China's coffee market taking time to brew

Beans or leaves?

Despite the fast expansion, it is unlikely that coffee will replace tea as the number one drink of choice in China, given the longstanding tea-drinking tradition in the country, CCAB Chairman Ji Ming said.

Foreign coffee brands were first introduced to China during the 1980s. Brands such as Nestle and Starbucks have played a significant role in creating a coffee culture in the country.

Yunnan brews up cups of success

Starbucks upbeat about China

Ji said the culture is popular in first-tier cities like Beijing and Shanghai, as well as some southern provinces including Hainan and Fujian. But for most other regions, coffee is still an expensive "Western import".

"Even in Beijing and Shanghai, the coffee consumption level remains stubbornly lower than 30 cups per capita," Ji said, adding that the country's coffee culture is not sufficiently mature.

Annie Huang, general director with Food and Dining Culture Committee of Guangdong Food Culture Research Institute, said that China's younger generation with growing purchasing power are willing to pay more for new experiences.

"To them, Starbucks represents a luxury and fashionable experience. Many of them are attracted by this brand rather than the coffee itself. They can tell what kind of tea is good, but they can't do so with coffee," Huang said.

But Huang also admitted the huge potential for consumption and that the coffee-drinking culture has not yet reached its peak.

Rise of local brands

China's coffee market has been dominated by foreign brands. Starbucks, Barista Coffee and Blenz have grabbed the lion's share of the fresh ground coffee market, while Nestle and Maxwell House have taken over the instant coffee market.

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