The instant coffee market in China is seeing strong development thanks to innovative products, growing demand for premium coffee, and consumer interest in healthy and sustainable products. Instant coffee is also more popular due to its convenience for consumers and time savings in preparation.
Chinese Instant Coffee Market Size in 2019-2023
The instant coffee market in China increased at a compound annual growth rate (CAGR) of 4.38%. As a result, it reached 10.33 billion USD in 2022.
The consumption per capita of instant coffee in China showed an overall increase in the period 2018-2022. Until 2022, it grew at a CAGR of 3.92% to reach 7.164 USD per capita.
Imports and Exports of Instant Coffee in China
The imports of instant coffee to China in the period 2018-2022 grew at a CAGR of 20.55% to reach 382.23 million USD.
The exports of instant coffee from China in the period 2018-2022 decreased at a CAGR of -7.00% to reach 77.30 million USD.
As a result, the trade balance of instant coffee in China was negative and recorded an overall increase during the analyzed period. Until 2022, the trade balance increased at a CAGR of 40.76% to reach -304.93 million USD.
Key Trends in the Instant Coffee Market in China
The instant coffee market in China has undergone significant transformations driven by consumer preferences, economic shifts, and cultural integration. A surge in demand for healthier and sustainable products has reshaped the landscape, prompting major players to adapt and innovate.
One of the most pivotal trends in the global and Chinese instant coffee market is the shift towards healthier and sustainable products. Consumers increasingly prefer organic, fairly produced coffee with clean labels. That has pressured companies to reduce sugar content and focus on transparency and simplicity in labeling to build trust.
The Chinese instant coffee market experienced rapid growth, fueled by the convenience it offers. Instant coffee now constitutes more than half of the Chinese coffee market. The growth is bolstered by a burgeoning coffee culture and constant investments in product development. Thus, instant coffee is now a popular alternative to traditional brewed coffee among a variety of consumer groups.
China's coffee consumption is rising swiftly, with international chains like Starbucks and local brands like Luckin Coffee proliferating across major cities. Their growth has spurred a unique coffee culture, with regional variations such as coffee mixed with tea in Guangdong and coffee served with fresh fruits and nuts in Yunnan. These distinctions highlight the diverse nature of coffee consumption in China.
China imports coffee beans primarily from Southeast Asia and exports to various countries. Yunnan province, the hub of Chinese coffee production, significantly improved its coffee standards, gaining recognition for producing some of Asia's finest coffee. The local government aims to increase the cultivation of premium coffee beans and enhance processing methods.
While conventional brands like Nestle and Maxwell remain dominant, boutique instant coffee brands rapidly gain market share. Innovations in raw materials, technology, and packaging push this shift. The market increasingly leans towards premium, sugar-free options that cater to health-conscious consumers that seek quality and variety.
Key Drivers in the Chinese Instant Coffee Market
A major driver for the future growth of the instant coffee market in China is the development of functional foods and drinks. Rising health awareness among consumers and advancements in food science spur demand for functional food and drink. They not only provide nutrition but also help prevent chronic diseases and optimize health.
Brand loyalty is another significant driver for industry growth. Established brands represent a mark of quality and authenticity that contemporary consumers trust. This loyalty is particularly strong for premium products, which guarantee a certain level of taste and quality. As a result, the premium segment of the Chinese instant coffee market is thriving. Chinese consumers prefer well-known brands that have a proven track record.
Innovation in the form of new product launches is crucial to meet ever-evolving customer expectations. Producers continually develop a variety of beverages with new and intriguing flavors to attract adventurous consumers. The focus on innovation not only caters to changing tastes but also positions instant coffee as a natural, clean-label product, boosting its attractiveness.
E-commerce is a key driver of demand in the coffee market in China. Online platforms like WeChat provide quick and easy ordering and delivery, catering to the convenience sought by modern Chinese consumers. Social media and online marketing are vital in this fast-growing channel, offering companies a direct line to customers.
For instance, Luckin Coffee, a Chinese company, made its debut in 2017 by delivering coffee and recycling cups through WeChat. By the end of March 2019, the company had over 2,300 locations operating across 13 cities. In 2024, Luckin Coffee reached 20,000 owned and partnered coffee shops across China.
Forecast for the Chinese Instant Coffee Market
Under the base forecast scenario, the Chinese economy is expected to show steady growth in the medium term. As a result, the Chinese instant coffee market is expected to reach 13.05 billion USD by 2028.
If the Chinese economy does not reach expectations, it will show declining rates in the medium term. In this case, the instant coffee market in China will fall to 8.59 billion USD by 2028.
If the Chinese economy exceeds expectations, the instant coffee market in China is forecast to reach 15.05 billion USD by 2028.
