Since 2017, the Chinese coffee market has undergone an incredible amount of growth. The value of the country’s coffee sector is on average increasing by more than 10% year-on-year. It’s expected that over the next few years, its roasted & ground coffee market alone will be worth more than US $15.6 billion.
To keep up with this explosive growth, many coffee events and trade shows are being held in China’s “first tier” cities, such as Shanghai, Beijing, Guangzhou, and Shenzhen. These events include trade shows, networking opportunities, and exhibitions, as well as China’s national coffee competitions.
Felipe Cabrera is the CEO and founder of Ad Astra Coffee Consulting in Shanghai. In 2009, Felipe studied for his master’s degree in China, before deciding to permanently relocate there. He has been working in the Chinese coffee industry since 2015.
In this article, he explores why coffee events in China are becoming more popular and talks about some of the most prominent and influential events currently taking place.
You may also like our article on ecommerce & coffee in China.
Why are coffee events becoming so prominent?
In just a few years, the Chinese coffee market has grown rapidly.
The industry has transformed from a market dominated by second wave coffee shops, to a sector with more competition than ever, as well as a growing understanding of specialty coffee culture.
Coffee culture is no longer exclusively for citizens returning from Western countries and expats. Instead, it has become a ubiquitous beverage for many people in larger cities to enjoy while having an afternoon coffee break.
While coffee culture is mainly evolving in first tier cities, more cafés are opening in the “new” first tier cities (previously second tier cities). These include Chengdu, Changsha, Nanjing, Tianjin, Qingdao, and others.
If the market continues to grow at a similar rate, coffee culture will keep expanding to the second and third tier cities to attract a larger base of coffee consumers.
This rapid expansion has meant there is a broader range of coffee consumers than ever before. They have a variety of different purchasing habits and demands, and subsequently the different “waves” of coffee are collectively occurring at the same time in China – creating a truly unique market.
As a result, many coffee brands find it difficult to promote themselves without having to invest significantly in marketing.
For many Chinese coffee companies, attending or exhibiting at a coffee festival is a low-cost way to potentially generate sales. As with trade shows elsewhere, each coffee brand has its own booth, all of which are similarly sized, so the product or service remains as the focus of each business.
Some leading coffee events in China include Shanghai HOTELEX and the Shanghai Food and Hospitality China (FHC) festival.
Shanghai FHC Festival 2021
The 2021 Shanghai FHC festival took place from 9 to 11 November, 2021. It was one of the largest coffee events held last year, featuring extensive industry talks, as well as China’s national coffee championships.
As with previous editions, a specific exhibition hall was designated for coffee businesses in the event arena. This was also where the Chinese Latte Art and Cup Tasters Championships were held, alongside a number of other less formal competitions.
For the 2021 edition of the festival, the number of visitors decreased notably, mainly because of strict Covid-19 measures. Exhibitors and visitors were required to take a PCR test within 48 hours of attendance, as well as having to upload the results to a dedicated FHC app.
For the exhibitors, however, this meant a more competitive environment in which to promote and sell their products.
As well as this, the Shanghai FHC festival also highlighted some consumer trends in the Chinese coffee industry.
First and foremost, it indicated that the country’s coffee market is continuing to develop to become more specialty-focused, with consumers opting for coffees with more complex flavour profiles, cleaner taste, and more acidity. There were also a growing number of honey, natural, and anaerobic processed coffees on show.
Visitors at FHC also seemed to be more interested in light and medium roasts, with many looking for balance, brightness, and sweetness. They were also increasingly looking away from “traditional” bitter coffee profiles – representing a significant change to consumer preferences from even just 15 or 20 years ago.
Many coffee brands also hosted coffee mixology sessions at the event. As part of this, we saw them offer signature beverages on their menus, as well as rarer and more expensive coffees. Several Gesha and Pink Bourbon coffees were on display, even if they were offered alongside commercial-grade coffee.
Domestic coffee brands from all over China were present at the Shanghai FHC festival, including several from Beijing, Qingdao (northern China), Shenzhen and Foshan (south), Guizhou (southwest), and Xi’an (central).
One example is FU Roastery, a coffee brand from Kail in the Guizhou province – around 1,600km from Shanghai. Owned by a Chinese roasting champion, FU Roastery sells roasted coffee through Taobao and BiliBili, as well as its coffee shops.
