Coffee chain, smoke in the cup

Coffee chains are springing up like bamboo shoots after a spring rain. Coffee ranks first among the three largest drinks in the world, and it is also the second largest trading commodity in the world after oil. According to statistics, at present, global coffee bean sales are about 8 million tons per year, and maintain an annual growth rate of 2%. China accounts for about 11% of the market sales. At present, the average annual coffee consumption in China is only 4 cups, and even in Beijing, Shanghai and Guangzhou, it is only 20 cups, which is a far cry from the average annual consumption of 200 cups in neighboring Japan and 140 cups in South Korea.

Interestingly, China's coffee consumption is growing at an annual rate of 15%. It will enter a period of rapid growth in the next 10 years, and the consumption of China's coffee market is expected to reach 300 billion yuan in 2020. This obvious area of high growth has naturally become a promising investment direction for many businesses. In Shanghai, where coffee consumption is 10 percentage points ahead of the country, coffee merchants are fighting fiercely.

Many years ago, it was a foreign thing for Chinese people to send instant coffee. In the seven years from 2004 to 2011, sales of instant coffee in China increased fivefold. TorstenStocker, a retail partner in Greater China at A.T.Kearney, a US-based management consulting firm, said of the Chinese concept of coffee: "five years ago, for most Chinese, coffee was Nestl é three in one."

But the culture of freshly ground coffee has formed in big cities such as Beijing and Shanghai, while Chinese consumers seem to skip the stage of drinking filtered coffee and jump directly from instant coffee to freshly ground coffee. In Shanghai, which has always liked the taste of petty bourgeoisie, more and more coffee drinkers have become accustomed to making cafes or bringing a cup of freshly ground coffee with them.

The expansion of McCoffee

McDonald's founded McCoffee in Australia in 1993, but did not expand globally until 14 years later. Over the next two years, the coffee business accounted for 5% of McDonald's total sales, up from 3%. Thanks to the global financial turmoil triggered by the United States, Starbucks, which costs an average of $4 a cup, makes many daily consumers unable to afford it, and McDonald's sniffed out the business opportunity. In May 2009, McDonald's spent $100 million on McCoffee, launching its biggest marketing campaign since breakfast was sold in 1970.

Chinese who have been drinking Starbucks for 10 years are also the target group of McCoffee. It is reported that wheat coffee, which also uses Arabica coffee beans, uses a steam coffee machine to grind coffee beans on the spot and sell a variety of coffee, tea and pastries. The average price of this so-called "instant grinder" McCoffee is only half that of Starbucks.

McDonald's China told Xinmin Weekly that by the end of 2014, there were more than 800 McCoffees and more than 4000 baristas in the country. It is reported that the baristas of McCoffee are specially recruited and need to receive advanced training from time to time.

KFC is catching up.

McDonald's old rival KFC also began testing freshly ground coffee products in Shanghai in 2009. But it wasn't until November 2014 that KFC officially launched the freshly ground Coffee series to enter the market in an all-round way.

The freshly ground coffee series launched by KFC also uses 100% Arabica coffee beans. Like Starbucks and McCoffee, they only use Arabica beans. Compared with Robusta, another mainstream commercial coffee bean, Arabica is the first choice for freshly ground coffee because of its lower caffeine content and acidity and more aromatic taste. Robusta is suitable for instant coffee. KFC believes that the pricing of the freshly ground coffee launched this time is very advantageous, and the price from 10 yuan is more "close to the people" than similar domestic coffee products.

It is worth noting that KFC did not provide other gimmicks for the coffee series this time. KFC launched the concept of "giving consumers a cup of pure good coffee". Since 2014, KFC has launched a new restaurant based on "Dining Room", abandoning the traditional fast food style and creating a "home restaurant" with custom hanging pictures, drooping downlights, green partitions and long bars, which seems to be more suitable for consumers to enjoy freshly ground coffee. All the new KFC restaurants opened in 2015 will adopt new ideas, and the transformation of old restaurants will be accelerated.

