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Coffee - China - August 2014

Published By :

Mintel

Published Date : Aug 2014

Category :

Beverages

No. of Pages : 157 Pages

Brands can market the western coffee culture to Chinese consumers, but still need to localise their products to fit Chinese palates. For the dominant instant coffee segment, growth opportunities come from expanding usage occasions and upgrading the majority medium users to heavy users through product innovation and advertisements. Moreover, there exists opportunities to encourage consumers to drink more premium products, such as premium instant coffee and fresh coffee.
Table of Content

Introduction

Definition
Methodology
Abbreviations

Executive Summary

The market
Figure 1: Retail market value of coffee in China, 2009-19
Figure 2: Share of China’s coffee market segment by value, 2009-19
Companies and brands
Figure 3: Market share of non-liquid coffee retail market, by value 2013
The consumer
Usage of coffee
Reasons for not drinking coffee
Figure 4: Reasons for not drinking coffee, May 2014
Frequency of drinking different types of coffee
Figure 5: Frequency of drinking different types of coffee, May 2014
Occasions of drinking coffee
Figure 6: Occasions of drinking coffee, May 2014
Consumers’ perception of different types of coffee
Figure 7: Consumers’ perception of different types of coffee, may 2014
Coffee buying and drinking behaviours
Figure 8: Coffee buying and drinking behaviours, May 2014
Attitudes towards coffee
Figure 9: Attitudes towards coffee, May 2014
Key issues
How can brands encourage more habitual consumption of instant coffee?
How can brands overcome the taste and cost barriers of fresh coffee?
How to change consumers’ negative perception of RTD coffee?
How to motivate young consumers to drink more coffee?

Issues and Insights

How can brands encourage more habitual consumption of instant coffee?
The facts
The implications
Figure 10: Examples of instant coffee with added benefits, Mainland China & Hong Kong, 2014
How can brands overcome the taste and cost barriers of fresh coffee?
The facts
The implications
How to change consumers’ negative perception of RTD coffee?
The facts
The implications
Figure 11: Examples of coffee innovations with “natural” claims, Japan, 2014
How to motivate young consumers to drink more coffee?
The facts
The implications
Figure 12: Examples of coffee and soft drink blends innovation, China, 2006-14

Trend Applications

Capturing more consumers on the go
Figure 13: Examples of RTD coffee packaging innovations, Taiwan, France & Czech Republic, 2013-14
Making coffee a mood food
Figure 14: Examples of coffee products with emotional benefits, US, Finland & Vietnam, 2014
Enhancing the sensory experience
Figure 15: Examples of coffee featuring intensified physical and sensory experiences, US & Finland, 2014

Market Size and Forecast

Key points
China’s coffee market value enjoyed a rapid growth in past five years
Figure 16: Retail market value of China’s coffee market, 2009-14
Great room for future consumption growth
Figure 17: Non-liquid coffee retail market volume & volume consumption per capita, China, Japan, US and UK, 2013
Coffee market forecast to grow at a double-digit rate in five years
Figure 18: Retail market value of coffee in China, 2009-19
Forecast methodology

Market Segmentation

Key points
Instant coffee still dominates but is growing at a slower rate
Figure 19: Share of China’s coffee market segment on value, 2009-19
Fresh coffee grew fastest among all three segments in value terms
Figure 20: Retail market value of China’s coffee market, by segment, 2009-14
Market volume grew steadily but at a slower rate than market value
Figure 21: Retail market volume of China’s coffee market, by segment, 2009-14

Market Share

Key points
Nestle dominates China’s coffee market
Figure 22: Share of value in China’s non-liquid coffee retail market, by company, 2012-13
Mondelez comes in second place
New variety extensions and advert help Mondelez increase market share
China’s coffee market is dominated by multi-national brands

Who’s Innovating?

Key points
Suntory launches Liqu Salty Coffee and Coffee Milk Tea Blends to China
Starbucks launches low-calorie Frappuccino Light Mocha in China
Figure 23: Example of low calorie coffee, China 2014
Brands innovate coffee with new mellow flavours and aroma in China
Figure 24: New coffee products with mellow taste and aroma, China 2014
Nescafe gets innovative with 3D-printed alarm cap
Coffee berries used to make coffee a healthier option
Figure 25: Examples of coffee & juice infusion innovations using coffee berry, Mexico & US, 2011-13
Old Orchard introduces iced coffee concentrates to the freezer section
Figure 26: Examples of iced coffee frozen concentrate, Canada, 2014

Companies and Brands

Nestle
Figure 27: Examples of mellow flavoured instant coffee, China, 2014
Mondelez International
Mocca Foods
Dehong Hogood Coffee Co. Ltd
Suntory
Uni-President
Kirin

The Consumer – Usage of Coffee

Key points
Coffee is far from a mainstream drink in China
Figure 28: Coffee usage in the last three months, May 2014
Figure 29: Coffee usage in the last three months, by city tier, May 2014
Young males in their 20s have the lowest usage rate
Figure 30: Coffee usage in the last three months, by gender and age group, May 2014
Income drives coffee consumption
Figure 31: Coffee usage in the last three months, by monthly personal income, may 2014

