forecast
- Abbreviations
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