Table of Contents
Overview
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- What you need to know
- Covered in this Report
- Excluded
- Definition
Executive Summary
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- The market
- Market value experiences strong growth
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- Figure 1: Best- and worst-case forecast for sales value of on-premise coffee, China, 2014-24
- Market volume driven by rapid business expansion
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- Figure 2: Best- and worst-case forecast for on-premise coffee house numbers, China, 2014-24
- Companies and brands
- Traditional coffee house chains improve consumers’ overall experience
- New retail coffee houses perform differently
- New players enter C-store coffee market
- Fuse Chinese and Western cultures in innovation
- Borrow ideas from sauce and seasonings
- Provide more fun during drink time
- The consumer
- Between meals is the main consumption occasion
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- Figure 3: Consumption channel and occasion, China, August 2019
- Fusion coffee drinks attract more attention
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- Figure 4: Coffee drink penetration, China, August 2019
- Creamy texture and famous coffee bean origin win most consumers’ preference
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- Figure 5: Features of an ideal coffee, China, August 2019
- Consumers present a high preference for adding plant protein
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- Figure 6: Interest in coffee drink innovation, China, August 2019
- Western staple food and Chinese dessert have potential to develop
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- Figure 7: Preference for other products in coffee houses, China, August 2019
- Coffee house-branded RTD coffee has opportunity to grow
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- Figure 8: Attitudes towards on-premise coffee, China, August 2019
- What we think
Issues and Insights
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- Develop coffee with plant ingredients but no reduction of dairy flavour
- The facts
- The implications
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- Figure 9: Coffee with avocado, China
- Coffee extract food arouses interest
- The facts
- The implications
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- Figure 10: Coffee snacks and desserts, China & Australia, 2019
- Drive consumption of niche coffee drinks by collaborating with KOLs
- The facts
- The implications
The Market – What You Need to Know
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- Both value and volume market experience double-digit growth rates
- More players enter the market
- Various consumption purposes and occasions mutually promote purchasing
Market Size and Forecast
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- Largely improved availability drives strong growth of market value
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- Figure 11: Best- and worst-case forecast for sales value of on-premise coffee, China, 2014-24
- Diversified business scales and more new players stimulate market volume
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- Figure 12: Best- and worst-case forecast for on-premise coffee house numbers, China, 2014-24
Market Factors
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- Crazy expansion of Luckin Coffee has further driven more players into the market
- Multiple consumption purposes drive more occasions
- More innovative packaged coffee affects on-premise coffee consumption
Key Players – What You Need to Know
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- Traditional coffee house chains experience steady expansion
- Different expansion strategies for new retail coffee houses
- The fast expansion of existing brands and arrival of new players
Market Share
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- Traditional coffee house chains grow steady
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- Figure 13: Outlets number of key players, China, 2018 and 2019
- New retail coffee houses strengthen their stores and products innovation
- C-store coffee focus on store expansion
Competitive Strategies
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- Reinforce the integration with delivery and pick-up service advantages
- Enhance brand image by store design and product quality
- Increase drink and food selections
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- Figure 14: Innovative coffee drinks blurring with tea shop drinks and dessert, by Coffee Box, China, 2019
Who’s Innovating?
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- Fusion with Chinese elements
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- Figure 15: Coffee houses infuse Chinese style, China, 2018-19
- Innovative flavour inspired from sauce and seasonings
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- Figure 16: Innovative flavours, China, 2019
- Create an entertaining coffee experience
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- Figure 17: Innovation on ways of drinking, China
The Consumer – What You Need to Know
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- Delivery service affects consumers’ purchasing habits
- Ways of developing sweet and savoury coffee
- Take advantage of the intrinsic features of on-premise coffee
Consumption Channel and Occasion
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- Traditional chains still dominate the market
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- Figure 18: Penetration of on-premise coffee channels, China, August 2019
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- Figure 19: Ranking sequence of certain on-premise coffee channel penetration, China, September 2018 and August 2019
- Majority of consumers purchase fresh coffee between meals
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- Figure 20: Consumption channel and occasion, China, August 2019
- Western-style fast food restaurants become more important in meal occasions
Product Penetration
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- Fusion coffee drinks are the most popular
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- Figure 21: Coffee drink penetration, China, August 2019
- Develop specialty coffee in tier two cities
- More females aged 20-29 interested in black coffee
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- Figure 22: Penetration of selected coffee drinks, by gender and age, China, August 2019
Ideal Coffee
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- Communicating origin with consumers is more competitive
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- Figure 23: Features of an ideal coffee, China, August 2019
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- Figure 24: Detailed introduction of coffee beans, by Essence Café, China, 2018
- Quality of coffee bean and machine would get more important
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- Figure 25: Features of an ideal coffee, by different consumer groups, China, August 2019
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- Figure 26: Coffee served with an information card, by e.R Coffee Roasters, China, 2019
- Introduce sweet and savoury flavours on certain drinks
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- Figure 27: Coffee drink consumption, by selected features of an expected ideal coffee, China, August 2019
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- Figure 28: Black coffee with French cheese milk cap, by Coco, China, 2019
Interest in Innovation
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- Coffee with plant protein arouses most interest
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- Figure 29: Interest in coffee drink innovation, China, August 2019
- Innovate on creamy coffee
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- Figure 30: Interest in innovation – TURF Analysis, China, August 2019
- 20-24s present very different interests than other age groups
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- Figure 31: Interest in coffee drink innovation, by age, China, August 2019
- Preferred innovation on different coffee drinks
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- Figure 32: Coffee drinks consumption, by innovative attributes, China, August 2019
Preference for Other Products in Coffee Houses
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- Food preference of main fresh coffee consumers – 30-39s
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- Figure 33: Preference for other products in coffee houses, China, August 2019
- Western staple food is of importance
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- Figure 34: Preference for other products in coffee houses – TURF Analysis, China, August 2019
- Introduce gifting pack or tie-in sale
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- Figure 35: Coffee drink consumption, by preference for other products in coffee houses, China, August 2019
Attitudes towards On-premise Coffee
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- Consumers have and expect to gain more coffee knowledge
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- Figure 36: Attitudes towards on-premise coffee, China, August 2019
- Embrace a modern lifestyle by having a famous on-premise coffee
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- Figure 37: Attitudes towards on-premise coffee, China, August 2019
- Develop own-label RTD coffee
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- Figure 38: Attitudes towards on-premise coffee, China, August 2019
- Communicate intrinsic coffee taste of on-premise coffee
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- Figure 39: Attitudes towards on-premise coffee, China, August 2019
Meet the Mintropolitans
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- Design a coffee drink for MinTs
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- Figure 40: Selected feature of an ideal coffee and selected interested coffee drink innovation, by consumer classification, China, August 2019
- Products that MinTs expect to buy in coffee houses
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- Figure 41: Consumption occasions and selected channel – traditional coffee house chains, by consumer classification, China, August 2019
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- Figure 42: Preferred products except coffee drinks in coffee houses, by consumer classification, China, August 2019
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- Figure 43: Suitcase, by Starbucks, China, 2019
Appendix – Market Size and Forecast
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- Figure 44: Best- and worst-case forecast for sales value of on-premise coffee, China, 2014-24
- Figure 45: Best- and worst-case forecast for on-premise coffee house numbers, China, 2014-24
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Appendix – Market Segmentation
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- Methodology
- Fan chart forecast
- Abbreviations
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