Why is it so hard for China to build a big coffee brand?
The international coffee exhibition closed on Sunday at the International Exhibition Center. Amid the rich aroma, visitors crowded the venue, and the scene was very lively. But the surface buzz cannot hide the awkwardness of the domestic coffee market. After visiting the event, reporters found that most of the sought-after coffee brands are "foreign guests," and China still has no major coffee manufacturer or chain that is well known internationally. Industry insiders say that because of the lack of coffee culture and insufficient capital investment, China's coffee industry is still in a climbing phase.
Per capita annual consumption is less than five cups
On the streets of first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen, coffee shops are an ever-present sight. Some urban white-collar workers have even reached the stage of "no coffee, no joy," and after years of sipping and tasting, they have developed a keen tongue that can distinguish differences in the strength and even the origin of each cup of coffee.
But coffee "enthusiasts" are still a minority in China. According to "Uncle Bean," founder of "Haofang Roasting," who has struggled in the industry for more than ten years, China's coffee consumption has continued to rise over the past decade, with annual growth reaching double digits, but until now annual per capita coffee consumption is only just over four cups, while neighboring Japan and South Korea have reached 340 cups and 300 cups, and the figures for Europe and the United States are even more astonishing.
"For Chinese people, drinking coffee has not yet become a normal habit. People in our circle often joke like this - we do not need to reach a hundred cups; if each of us drinks 20 cups a year, the world coffee price will be pushed up threefold." "Uncle Bean" told reporters at the international coffee exhibition.
Supplying coffee beans to big brands
Although per capita consumption is limited, when multiplied by the huge population base, the scale of China's coffee consumer market is still considerable. In recent years, coffee cultivation in "Colorful Yunnan" has been developing vigorously, accounting for more than 95% of China's total coffee production, and China's coffee output also accounts for about 1% of world output. Whether in terms of latitude, soil or climate, Yunnan's environment is suitable for coffee seeds to take root and sprout. According to statistics, the area planted with coffee there has reached 1.32 million mu, and annual coffee bean output is around 80,000 tons, which has also spawned a huge number of enterprises.
The quality of Yunnan coffee beans has attracted buyers from all over the world. It is understood that both the fast-moving consumer goods giant Nestle and the leading coffee chain Starbucks buy large quantities of coffee beans from Yunnan for processing and production.
Having taken "internationalized" money, local coffee producers have not quickly grown from toddling infants into adults. Although the number of enterprises is not small, they all remain at the lower end of the industrial chain, and their development is not yet mature. Their business scope is limited only to supplying raw materials. There are many, small and scattered enterprises, and a comprehensive leading enterprise has still not appeared. Whether in terms of domestic and international market share or consumer evaluation, China's coffee practitioners are still in a "voiceless" state. Until now, China is still not a member of the International Coffee Organization.
"In terms of coffee beans, Yunnan arabica coffee is quite popular, but there is no brand that people can remember." The person in charge of a company engaged in coffee-related trade told reporters.
"Scattered fighters" still need tempering
When coffee shops are mentioned, most Chinese people's minds will conjure up the logos shaped like a "mermaid" and "three coffee beans" - Starbucks and COSTA COFFEE have already crossed the oceans and blossomed everywhere in China. In the instant coffee industry, "Nestle" and "Maxwell" have also climbed onto the shelves of supermarkets large and small across China. But so far not a single Chinese coffee shop or coffee brand has gained widespread praise at home.
"We do not have a 'Starbucks,' first because of culture, and second because of capital." Bai Fang, secretary-general of the Beijing Coffee Industry Association, told reporters that the history of coffee is about 700 years, while in China it only began to develop in this century. Lacking historical accumulation and cultural depth, and with no atmosphere established, building chain stores is difficult in terms of both business model and management culture. In commercial operation, the industrialization of coffee is by no means the arduous work of cultivation, because market returns are slow, and large amounts of capital must be invested in the early stage. It is hard to make "quick money," and with unclear prospects, capital holders are all waiting and watching.
Whether in the professional field of coffee production and manufacturing or among ordinary consumers, the so-called "big coffee brands" are still generally recognized as Western arrivals with foreign surnames such as Starbucks and Nestle. Domestic brands that "can be named" are few and far between. "UBC Coffee," whose franchise stores have grown rapidly in the past two years, also first flourished in Taiwan, China, and is not a mainland "native." Although "characteristic coffee shops" large and small have opened from first-tier to second- and third-tier cities in China, they are all "scattered fighters" that have not formed a real force, and their radius of influence basically does not exceed one city, or even one neighborhood.