Interview Synopsis

China’s 2020 packaged coffee – instant vs ready-to-drink

  • Multi Asset
  • Consumer
  • Greater China

Although coffee is one of the most frequently consumed beverages in the world, it is still an emerging category in China – albeit one that is perking up. In fact, the “pandemic didn’t change the rising trend of China’s coffee market”, explained a former general manager from Shanghai Paca Coffee Co Ltd, who Third Bridge Forum interviewed to learn more about the market.

What segments of China’s coffee market are heating up?

The Interview first looked at the general coffee consumption trends across China, including market share by category and their target demographics. When asked about what would see the greatest growth over the next three to five years, the expert replied: “I am quite optimistic about the prospects of several coffee segments which have seen their market share grow rapidly, namely fresh ground and ready-to-drink coffee as well as drip bag and capsule coffee.” 

Traditional and emerging players were also explored. Nestlé occupies first place in the instant segment, with the specialist counting its strong brand awareness and high share of products on the shelves within supermarkets among the reasons for this position. Turning to the newer entrants, the specialist explored Youngpu Coffee, Secre Coffee and Tastelab, noting their brand differentiators.

The gross margin and cost structure of different product types were also on the agenda, including how packaging and raw materials can affect firms’ bottom lines. Indeed, according to the former general manager, “the global coffee bean market is oversupplied for the moment”, meaning coffee companies can control costs better. 

To access all the human insights from Third Bridge Forum’s China’s 2020 Packaged Coffee – Instant vs Ready-to-drink Interview, click here to view the full transcript. 

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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