How a Brazilian Coffee Brand Conquered China’s Market

When Brazilian coffee brand TABOM CAFE first launched in China, no one wanted to stock it. Priced 40% higher than cheap competitors, the then-unknown brand struggled to convince skeptical restaurant owners and distributors that quality was worth the premium. Its distributor, Hebang Trading (Shanghai), had just three employees, zero brand recognition, and a lot of unsold coffee.

The big question: How did an obscure Brazilian coffee brand not only survive in price-sensitive China but start expanding into retail and plan its own cafés? The answer lies in a shift from direct sales to grocery shelves, smart pricing framing, and leveraging high-end food service channels—plus a little help from the falling cost of ocean freight.

An Obscure Brazilian Coffee Brand Arrives in China

In late 2010, Hebang Trading (Shanghai)—a subsidiary of a Brazilian coffee company—set up shop in a small, unremarkable office in Shanghai’s Xuhui District. The team: just three people. Their mission: sell TABOM CAFE, a Brazilian coffee brand almost nobody in China had heard of. The parent company owned Brazil’s oldest and largest coffee plantation, with 170 years of history and certifications from 11 institutions including ISO and the Brazilian Coffee Industry Association. But in China, it might as well have been invisible.

“Brazilians grow great coffee, but they’re not good at marketing,” explained Xi Qiongzhi, General Manager of Hebang Trading (Shanghai). That was the root of the problem: Brazil, the world’s largest coffee producer (responsible for 35% of global output), had no globally recognized coffee brand. TABOM CAFE faced the same challenge—starting from zero in a crowded, cost-obsessed market.

Why China’s Coffee Market Is Tricky for Premium Imports

China had coffee drinkers, thanks to brands like Starbucks and Nestlé, which helped locals embrace brewed coffee over instant. Starbucks’ focus on fresh espresso also inspired many Chinese to buy grinders and home brewing gear—driving a 20% annual growth in the coffee machine market. Logically, high-quality beans should thrive.

But price sensitivity ruled. While Starbucks sold brewed coffee, TABOM CAFE sold only whole beans. On JD.com, its cheapest traditional roast (454g) retailed for around ¥90; its premium “gourmet” roast cost ¥158. That was steep compared to local offerings. Early attempts to secure distribution through regional agents failed—the market was split between premium importers (focused on Illy and LAVAZZA) and low-cost domestic brands. Supermarkets and hotels demanded high slotting fees Hebang couldn’t pay.

How TABOM CAFE Finally Gained Traction

Hebang’s breakthrough came through F&B channels. Xi and his small team hit the streets, pitching TABOM CAFE directly to restaurant owners—introducing the brand, offering samples, and negotiating orders. In China, unlike the West, few restaurants disclose their coffee brands. Most owners cared more about price than quality. TABOM CAFE’s beans cost ~40% more than cheap alternatives, leading to frequent rejections.

Xi adapted: he reframed the price difference as “just ¥0.40 more per cup.” He avoided pushing direct brand swaps, instead targeting suppliers who served multiple clients. But the road was rough—some shop owners demanded free coffee machines as part of deals; others used fake companies and contracts to scam free meals. Xi learned fast.

The real game-changer was personal connections. Through chefs and friends, Xi landed his first 30 clients—28 via referrals. But word-of-mouth was slow: just one new client per month, each ordering a single box. By March 2011, six months after launch, the company had imported 5,000kg of coffee. A year later, only 1,000kg had sold. The rest were discounted to avoid spoilage. The first year was a costly loss.

The Supermarket Pivot That Changed Everything

The turning point came in March 2012. A Shanghai-based agent serving high-end supermarkets approached Hebang, having discovered TABOM CAFE at an October 2011 trade show. After months of sampling, they offered to distribute the brand. “The best part? They actually liked our coffee,” Xi said.

In November 2012, TABOM CAFE hit shelves at over 200 Ole’ and Cityshop outlets. Profit margins were similar to F&B channels, but supermarket demand was stable and substantial. By then, monthly sales hit 1,800kg—with supermarkets accounting for 40%. Trial tastings and promotions were approved for February 2013.

External factors helped too: reduced Sino-Brazilian trade volumes lowered container costs, letting Hebang import half-containers for fresher coffee at minimal extra expense. Restaurant and café owners, facing more discerning customers, began paying for better beans. The market for premium coffee grew—but so did competition from counterfeit brands. New entrants like TABOM CAFE, untainted by scandal, offered better margins.

What’s Next for TABOM CAFE in China

China’s coffee consumption was still low—just 4 cups per person annually nationwide, rising to 20 in tier-one cities like Beijing and Shanghai. But the market was evolving. According to Mintel, China’s coffee shop count doubled from 15,898 in 2007 to 31,783 in 2012. Xi noted Shanghai’s coffee shop count had doubled since 2010.

Hebang planned to open TABOM CAFE-branded stores in 2013. Two models were considered: a delivery-focused “coffee-only” format (similar to “Zhao Cha”) with franchising options, and a sit-down café with pastries (like Starbucks), using a licensing model. But Xi warned: “We know it’ll take four to five years before we turn a real profit in China.”

Mintel’s survey of 3,000 Chinese consumers also revealed that 1 in 5 urbanites visited coffee shops at least 5 times a year. Food quality ranked as the top draw, followed by beverage quality—but ambiance and atmosphere influenced 15% of patrons.

Frequently Asked Questions

What was the biggest challenge TABOM CAFE faced in entering China?

The biggest hurdle was overcoming China’s price sensitivity. As a premium Brazilian coffee brand, TABOM CAFE’s beans were 40% more expensive than low-cost alternatives, making it difficult to convince skeptical buyers in a market accustomed to cheap coffee.

How did TABOM CAFE finally gain distribution in China?

TABOM CAFE initially struggled with traditional distribution channels but found success by targeting the foodservice sector, particularly restaurants and cafes. Later, a key breakthrough came in 2012 when a high-end supermarket agent agreed to stock the brand after tasting it at a trade show.

What pricing strategy did TABOM CAFE use to attract customers?

Instead of emphasizing the overall higher price, TABOM CAFE reframed the cost difference as just ¥0.40 more per cup, making the premium seem minimal and more palatable to cost-conscious buyers.

Why did supermarkets become a turning point for TABOM CAFE in China?

Supermarkets provided a stable and substantial sales channel with consistent demand. Unlike the unpredictable F&B sector, supermarket distribution allowed for better inventory management and long-term growth potential.

What external factors helped TABOM CAFE succeed in China?

Lower container shipping costs due to reduced Sino-Brazilian trade volumes allowed TABOM CAFE to import fresher coffee more affordably. Additionally, a growing coffee culture and more discerning consumers made premium beans more attractive.

What are TABOM CAFE’s future plans in the Chinese market?

TABOM CAFE plans to open its own branded cafés in 2013, with two models: a delivery-focused coffee shop (similar to “Zhao Cha”) and a sit-down café with pastries (like Starbucks), the latter to be expanded via licensing.

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