Today, freshly ground coffee is sold in more than 900 KFC stores in Beijing, Shanghai, Guangzhou and Shenzhen. In 2015, KFC is scheduled to launch freshly ground coffee series in 1000 restaurants in no less than 20 cities. It remains to be seen whether it will have an impact on McCoffee or even Starbucks.

The disruption of "family convenience"

In the freshly ground coffee market, there are also family conveniences that come from behind. At present, about 35 per cent of the 1300 stores in mainland China sell freshly ground coffee, Family convenience told Xinmin Weekly. The whole family sells its own brand of coffee, which is mainly produced in Yunnan, with a 12-ounce cup (the equivalent of a Starbucks medium cup), and the price is not much different from that offered by family convenience stores in Taiwan and Japan.

In fact, the coffee beans produced in Yunnan are of high quality and are also Arabica coffee beans, famous for their low consistency and fruity aroma, and have become an important raw material for European coffee drinks in recent years. Big buyers such as Nestl é and Starbucks have invested heavily in Yunnan to ensure the supply of small Arabica coffee beans with mild taste. Because this coffee bean can be used as a mixed ingredient in many kinds of coffee, it is traditionally grown and hand-picked in tropical regions of Latin America and Africa. Yunnan's production in recent years has eased the world's dependence on big Arabica coffee growers such as Brazil and Colombia.

It is reported that each family convenience store with a coffee machine sells an average of 45 to 50 cups of coffee a day, with a record of 180 cups per day, while coffee sales in Shanghai are higher than those in other cities. In order to save money, the whole family is testing the self-service coffee sales model, which is why the whole family can offer 4 yuan a cup of medium American style.

The competition for "convenience store"

At the same time, convenience stores such as 7-Eleven, Rosen and Heathrow are also selling freshly ground coffee, which can not only attract more white-collar workers, but also boost the income of individual stores. However, it is mainly concentrated in big cities, while Shanghai is still the largest consumer market for freshly ground coffee in the mainland.

What does it mean for China's coffee consumption market to sell coffee in convenience stores? We may want to take a look at Japan, the fourth largest coffee market in the world, and Taiwan (23.4 million people), which has a population close to Shanghai.

Japan's five major convenience store chains (7-Eleven, Rosen, Family, OK convenience Store, Mini Island) have more than 43000 stores selling freshly ground coffee. This does not affect the business of coffee chains such as Starbucks, because consumers value the atmosphere offered by Starbucks more than the coffee itself. The real hit is canned instant coffee, because 30% of consumers who bought canned coffee from convenience stores in the past have switched to freshly ground coffee.

On the other hand, people in Taiwan especially accept freshly ground coffee in convenience stores. In 2007, ground coffee has spread to the top four convenience stores on Baodao-7-Eleven (5000), the whole family (2915), Laierfu (1300) and OK (880). Taiwan 7-Eleven also invited Guilun magnesium to endorse its own brand coffee City Caf é, pushing convenience store coffee to the best part. In 2013 alone, 7-Eleven sold 200m cups of coffee, making the convenience store brand the largest inexpensive coffee shop in Taiwan, accounting for 80 per cent of the local coffee market.

There are significant regional differences in the Chinese mainland market and consumers' acceptance of coffee is different in different places. At present, the main battlefield of convenience store coffee is still in first-tier cities, as for second-tier cities and below are almost negligible, even in Taiyuan, Shanxi Province, which ranks third in China's urban convenience store index, the promotion effect is poor. Domestic convenience stores need time to grind the best part of freshly ground coffee sales.

The defense of Starbucks

Although fast-food giants such as McCoffee want to retain more diners, consumers in China's big cities are still used to spending time with American-branded Starbucks or British branded Kashijia. Many coffee drinkers privately admit that if it is a blind test, different brands of the same kind of coffee may not make a difference, but the first choice for dating is a more stylish cafe, even if it is take-out coffee, whether the Logo on the cup cover is enough and stylish is also an important consideration. Convenience stores that offer take-away coffee only offer coffee, which poses no threat to coffee chains such as Starbucks that sell in the atmosphere.