The Consumer – Reasons for not Drinking Coffee

Key points
Bitter taste puts consumers off from drinking coffee
Figure 32: Reasons for not drinking coffee, May 2014
Negative effect on health by caffeine is another major concern
Figure 33: Agreement on “I am concerned about the negative effect on the health of caffeine”, by gender, May 2014
Figure 34: Examples of low-caffeine coffee products, China, 2013-14
Market barriers vary by city
Figure 35: Most popular reasons for not drinking coffee, by city and tier, May 2014
Coffee blends with soft drinks could appeal more to people in their 20s
Figure 36: Most popular reasons for not drinking coffee, by gender & age group, May 2014

The Consumer – Frequency of Drinking Different Types of Coffee

Key points
Instant coffee is the most consumed coffee
Figure 37: Frequency of drinking different types of coffee, May 2014
Consumers from northern cities drink instant coffee more frequently
Potential for coffee beans and pods as coffee machines are more affordable
Families with kids drink coffee more frequently
Figure 38: Examples of coffee suitable for children, Europe & Asia, 2011-14
Coffee consumption frequencies go up as income rises
Figure 39: Frequency of drinking different types of coffee, by monthly personal income, May 2014

The Consumer – Occasions of Drinking Coffee

Key points
Coffee is a mood drink for Chinese consumers
Figure 40: Occasions of drinking coffee, May 2014
But there is also a functional element
Build medium users to heavy users of instant coffee
Figure 41: Occasions of drinking coffee, by frequency of drinking instant coffee, May 2014
Narrower consumption occasions for singles
Figure 42: Most popular occasions of drinking coffee, by marital status, May 2014

The Consumer – Consumer Perceptions towards Different Types of Coffee

Key points
Reinforcing energy boosting feature to meet consumer needs
Figure 43: Consumer perceptions of different types of coffee, May 2014
Figure 44: Examples of coffee highlighting energy boosting property, Vietnam, 2014
The artificial image of RTD coffee hinders its sales
Taste and cost put consumers off home-made coffee
Opportunities for instant coffee to trade up by premiumisation

The Consumer – Coffee Buying and Drinking Behaviours

Key points
Make coffee drinking part of lifestyles
Figure 45: Coffee buying and drinking behaviours, May 2014
Half of consumers prefer coffee from chain cafe brands
Coffee with added benefits targets consumers with specific needs
Figure 46: Examples of coffee with added benefits, Vietnam & Thailand, 2014
Only one in four consumers claim to be knowledgeable about coffee

The Consumer – Attitudes towards Coffee

Key points
A high level of interest in fresh coffee products among consumers
Figure 47: Attitudes towards coffee, May 2014
Fulfilling the market gap for premium instant coffee
Figure 48: Agreement on “There is no big difference in taste between instant coffee and freshly brewed coffee”, by monthly personal income, May 2014
Figure 49: Examples of premium instant coffee product launches, China, 2013-14
Potential targets for premium instant coffee
Figure 50: Agreement on “I am willing to pay more for premium instant coffee (eg using arabica beans, made from organic ingredients)”, by gender and age group and city, May 2014
Young consumers, especially women, demand greater flavour variety
Figure 51: Agreement on “there is a lack of various flavours of coffee (eg no coffee with nuts/fruit flavours) in the market”, by age and gender group, May 2014

Consumer Segmentation

Key points
Consumer segmentation
Figure 52: Consumer segmentation on China’s coffee market, may 2014
Figure 53: Consumer attitudes towards coffee, by target groups, may 2014
Quality Coffee Pursuers
Convenience Seekers
Variety Seekers
Demotivated Drinkers

Appendix – Market Size and Forecast

Figure 54: Value sales of China’s coffee retail market, 2009-19
Figure 55: Volume sales of China’s non-liquid coffee retail market, 2009-19

Appendix – Market Segmentation

Figure 56: Value sales of China’s instant coffee retail market, 2009-19
Figure 57: Value sales of China’s fresh coffee retail market, 2009-19
Figure 58: Value sales of China’s RTD coffee retail market, 2009-19

Appendix – The Consumer – Usage of Coffee

Figure 59: Coffee usage in the last three months, May 2014
Figure 60: Coffee usage in the last three months, by demographics, May 2014

Appendix – The Consumer – Reasons for not Drinking Coffee

Figure 61: Reasons for not drinking coffee, May 2014
Figure 62: Most popular reasons for not drinking coffee, by demographics, May 2014
Figure 63: Next most popular reasons for not drinking coffee, by demographics, May 2014

Appendix – The Consumer – Frequency of Drinking Different Types of Coffee

Figure 64: Frequency of drinking different types of coffee, May 2014
Figure 65: Frequency of drinking different types of coffee, May 2014
Figure 66: Most popular frequency of drinking instant coffee, by demographics, May 2014
Figure 67: Next most popular frequency of drinking instant coffee, by demographics, May 2014
Figure 68: Most popular frequency of drinking home-made coffee, by demographics, May 2014
Figure 69: Next most popular frequency of drinking home-made coffee, by demographics, May 2014
Figure 70: Most popular frequency of drinking ready-to-drink coffee drinks, by demographics, May 2014
Figure 71: Next most popular frequency of drinking ready-to-drink coffee drinks, by demographics, May 2014
Figure 72: Most popular frequency of drinking freshly made coffee at retail channels, by demographics, May 2014
Figure 73: Next most popular frequency of drinking freshly made coffee at retail channels, by demographics, May 2014

