Coffee in China – A product for the Elite

In China, tea is mainly consumed. However, in recent years, coffee consumption in this country has skyrocketed. Thus, more and more coffee shops are opening in the major cities of this Asian country, especially from brands like Starbucks, as coffee is considered a status symbol in Chinese culture.

The origins of coffee in China

Various historical records indicate that coffee was brought to China by French missionaries towards the end of the 19th century. The French missionaries then brought the first seeds of the coffee tree (the coffee plant) and planted them in the Yunnan region, a province in southwest China with a climate suitable for coffee growing.

For more than 100 years, however, coffee was practically ignored in the Asian giant, largely because tea is much more popular among the population. It wasn’t until the late 1980s that the Chinese government developed a plan to mass-produce coffee, albeit with the help of the UN, the World Bank and even multinational Nestlé.

Later, in the 1990s, the first international coffee chains came to China and since then they have continued to expand, especially in the big cities. Today, there are more than 2,000 Starbucks stores in different parts of China, and the brand is expected to have 3,000 stores on Chinese soil in the next few years.

Millennials are the driving force behind coffee in China

Millennials (i.e. the generation born between 1981 and 1996) currently make up 25% of the total population in China.

Importantly, with this generation, many of these people are middle class, meaning they have the financial means to meet needs that are considered luxuries in their country.

In China, for example, this population group is characterized by an incessant desire for products of American or European origin, since these are considered a symbol of social status.

Although coffee is not a product of the United States or Europe, it is perceived by the Chinese public as a symbol of the West.

Is coffee a luxury in China?

In America or even in Europe, coffee is not necessarily a luxury product and a symbol of the elite. In China, however, a cup of coffee is almost a luxury. And that’s because the brands that have a strong presence in the Chinese market are industry giants like Starbucks (nowhere cheap) or the Canadian chain Tim Hortons.

So Chinese coffee drinkers are used to paying up to $6 for a Starbucks coffee. Such an amount is the equivalent of a full dinner at a local restaurant, so only high-income people or those who want to appear wealthy can buy such coffee on a regular basis.

Also, Chinese consumers associate higher price with better quality, which helps keep coffee costs high.

Coffee production in China

Coffee production in China has expanded significantly since the early 1990s. In fact, the Asian country has risen from 30th to 20th place among the world’s coffee producers in a period of about 20 years.

In addition, the Yunnan region is responsible for 90% of the country’s total domestic coffee production. In addition, only Arabica coffee is grown in this region ; however, there are some small Robusta coffee plantations in Hainan Island and Fujian Province.

The terrain in Yunnan is ideal for growing Arabica coffee

While the Yunnan region is known as a tea-growing province, its mountainous geography with altitudes of up to 2000m above sea level and temperate climate are ideal for growing high-quality Arabica coffee.

This is mainly due to Yunnan’s privileged location, which lies in the middle of the so-called “coffee belt”. Yunnan borders Vietnam, Myanmar and Laos, countries known for their coffee, particularly Vietnam which is the second largest coffee producer in the world.

Coffee consumption in China

Up until about 10 years ago, instant coffee was mainly consumed in China. However, as mentioned earlier, coffee consumption has been boosted by the 400 million Millennials. This demographic group (Millennials) is heavily influenced by consumption patterns in Europe, the United States and Canada.

Therefore, interest in consuming better-quality coffee than instant coffee is increasing, especially among affluent consumers.

Do more coffee shops mean more consumption?

Shanghai and Beijing are the two most important cities in China, both cosmopolitan, modern and, above all, full of cafes. So, it would be logical to assume that these cities have high coffee consumption, right?

According to the consulting firm Euromonitor International, the per capita consumption of coffee in China is 3 cups per year, with consumption in the major urban centers being significantly higher.

To give you an idea, consider that per capita coffee consumption in the United States is 363 cups per year, according to Euromonitor. In other words, most Chinese consume very little coffee, mainly because of the high price of coffee and the ingrained habit of drinking tea.

However, the income of many Chinese has increased, leaving them more money to spend on Western products such as coffee. Euromonitor points out that coffee consumption in China, while not the highest, has increased by 16% per year over the past decade, which is significant growth.

So, one thing is certain: more brands can be expected to enter the Chinese market as this country offers great opportunities for the coffee sector. And as more players enter the competition for the Chinese public’s preference, especially millennials, it will ultimately result in lower coffee prices as there will be more supply.

However, Starbucks already has an edge over its rivals, as the US brand has partnered with several coffee growers in the Yunnan region since 2017 to market a Chinese-origin coffee.

This massive investment in the coffee industry suggests that it will be one of the fastest growing economic sectors in the Asian country in the coming years. At the same time, boosting domestic coffee consumption could be a great incentive since most of the production, like in other coffee-producing countries, is destined for export.

Coffee processing in China

The Chinese coffee farmers are currently focusing on the production of specialty coffee, so there are already several processing methods to achieve good coffee quality.

So, there are different ways to prepare the coffee beans so that they are ready for the roasting process.

Coffee washing process in China

In this process, the coffee fruits are washed in industrial machines until only the beans are left, i.e. the pulp is removed.

It is also common for the coffee to be fermented with or without water to remove the mucilage, that is the part of the fruit that contains neither sugar nor caffeine.

Natural drying process

The coffee beans then undergo a drying process. The coffee is then dried naturally, ie in the fresh air. Depending on the weather and the thickness of the beans, this process can take up to several weeks.

Processing with honey

Contrary to what you might think, no honey is used in this procedure. After the pulp is removed from the fruit, the mucilage is not removed but is left in place.

This is done so that when the mucus comes into contact with air, it becomes viscous and acquires a honey-like consistency. This gives the coffee a milder taste, which it retains even after roasting.

Flavor profile of coffee made in China

It is worth remembering that 90% of China’s coffee production comes from the Yunnan region. However, the coffee produced there can taste very different depending on the altitude at which it was grown and the type of processing prior to roasting.

However, those who have tasted Chinese specialty coffee say that in general it is a drink with balanced flavors, fruity notes and a good amount of sweetness. In addition, experts say that coffee that has been washed before roasting tastes very similar to coffee produced in Latin America.