China Instant Coffee Market Forecasts from 2023 to 2028

China instant coffee market is projected to grow at a CAGR of 8.49% over the forecast period, increasing from US$2, 330.940 million in 2021 to US$4, 122.516 million by 2028.

The transition from traditional tea consumption to coffee and global coffee chains shifting to China is boosting the instant coffee demand in the anticipated time frame. The China Coffee Association Beijing (CCAB) reports that the yearly growth rate of coffee consumption is 15%. The market's current leaders, such as Starbucks and Nestle, have significantly contributed to developing China's coffee culture. The increasing demand for coffee in China can also be attributed to increased coffee framing in China. According to China Briefing, the production of coffee in 2021-22 was 2 million 60 kilograms of coffee, up from 1.8 million in the year 2020-21.

Instant coffee vendors have much to gain from China's shift in tastes, which may be attributed to millennial consumption habits. Companies see a huge potential in the Chinese market and are indulging in new and innovative instant coffees. For instance, in response to the growing desire for "cafe-style cold coffee experiences" at home, the Swiss food and beverage giant – Nestle- will launch its Nescafe Ice Roast instant coffee in China in April 2023.

Increasing retail e-commerce sales.

According to the International Trade Administration, in 2021, China's retail e-commerce sales reached US$2.77 trillion, representing a 20% increase over 2020's sales figure. Also, according to the World Bank, 73% of China's population were active internet users in 2021, signifying 9% over 2019's penetration rate. Such an increase in China's retail e-commerce and internet usage will positively impact the scale of online instant coffee buying. According to the 2020 joint survey issued by Alibaba and Ele.me, China's online coffee buying has grown 1.5 times since 2019, with instant coffee constituting 13.5% share of the overall coffee products.

A shift of younger professionals from traditional tea to coffee.

In China, tea is still the preferred beverage, although coffee is becoming increasingly popular, particularly among young professionals and in metropolitan areas. The Chinese government funded the coffee exposition in Haikou to advance both domestic and international coffee commerce and Chinese coffee culture. As per the USDA, China's coffee production significantly increased after the coffee exposition. In 2016-2017, the consumption in China was 3.7 million bags, which is only four to five cups of coffee per person in China, according to the International Coffee Organization.

But the shift to coffee came rapidly in China as the younger population started to consume coffee regularly. In 2021-22 the average cups consumed by Chinese people reached 6.2 cups per capita. Instant coffee plays a very big part here as it is easy to make and even it is easy to carry. Additionally, offices in China have started using instant coffee regularly.

China's extensive distribution channels.

Based on distribution channels, China's instant coffee market is segmented into offline and online channels. The online channel is expected to be fueled by the growing internet and smartphone penetration in China. Higher flexibility and convenience provided by online channels make them more suitable for shopping than offline channels such as retail stores. Rapid urbanization in China and growing internet penetration have boosted online buying in the country.

Market Developments:

Moreover, new product launches of instant coffee coupled with online store establishment are expected to further propel the usage of online channels for instant coffee buying. For instance, in February 2021, China's online instant coffee brand Saturnbird Coffee launched limited edition espressos for the Lunar Year that started in China on February 12, 2021, and ended on January 30, 2022.

Market Segmentation:

BY TYPE

• Freeze-Dried Instant Coffee
• Spray-Dried Instant Coffee
• Others

BY DISTRIBUTION CHANNEL

• Offline
• Retail
• Food services
• Online

BY PROVINCE

• Guangdong
• Fujian
• Others