Page 340 - 2022 White Paper on the Business Environment in China
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2 White Paper on the Business Environment in China
to expand into other drink categories in future Coffee has shown a great increase in 2021. Early
years. The shrinking population of key younger in 2021, a Chinese company signed a Strategic
consumers and enduring concerns about sugar Cooperation Framework Agreement to purchase
pose challenges to carbonated soda drinks going Ethiopian coffee beans. The agreement between
forward, the report said. With low or no sugar and the Ethiopian government and Luckin Coffee
calories being the new standard, the industry's (China) Co. Ltd. was signed at the Ethiopian Embassy
efforts in product innovation for the purpose of in Beijing in the presence of Teshome Toga, the
bringing "better for you" items will sustain the Ambassador of Ethiopia to China. According to
market's growth, said the report. Sparkling drinks, the agreement, Luckin will purchase up to 2,000
led by flavored sparkling water, will see a small and tons of premium coffee beans from Ethiopia every
positive impact from the COVID-19 outbreak over year from 2021 to 2023, enabling more Chinese
the medium and long term due to their positioning consumers to taste high-quality premium Ethiopian
as a healthy alternative to traditional carbonated coffee at an affordable price and in a more
soft drinks, the report stated. About 28% and 24% convenient way. In his remarks, Toga said 2020
of respondents said that they drank more flavored marked the celebration of the 50th anniversary of
sparkling water and carbonated soft drinks, the establishment of diplomatic relations between
respectively, in the first half of 2021, suggesting the Ethiopia and China, which will continue throughout
popularity of intriguing flavors and carbonation in 2021. He welcomed the signing of the agreement
the market. Though the category of carbonated as part of the celebration of the golden jubilee. The
water has existed for many years, it was not until ambassador also encouraged Chinese companies
recent years that consumers in China started to buy more Ethiopian coffee varieties, construct
paying more attention to bubble water products coffee processing factories in Ethiopia and work on
due to the massive marketing campaign by Genki value addition to further benefit Ethiopian coffee
Forest, a new Beijing-based beverage company, farmers. Guo Jinyi, the chairman and chief executive
said Zhu Danpeng, a food and beverage analyst of Luckin, noted they will continue to provide
in Guangzhou, Guangdong province. Industry Ethiopian coffee to Chinese consumers with a high-
research firm Qianzhan Institute said the size of quality and specialized product to satisfy the needs
the carbonated water market in China is estimated of a diverse consumer base (Opali).
at 15 billion RMB in 2019. It is expected to grow
to 32 billion RMB by 2025. According to Kantar, Coffee has become a lifestyle choice for urban
consumption revenue from carbonated water in Chinese consumers, with multiple types of the
2019 surged 43.9%, far higher than the 5 % increase brewed beverage entering the fray, said a recent
of mineral water. Eyeing the strong growth of the report from consultancy CBNData. In a survey
bubble water sector, which grows at about 20% polling 2,000 consumers in May 2021 from China's
annually on average, according to Zhu, Hangzhou, first- and second-tier cities, over 60% said they
Zhejiang province-based beverage giant Nongfu drink three cups of coffee per week or more. Such
Spring invested in the sector in an effort to drive cities, exemplified by Shanghai and Hangzhou,
up its profits when its main businesses — bottled Zhejiang province, usually indicate higher levels of
water, tea drinks and juice — have seen declines economic development and disposable income.
of various levels. In 2021, Coca-Cola introduced The study found that first-tier city dwellers
AH! -HA!, which is calorie-, sodium- and sweetener- consume 326 cups of coffee on an annual basis, a
free. It has a grapefruit and sea salt flavor along level comparable to that of developed economies.
