China: The Next Big Thing

Sales of tea in China may eclipse those of coffee by a ratio of ten to one, but the growth of the coffee sector in the country is “growing at double digit rates, and shows few signs of slowing,” according to a report from the International Coffee Organization (ICO).

Thanks to its huge size, the country has, in recent years, been primed for expansion and as such numerous domestic, continental and global chains have moved in to take advantage of an eager and emerging audience for coffee.

Any debate surrounding China’s importance to the global market has probably been kyboshed.

The report states that demand for the 2013-14 period reached 1.89 million bags, a substantial increase on like-for-like figures from a decade ago suggesting that the industry has, in all likelihood, quadrupled in ten years.

Yet even with this growth, demand and consumption on a per capita level (0.08kg per person) still lags well behind that of the United States (4.4kg per person).

It’s been predicted that China could consume 4 million bags of coffee by 2020 and if this were to happen they would easily enter the world’s top ten coffee drinking countries and be on a par with other global superpowers such as Russia and Canada.

But what sets China apart is their potential as a producer of coffee.

In China’s southern regions, such as Yunnan, where tea has traditionally been the crop of choice, more and more farmers are switching to coffee. And whilst production levels aren’t anything to write home about, that could all change as domestic and international demand increases.

Since the start of last year it’s believed that Starbucks has imported around 14,000 bags of Chinese arabica.

Now, that amount is a drop in the ocean, but it is part of an interesting wider trend: the majority of coffee grown in China ends up being exported, with Vietnam, Germany and the United States being popular destinations.

With more farmers looking to cultivate beans instead of leaves and more people drinking coffee, if a nation could threaten the current status quo then it’s likely to be China.