Appendix – The Consumer – Occasions of Drinking Coffee

Figure 74: Occasions of drinking coffee, May 2014
Figure 75: Most popular occasions of drinking coffee, by demographics, May 2014
Figure 76: Next most popular occasions of drinking coffee, by demographics, May 2014
Figure 77: Occasions of drinking coffee, by frequency of drinking instant coffee, May 2014
Figure 78: Occasions of drinking coffee, by frequency of drinking home-made coffee, May 2014
Figure 79: Occasions of drinking coffee, by frequency of drinking ready-to-drink coffee drinks, May 2014
Figure 80: Occasions of drinking coffee, by frequency of drinking freshly made coffee at retail channels, May 2014
Repertoire analysis
Figure 81: Repertoire of occasions of drinking coffee, May 2014
Figure 82: Repertoire of occasions of drinking coffee, by demographics, May 2014

Appendix – The Consumer – Consumers\' Perceptions of Different Types of Coffee

Figure 83: Consumers\' perception of different types of coffee, May 2014
Figure 84: Most popular consumers\' perception of instant coffee, by demographics, May 2014
Figure 85: Next most popular consumers\' perception of instant coffee, by demographics, May 2014
Figure 86: Most popular consumers\' perception of home-made coffee, by demographics, May 2014
Figure 87: Next most popular consumers\' perception of home-made coffee, by demographics, May 2014
Figure 88: Most popular consumers\' perception of ready-to-drink coffee drinks, by demographics, May 2014
Figure 89: Next most popular consumers\' perception of ready-to-drink coffee drinks, by demographics, May 2014
Figure 90: Consumers\' perception of different types of coffee, by frequency of drinking instant coffee, May 2014
Figure 91: Consumers\' perception of different types of coffee, by frequency of drinking home-made coffee, May 2014
Figure 92: Consumers\' perception of different types of coffee, by frequency of drinking ready-to-drink coffee drinks, May 2014
Figure 93: Consumers\' perception of different types of coffee, by frequency of drinking freshly made coffee at retail channels, May 2014

Appendix – The Consumer – Coffee Buying and Drinking Behaviours

Figure 94: Coffee buying and drinking behaviours, May 2014
Figure 95: Most popular consumers\' drinking and buying behaviour towards coffee, by demographics, May 2014
Figure 96: Next most popular consumers\' drinking and buying behaviour towards coffee, by demographics, May 2014

Appendix – The Consumer – Attitudes towards Coffee

Figure 97: Attitudes towards coffee, May 2014
Figure 98: Agreement with the statement ‘When drinking coffee out of home, the experience/services is more important than the coffee served’, by demographics, May 2014
Figure 99: Agreement with the statement ‘It is important for me to learn more about coffee’, by demographics, May 2014
Figure 100: Agreement with the statement ‘Coffee bought in coffee shops tastes better than home-made coffee’, by demographics, May 2014
Figure 101: Agreement with the statement ‘There is no big difference in taste between instant coffee and freshly brewed coffee’, by demographics, May 2014
Figure 102: Agreement with the statement ‘It is more time-saving to buy coffee out of home than making it at home’, by demographics, May 2014
Figure 103: Agreement with the statement ‘Coffee is more effective for energy boosting than strong tea’, by demographics, May 2014
Figure 104: Agreement with the statement ‘Coffee is a healthier option than energy drinks’, by demographics, May 2014
Figure 105: Agreement with the statement ‘I am interested in learning more about how to make coffee at home’, by demographics, May 2014
Figure 106: Agreement with the statement ‘Making coffee at home is an enjoyable process’, by demographics, May 2014
Figure 107: Agreement with the statement ‘Quality of coffee is more important than how easy it is to make’, by demographics, May 2014
Figure 108: Agreement with the statement ‘Making coffee at home is a symbol of pursuing better quality life’, by demographics, May 2014
Figure 109: Consumer attitudes towards coffee, by frequency of drinking instant coffee, May 2014
Figure 110: Consumer attitudes towards coffee, by frequency of drinking home-made coffee, May 2014
Figure 111: Consumer attitudes towards coffee, by frequency of drinking ready-to-drink coffee drinks, May 2014
Figure 112: Consumer attitudes towards coffee, by frequency of drinking freshly made coffee at retail channels, May 2014

Appendix – The Consumer Segmentation

Figure 113: Target groups, by demographics, May 2014
Figure 114: Frequency of drinking different types of coffee, by target groups, May 2014
Figure 115: Occasions of drinking coffee, by target groups, May 2014
Figure 116: Consumers\' perception of different types of coffee, by target groups, May 2014
Figure 117: Consumers\' drinking and buying behaviour towards coffee, by target groups, May 2014
Figure 118: Consumer attitudes towards coffee, by target groups, May 2014

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