Table of Contents
Executive Summary
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- The market
- Fresh coffee and RTD coffee will be main driving forces
- Key players
- Nestlé becomes a much stronger leader
- JDE acquired Super coffee and has gained market share
- Uni-President and Suntory lose shares in RTD area
- The consumer
- Coffee drinkers tend to try different types
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- Figure 3: Penetration of different types of coffee, China, July 2018
- Higher consumption frequency and no difference between tiers
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- Figure 4: Coffee consumption frequency, China, July 2018
- Instant for working days; freshly-made for weekends
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- Figure 5: Coffee drinking occasion, China, July 2018
- “Minus” claims are more likely to be counted as premium features
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- Figure 6: Opportunities for RTD coffee premiumisation, China, July 2018
- Drip bag coffee manufacturers need to update the bag itself
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- Figure 7: Barriers of drinking drip bag coffee, China, July 2018
- Coffee is becoming more important, and consumers want to learn more
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- Figure 8: Attitudes towards coffee, China, July 2018
- What we think
Issues and Insights
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- More innovation and upgrade on the “bag” itself
- The facts
- The implications
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- Figure 9: Seesaw’s drip bag coffee offerings in its Tmall official store, China, 2018
- Figure 10: Tasogare’s sakura box, China, 2018
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- Figure 11: Douban drip bag coffee’s paper bag, China, 2018
- Capsule coffee targeting the young with guidance on choice
- The facts
- The implications
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- Figure 12: Caferica claims that its capsules work on Nespresso’s machine, 2018
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- Figure 13: Tasogare’s drip coffee with detailed taste analysis on product’s Tmall page, China, 2018
- Position coffee as a social catalyst of the “Pantry Culture”
- The facts
- The implications
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- Figure 14: Nescafé’s one-stop solution for office, China, 2018
The Market – What You Need to Know
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- Fresh coffee and RTD coffee have better chance to grow
- Threat from on-trade channels
Market Size and Forecast
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- The market value has good potential to grow further
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- Figure 15: Best- and worst-case forecast for coffee, by value, 2013-23
- The sales volume of non-liquid retail market grows much slower
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- Figure 16: Best- and worst-case forecast for non-liquid coffee, by volume, 2013-23
- Healthy growing trend in RTD coffee market
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- Figure 17: Best- and worst-case forecast for RTD coffee, by volume, 2013-23
Market Factors
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- Higher usage frequency driving growth
- Convenient delivery service of freshly-brewed as challenge
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- Figure 18: Sketch design of Starbucks cup lid for delivery, China, 2018
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- Figure 19: Luckin pushes AD in Wechat moment about the opening of a new store in the area, China, 2018
- On-trade channels expanding influence by selling drip bags
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- Figure 20: Family Mart’s drip bag coffee, China, 2018
Key Players – What You Need to Know
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- The leader gets stronger, the followers get weaker
- Diverse offerings to encourage more consumption
- Innovation around improving the comprehensive coffee experience
Market Share
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- Not much change in the market of non-liquid coffee
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- Figure 21: Company share of non-liquid coffee market in china, 2016 and 2017
- Nestlé is expanding its share in RTD area
- Uni-President is losing market share and needs product upgrade
- Starbucks still dominates the premium end of RTD coffee
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- Figure 22: Company share of RTD coffee market, 2016 and 2017
Competitive Strategies
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- Enrich product portfolio with inspiration from imported products
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- Figure 23: Percentage of imported packaged coffee, China, 2015-18
- Figure 24: Imported instant coffee introducing new technology, China, 2017
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- Figure 25: Comment under Nescafé’s white coffee product page, China, 2018
- RTD lines targeting different occasions
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- Figure 26: Starbucks Double Shot and Chilled Cup, China, 2018
- Diverse coffee types for automatic machine
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- Figure 27: Nespresso’s detailed instruction on how to make Salentina ice coffee, China, 2018
Who’s Innovating?
