Understanding the growth of coffee events in China

Since 2017, the Chinese coffee market has seen incredible growth. The value of the country’s coffee sector is increasing on average by more than 10% year-on-year. It is expected that over the next few years, its roast and 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 fairs are organized 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 national coffee competitions in China.

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 settle there permanently. He has worked 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 biggest and most influential events happening right now.

You might also like our article on e-commerce & coffee in China.

Why are coffee events becoming so important?

In just a few years, the Chinese coffee market has grown rapidly.

The industry has moved from a market dominated by second-wave coffees to one with more competition than ever, along with a growing understanding of specialty coffee culture.

Coffee culture is no longer reserved for returning citizens of Western countries and expatriates. Instead, it has become a ubiquitous drink for many people in major cities to enjoy while taking an afternoon coffee break.

While coffee culture is evolving mainly in the first-tier cities, more cafes are opening in the “new” first-tier cities (formerly 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 continue to spread to second and third tier cities to attract a larger base of coffee consumers.

This rapid expansion has resulted in a wider range of coffee consumers than ever before. They have a variety of different buying habits and demands, and as a result, the different “waves” of coffee are happening collectively at the same time in China, creating a truly unique market.

As a result, many coffee brands struggle to promote themselves without having to invest significantly in marketing.

For many Chinese coffee companies, attending or exhibiting at a coffee festival is an inexpensive way to potentially generate sales. As with trade shows elsewhere, each coffee brand has its own stand, all of which are similar in size, so that the product or service remains the focus of each business.

Some of the major coffee-related events in China include Shanghai HOTELEX and Shanghai Food and Hospitality China (FHC) Festival.

china latte art shanghai championship

FHC Shanghai Festival 2021

Shanghai FHC Festival 2021 took place from November 9th to 11th, 2021. It was one of the biggest coffee events held last year, with in-depth discussions on the industry, as well as the National Coffee Championships in China.

As with previous editions, a specific showroom has been designated for coffee businesses in the event space. This is also where the Chinese Latte Art and Cup Tasters Championships have been held, as well as a number of other less formal competitions.

For the 2021 edition of the festival, the number of visitors has notably decreased, mainly due to the strict measures linked to Covid-19. Exhibitors and visitors had to take a PCR test within 48 hours of their attendance, as well as upload the results to a dedicated FHC app.

For exhibitors, however, it meant a more competitive environment in which to promote and sell their wares.

In addition to this, the FHC Shanghai Festival also highlighted some consumer trends in the Chinese coffee industry.

First, he indicated that the country’s coffee market continues to grow to focus more on specialties, with consumers opting for coffees with more complex flavor profiles, purer taste and more tartness. More and more honey, natural and anaerobic coffees were also on display.

FHC visitors also seemed more interested in light and medium roasts, with many seeking balance, brightness and smoothness. They were also increasingly moving away from “traditional” bitter coffee profiles, which represented a significant shift in consumer preferences from just 15 or 20 years ago.

Many coffee brands also hosted coffee mixology sessions at the event. As part of this, we’ve seen them offer signature drinks on their menus, as well as rarer and more expensive coffees. Several Gesha and Pink Bourbon coffees were on display, although they were offered with commercial-grade coffee.

National 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) .

An example is FU Roastery, a coffee brand from Kail in Guizhou province, about 1,600 km from Shanghai. Owned by a Chinese roasting champion, FU Roastery sells roasted coffee through Taobao and BiliBili, as well as its cafes.

Continuing with other trends in the coffee market (notably seen during the HOTELEX Chengdu 2021 event), more and more specialty cocoa and chocolate brands are also beginning to participate in coffee festivals. A prime example is Nibbo, a bean-to-bar brand from Shanghai.

Shanghai Lujiazui Coffee Festival 2021

Shanghai Lujiazui Coffee Festival 2021

A few weeks before FHC, the last edition of the Shanghai Lujiazui Coffee Festival was held from October 28 to 30, 2021.

The Shanghai Lujiazui Coffee Festival was established in 2016 with just 24 coffee brands exhibiting at its first event. Many of these brands were small cafes in Shanghai; some in the specialized sector.

Usually held in the heart of the Lujiazui district, this festival now has some 213 exhibitors. These numbers are not surprising as Shanghai is said to have the most cafes of any city in the world, with over 7,000 cafes.

This is further evidence that China’s coffee industry and interest in coffee in first-tier cities is growing at a blistering pace.

Around 35% of Luijazui’s market share belongs to large coffee chains. Conversely, of the remaining 65%, approximately 50% represent boutique or artisan cafes that use specialty coffee.

While FHC was more popular with domestic brands, a number of major international companies participated in the 2021 Shanghai Lujiazui Coffee Festival, including Starbucks, Lavazza, La Marzocco and McCafé.

Besides food and coffee companies, a number of espresso machine and coffee equipment manufacturers were also present at the event. Their contribution was particularly interesting, as it showed how local brands are increasingly responding to consumer demands for more ethical and environmentally friendly products.

For example, sustainable Chinese brand KAFFTEC (“咖法” in Mandarin) had a big presence at Lujiazui this year, showcasing its cups, tables and seats, all made from used coffee pucks and recycled plastics.

At the same time, emphasis has also been placed on the importance of convenience for coffee consumers in the domestic market. With this in mind, one of the most important trends at Luijazui has been the increase in the number of semi-automatic espresso machines on display. The Chinese manufacturer XLVI (which assembles semi-automatic machines in China from parts imported from Europe) is one of the most prominent examples.

chinese coffee event

How could coffee events evolve in China?

As coffee consumption in China increases, coffee-related festivals and events will likely become more frequent.

The Chinese Coffee Association in Beijing reports that the country’s coffee consumption is growing at an annual rate of 15%. In 2020, an average of one cafe opened per day in the city of Chengdu (the third largest coffee market in the country), now reaching a total of more than 6,000 cafes in the city. This indicates stable growth despite the impact of Covid-19.

However, in many cases, the pandemic has been detrimental to coffee chains in the Chinese market. In January 2020, Starbucks China closed over 2,200 locations nationwide due to enforced social distancing measures.

While the coffee market may have taken a hit, sales of ready-to-drink (RTD) coffee have surged in the country. In 2021, Coca-Cola launched Costa Coffee-branded RTD cold brew coffee in China across more than 150,000 retail outlets, as well as e-commerce platforms – a thriving market in China.

Coffee consumption at home has seen a sharp increase during the containment measures. Specialty instant coffee continues to be popular among Chinese consumers: around 32% of the population reported drinking instant coffee in 2016, and it is reasonable to assume that this number will increase in 2020.

Given these trends, it would not be surprising to see the emergence of coffee events in China tailored to these growing sectors. A shift in focus towards RTD coffee, home consumption and locally produced coffee may become more apparent, although the out-of-home market is steadily showing signs of recovery.

chinese coffee festival

These two coffee festivals are interesting examples of the pace of growth of the Chinese coffee sector.

However, the immediate future of 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, given the closure of many cafes, as well as the cancellation of a number of events and coffee fairs 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 grow 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 improving standards.

Did you like it? then read our article on entering the emerging coffee market in China.

Photo credits: Felipe Cabrera

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