with a peach oolong flavor. PepsiCo brought in The result dwarfed 280 in Japan, was comparable
its sparkling water category with Bubly, a line of to 329 in the United States and was lower than
calorie-free fizzy water developed in 2018. PepsiCo the Republic of Korea's 367. Chinese millennials
has designed three flavors for Chinese consumers and Gen Z are particularly open-minded and
— peach, grapefruit, and passion fruit. For many hungry for new experiences. This is a major factor
young Chinese consumers, they tend to stick to in the Chinese coffee boom seen throughout the
the sparkling taste and texture which they highly last decade. Millions of young coffee aficionados
appreciate (Zhuoqiong, Sparkling Beverages Soar have been searching for new types of coffees and
in Popularity Among Young Chinese). cafes to try. Like many consumer goods, online
340
to expand into other drink categories in future Coffee has shown a great increase in 2021. Early
years. The shrinking population of key younger in 2021, a Chinese company signed a Strategic
consumers and enduring concerns about sugar Cooperation Framework Agreement to purchase
pose challenges to carbonated soda drinks going Ethiopian coffee beans. The agreement between
forward, the report said. With low or no sugar and the Ethiopian government and Luckin Coffee
calories being the new standard, the industry's (China) Co. Ltd. was signed at the Ethiopian Embassy
efforts in product innovation for the purpose of in Beijing in the presence of Teshome Toga, the
bringing "better for you" items will sustain the Ambassador of Ethiopia to China. According to
market's growth, said the report. Sparkling drinks, the agreement, Luckin will purchase up to 2,000
led by flavored sparkling water, will see a small and tons of premium coffee beans from Ethiopia every
positive impact from the COVID-19 outbreak over year from 2021 to 2023, enabling more Chinese
the medium and long term due to their positioning consumers to taste high-quality premium Ethiopian
as a healthy alternative to traditional carbonated coffee at an affordable price and in a more
soft drinks, the report stated. About 28% and 24% convenient way. In his remarks, Toga said 2020
of respondents said that they drank more flavored marked the celebration of the 50th anniversary of
sparkling water and carbonated soft drinks, the establishment of diplomatic relations between
respectively, in the first half of 2021, suggesting the Ethiopia and China, which will continue throughout
popularity of intriguing flavors and carbonation in 2021. He welcomed the signing of the agreement
the market. Though the category of carbonated as part of the celebration of the golden jubilee. The
water has existed for many years, it was not until ambassador also encouraged Chinese companies
recent years that consumers in China started to buy more Ethiopian coffee varieties, construct
paying more attention to bubble water products coffee processing factories in Ethiopia and work on
due to the massive marketing campaign by Genki value addition to further benefit Ethiopian coffee
Forest, a new Beijing-based beverage company, farmers. Guo Jinyi, the chairman and chief executive
said Zhu Danpeng, a food and beverage analyst of Luckin, noted they will continue to provide
in Guangzhou, Guangdong province. Industry Ethiopian coffee to Chinese consumers with a high-
research firm Qianzhan Institute said the size of quality and specialized product to satisfy the needs
the carbonated water market in China is estimated of a diverse consumer base (Opali).
at 15 billion RMB in 2019. It is expected to grow
to 32 billion RMB by 2025. According to Kantar, Coffee has become a lifestyle choice for urban
consumption revenue from carbonated water in Chinese consumers, with multiple types of the
2019 surged 43.9%, far higher than the 5 % increase brewed beverage entering the fray, said a recent
of mineral water. Eyeing the strong growth of the report from consultancy CBNData. In a survey
bubble water sector, which grows at about 20% polling 2,000 consumers in May 2021 from China's
annually on average, according to Zhu, Hangzhou, first- and second-tier cities, over 60% said they
Zhejiang province-based beverage giant Nongfu drink three cups of coffee per week or more. Such
Spring invested in the sector in an effort to drive cities, exemplified by Shanghai and Hangzhou,
up its profits when its main businesses — bottled Zhejiang province, usually indicate higher levels of
water, tea drinks and juice — have seen declines economic development and disposable income.
of various levels. In 2021, Coca-Cola introduced The study found that first-tier city dwellers
AH! -HA!, which is calorie-, sodium- and sweetener- consume 326 cups of coffee on an annual basis, a
free. It has a grapefruit and sea salt flavor along level comparable to that of developed economies.
with a peach oolong flavor. PepsiCo brought in The result dwarfed 280 in Japan, was comparable
its sparkling water category with Bubly, a line of to 329 in the United States and was lower than
calorie-free fizzy water developed in 2018. PepsiCo the Republic of Korea's 367. Chinese millennials
has designed three flavors for Chinese consumers and Gen Z are particularly open-minded and
— peach, grapefruit, and passion fruit. For many hungry for new experiences. This is a major factor
young Chinese consumers, they tend to stick to in the Chinese coffee boom seen throughout the
the sparkling taste and texture which they highly last decade. Millions of young coffee aficionados
appreciate (Zhuoqiong, Sparkling Beverages Soar have been searching for new types of coffees and
in Popularity Among Young Chinese). cafes to try. Like many consumer goods, online
340