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- Rich flavours on trend
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- Figure 28: Flavour trend of instant and RTD coffee, China, 2014-18
- Cold brew instant coffee innovation
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- Figure 29: Saturn Bird provides images explaining usage instruction, China, 2018
- Figure 30: S.Engine’s cold brew instant coffee in liquid format, China, 2018
- Temperature-control container to enhance the experience
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- Figure 31: Coffee new launch storage type, China, 2013-18
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- Figure 32: RTD coffee new launch storage type, China, 2013-18
- Figure 33: Coffee new launch storage type, China, 2013-18
- Probiotics in coffee with straightforward benefits communication
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- Figure 34: Jus By Julie’s coffee with probiotics, US, 2018
The Consumer – What You Need to Know
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- Rising coffee consumption frequency
- Clean label as the most embraced trading up features
- Coffee has become part of the daily life ritual for some
Penetration of Coffee
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- RTD coffee has gained momentum
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- Figure 35: Penetration of different types of coffee, China, July 2018
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- Figure 36: Ranking of the penetration of different types of coffee, China, 2016-18
- Instant, RTD, and freshly-made coffee sharing the same group of fans
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- Figure 37: Penetration of different types of coffee, China, 2016-18
- Young females in their early twenties value coffee experience as a whole
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- Figure 38: Penetration of different types of coffee, by gender and age, China, July 2018
- DINK families are more into coffee
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- Figure 39: Penetration of different types of coffee, by family structure, China, July 2018
- White collars rely on coffee for its functional benefits
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- Figure 40: Penetration of different types of coffee, by job, China, July 2018
- Figure 41: Nescafé’s TVC in office setting with a man grinding coffee beans implying freshness, Korea, 2018
Consumption Frequency
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- Instant coffee and coffee machine are more for daily consumption
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- Figure 42: Coffee consumption frequency, China, July 2018
- Increasing consumption frequency across all coffee types
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- Figure 43: Coffee consumption frequency, China, 2017-18
Drinking Occasion
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- Freshly-made coffee plays a more important role during weekend
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- Figure 44: Coffee drinking occasion, China, July 2018
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- Figure 45: RTD coffee with energy boosting claim, Indonesia, 2018
- Different regions have their own occasions
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- Figure 46: Instant coffee drinking occasion, by region, China, July 2018
- Figure 47: Maxim Kanu Coffee’s TVC incorporating the setting of brunch, Korea, 2017
- More females aged 30-49 are into drip bag coffee on weekend morning
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- Figure 48: Drip bag coffee drinking occasion, by gender and age, China, July 2018
Opportunities for Premiumisation
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- Clean label features are most likely to drive premiumisation
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- Figure 49: Opportunities for RTD coffee premiumisation, China, July 2018
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- Figure 50: Latte stressing on its 80% of milk content on packaging, South Korea, 2018
- Figure 51: Premiumisation factors for RTD coffee - TURF Analysis, July 2018
- Young females care about their figures
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- Figure 52: Opportunities for RTD coffee premiumisation, by gender and age, China, July 2018
- Figure 53: Slimming instant coffee, Czech, 2018
- Consumers in Beijing are serious about limiting sugar intake
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- Figure 54: Ranking of RTD coffee’s premiumisation attributes among tier one cities, by city, China, July 2018
- Figure 55: Latte with low sugar claim or a guidance on sugar content scale, China and Japan, 2018
Barriers of Drinking Drip Bag Coffee
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- One fifth of drip bag coffee non-users have never heard of it
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- Figure 56: Barriers of drinking drip bag coffee, China, July 2018
- Sophisticated coffee drinkers have concerns on the paper bag
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- Figure 57: Barriers of drinking drip bag coffee, by company type and coffee consumption, China, July 2018
Attitudes Towards Coffee
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- Almost half of surveyed consumers find coffee indispensable
- Coffee as an essential to automatic coffee machine users
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- Figure 58: Attitudes towards coffee, China, July 2018
- RTD coffee heavy users are proactive in learning about coffee
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- Figure 59: RTD coffee with explanation of cold brew on package, China, 2017
- For the middle-aged, males rely more on coffee to refill energy
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- Figure 60: Attitudes towards coffee, China, July 2018
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- Figure 61: Attitudes towards coffee, China, July 2018
- Consumers in Guangzhou and from foreign companies are sophisticated
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- Figure 62: Attitudes towards coffee, China, July 2018
Meet the Mintropolitans
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- Mintropolitans consume more freshly-made coffee during weekdays
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- Figure 63: Occasion of freshly-made coffee consumption, by consumer classification, China, July 2018
- Mintropolitans are more interested in cold brew RTD coffee
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- Figure 64: Opportunities of RTD coffee premiumisation, by consumer classification, China, July 2018
Appendix – Market Size and Forecast
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- Figure 65: Value sales of total retail market of instant coffee, China, 2018-23
- Figure 66: Value sales of total retail market of fresh coffee, China, 2018-23
- Figure 67: Value sales of total retail market of RTD coffee, China, 2018-23
- Figure 68: Volume sales of total retail market of instant coffee, China, 2018-23
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- Figure 69: Volume sales of total retail market of fresh coffee, China, 2018-23
- Figure 70: Volume sales of total retail market of RTD coffee, China, 2018-23
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Appendix – Methodology, Definitions, and Abbreviations
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- Methodology
- Fan chart forecast
- Abbreviations
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