Following on from other trends in the coffee market (notably seen at the 2021 HOTELEX Chengdu event), more specialty cacao and chocolate brands are also beginning to attend coffee festivals. One prominent example is Nibbo, a bean-to-bar brand originally from Shanghai.
Shanghai Lujiazui Coffee Festival 2021
A couple of weeks before FHC, the latest edition of the Shanghai Lujiazui Coffee Festival was held from 28 to 30 October 2021.
Shanghai Lujiazui Coffee Festival was established in 2016 with only 24 coffee brands exhibiting in its first event. Many of these brands were small coffee shops in Shanghai; some in the specialty sector.
Usually held in the heart of the Lujiazui district, this festival has now grown to include some 213 exhibitors. These numbers aren’t surprising as Shanghai is reported to have the largest number of coffee shops in any city in the world, with over 7,000 cafes.
This is further proof that the Chinese coffee sector and interest in coffee across first tier cities is growing at a tremendous pace.
Around 35% of the market share at Luijazui belongs to major coffee chains. Conversely, of the remaining 65%, some 50% accounts for boutique or artisanal coffee shops which use specialty coffee.
While FHC was more popular with domestic brands, a number of large international companies attended the 2021 Shanghai Lujiazui Coffee Festival, including Starbucks, Lavazza, La Marzocco, and McCafé.
Alongside food and coffee companies, a number of espresso machine and coffee equipment manufacturers were also at the event. Their contribution was particularly interesting, as it showed how local brands are increasingly catering to consumers’ demands for more ethical and environmentally friendly products.
For example, the sustainable Chinese brand KAFFTEC (“咖法” in Mandarin) was present in no small part at Lujiazui this year, showcasing its cups, tables, and seats, all of which are manufactured from used coffee pucks and recycled plastics.
Alongside this, there was also a growing focus on the importance of convenience for coffee consumers in the domestic market. In line with this, one of the most significant trends at Luijazui was a rise in the number of semi-automatic espresso machines on show. Chinese manufacturer XLVI (which assembles semi-automatic machines in China using imported parts from Europe) was one of the most prominent examples of this.
How might coffee events evolve in China?
As China’s coffee consumption grows, coffee festivals and events are likely to become more frequent.
The China Coffee Association of Beijing states the country’s coffee consumption is increasing at an annual rate of 15%. In 2020, an average of one coffee shop opened per day in Chengdu City (the country’s third largest coffee market), now reaching a total of more than 6,000 cafés in the city. This indicates stable growth despite the impact of Covid-19.
However, in many cases, the pandemic was detrimental for coffee shop chains in the Chinese market. In January 2020, Starbucks China closed over 2,200 locations in the country due to forced social distancing measures.
While the coffee shop market may have taken a significant hit, sales of ready-to-drink (RTD) coffee have increased in the country. In 2021, Coca-Cola launched Costa Coffee-branded RTD cold brew coffee in China in over 150,000 retail outlets, as well as on ecommerce platforms – a thriving market in China.
At-home coffee consumption experienced a sharp rise during stay-at-home measures. Specialty instant coffee continues to be popular among Chinese consumers: some 32% of the population reported drinking instant coffee in 2016, and it’s safe to assume this number increased during 2020.
Considering these trends, it would be no surprise if we saw the emergence of coffee events in China tailored to these rapidly-growing sectors. A shift in focus towards RTD coffee, at-home consumption, and domestically produced coffee may become more apparent, even though the out-of-home market is steadily showing signs of recovery.
These two coffee festivals serve as interesting examples of the sheer pace of growth in the Chinese coffee sector.
However, the immediate future for the country’s coffee industry and growing trends remain surprisingly difficult to predict. Following the Covid-19 pandemic, the growth of the Chinese coffee market has slowed slightly, considering the closure of many coffee shops, as well as the cancellation of a number of coffee events and trade shows since 2020.
As these restrictions begin to ease and more coffee events and festivals are held regularly in the country, the coffee market in China will continue to expand at pace and diversify. The country’s coffee sector is set to become even more vibrant and competitive, with coffee events poised to lead the charge in innovation and raising standards.
Enjoyed this? Then read our article on entering China’s emerging coffee market.
Photo credits: Felipe Cabrera
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