Lack of pricing power in China's coffee industry Chinese coffee pricing Yunnan coffee production area market

Coffee has become an indispensable commodity in people's life for leisure and relaxation, meeting and negotiation, etc. In recent years, the coffee market I have seen has grown violently, and no country giant dares to despise the Chinese market. However, what is not commensurate with the huge market is that China's original coffee lacks pricing power and can only swing with the fluctuation of international market prices.

Coffee industry lacks pricing power

Shang Pu consulting industry analysts pointed out: Since 2013, under the influence of the international market, China's coffee, is experiencing the price trough in the past five years.

Yunnan Province is China's main coffee production area. In 2010, Yunnan coffee prices reached 41 yuan per kilogram, a record high. However, this year's prices, whether Nestle, Starbucks or Yunnan local brands, gave opening prices of 17 to 19 yuan per kilogram, lower than the same period in history.

The main reason for the decline in China's coffee price is the fluctuation of coffee price in the international market, while the reason for the fluctuation of international market price is the large increase in supply. China lacks pricing power and is always in a passive position in the price war. The international coffee consumption market is basically in a state of balance between supply and demand. Brazil, Vietnam, Colombia and other countries are the main coffee producing countries in the world. In recent years, they have strengthened management and the overall production environment is relatively stable. There are not too many adverse conditions that have led to an increase in global coffee production, with Vietnam alone producing 500,000 tons more than three years ago, so the situation of supply exceeding demand has led to a downward trend in international coffee prices. From 2012 to 2013, coffee production in Yunnan is expected to reach 82,000 tons, but it is still less than 1% of the world's total coffee production of 8.5 million tons. The influence on the world market is almost weaker than that of other big producing countries. In addition, due to insufficient deep processing, insufficient brand cultivation and insufficient market development of China's coffee industry, it can only rely on foreign markets to a large extent, which leads to China's inability to participate in the competition for pricing power. Our country urgently needs to cultivate its own famous brand.

Shangpu Consulting pointed out in the "2011-2016 China Coffee Industry Market Research Report" that: as a big coffee consumer, China is in a passive position in pricing power. In addition to uncontrollable factors abroad, domestic enterprises should practice their internal skills, cultivate and support their own well-known brands as soon as possible, and strengthen management, so as to occupy the right to speak in the competition with foreign pricing power.