According to a 2013 report by China Business Weekly, Starbucks has used a fully automatic coffee machine, which usually makes a cup of coffee in 30 seconds. Starbucks' main competitor, Kashijia, still uses a semi-automatic coffee machine. This kind of coffee machine puts more emphasis on the handmade experience and skills of the staff, and the taste of the coffee will be more intense. The fully automatic coffee machine not only allows Starbucks to improve the speed of making drinks, but also allows employees to get started quickly after simple training, which meets the needs of rapid expansion.

In the era of mobile payments, Starbucks' keeping pace with the times has also made its users more sticky. Starbucks released its first mobile app in 2009 and integrated its mobile payment function in 2011. After logging in to the account through the membership card number, users can not only query all personal account information, but also directly complete the recharge of the personal credit card to the membership card. When spending at a Starbucks store, the payment can be completed by directly scanning the QR code of the member account in the mobile app at the cashier. Through mobile payment, this can not only prevent customers from losing patience and giving up shopping in long queues, but also drive the sales of more products. Mobile payment takes an average of only 6 seconds, which is nearly 2% less time than swiping a credit card transaction over the counter. People often go out without a wallet, but very few people go out without a mobile phone, and the use of mobile payments can lead to extra spending.

In China, although there is a Starbucks App, it has not yet launched wireless charging services and mobile order / payment functions. Liu Kuang, founder of Shopuanbang Information, said that if Starbucks trains Chinese "Starfans" to become loyal users of mobile payments, Starbucks is likely to become China's largest offline mobile payment platform, which is a threat to Alipay.

There are cafes all over the city

In 2002, the British Association for Economic and Social Research allocated $250000 to Eric Laurie (Eric Laurier) and Chris Ferro (Chris Philo), two professors at the University of Glasgow, to study the social factors behind the rise in the number of frequent caf é s in British society. The result of their three-year research is that the cafe has a comfortable environment, where people can enjoy themselves or invite friends to have a good time. This conclusion may also apply to today's China. Sales of Chinese coffee chains reached 20 billion yuan in 2013 and are expected to exceed 40 billion yuan by 2017, according to Euromonitor. More and more enterprises see business opportunities from it.

Tianjin GouBuLi Group announced on January 21 that it had won the permanent right to use Gloria Jean's Coffees, Australia's largest coffee chain, in China. Tianjin Senyongtai Restaurant Co., Ltd., a wholly owned subsidiary of GouBuLi Group, will be in charge of the operation of the coffee shop. Xiaonanguo Restaurant Holdings Co., Ltd., which is positioned as a mid-and high-end restaurant, announced that it will spend HK $195 million to acquire a 65% stake in ParknShop (Hong Kong) Limited's China, Hong Kong and Macao business, cross-border coffee and popular Western-style leisure catering business, and plans to open 3-5 Pokka Caf é brand coffee chains in Chinese mainland this year.

In the past two years, it is pointed out that Korean coffee shops are also expanding rapidly in the Chinese market. According to the "Research report on the Development trend of Korean Coffee shops in China" released by RET Ruiyide China Commercial Real Estate Research Center, Korean coffee shops have opened nearly 600 stores in China in the last two years. According to statistics, Starbucks has expanded the fastest among European and American coffee shop brands in the past two years, opening an average of 77 stores a year; the outstanding brand of Taiwan coffee shop is Shangdao Coffee, which is expanding at an average rate of 59 per year; and among Korean coffee shop brands, coffee accompany you is the most outstanding. 407 stores have opened in China in just two years, and the momentum of expansion even exceeds that of Starbucks. Moreover, Korean coffee shops that have late entered the Chinese market often choose to open stores in the suburbs of first-tier cities and second-and third-tier cities in order to avoid direct competition with Europe, the United States and Taiwan.

Perhaps in the near future, many Chinese people can declare: "I am either in a coffee shop or on my way to a coffee shop."

The material comes from the Internet, revised and edited by the country of Coffee, and the copyright belongs to the original author!