In our last issue of Café Culture Magazine, we introduced you to Yunnan coffee in China from the aspect of coffee production. But what about the consumer market, which includes specialty coffee?
In this issue, we are bringing you a perspective from three important figures in the Chinese coffee market: Ji Ming, President of the Beijing Coffee Association; David Dai from Kerry Co.Ltd.; and a representative from See Saw, an up and coming café in Shanghai. See the present Chinese coffee market through their eyes, and see how a country with thousands of years of tea culture is being affected by western coffee culture.
Have the consumers accepted coffee as an everyday drink?
Ji Ming: The current Chinese coffee market is at a critical point. Coffee has made its way into people’s lifestyles, but the question now is, “What can we do in order to supply quality coffee to everybody”? We expect this step to be quite short, and a couple of years of hard work should get us there. If the consumers accept the taste and the idea of coffee culture, it’s not hard to predict how this huge coffee market will be in the future.
David Dai: The coffee market is more recognised, but it still cannot replace tea. We need a big company or two to lead coffee into the people’s lifestyle. For example, Nestle was able to push coffee into the everyday life of Chinese, while KFC is the first fast food chain to serve breakfast with coffee. With 4,000 stores across China, these big companies were able to influence how young generations have breakfast. Coffee started from being a complementing drink for breakfast, and Nestle has further imprinted the idea into the people’s lives. In addition, McDonald’s has encouraged the idea of having a different drink for different meals of the day, like a cup of coffee and soy milk with breakfast. These actions are the catalysts that put coffee into the people’s lifestyle.
See Saw: Two years ago, the market wasn’t as recognised as it is today. We now see higher demand, but we must look closer than that. Everyone wants to know coffee. How can we provide the knowledge and increase the consumers’ interests? How can we get them to drink coffee regularly? These questions are the reason we are committed to using specialty coffee to share coffee and educate the consumers, and we try to brew aromatic and tasty coffees. In the early years, we had a customer order a cappuccino without milk! He might have heard the name somewhere, but didn’t know what it looked like. We had a lot of clueless customers before, but this has decreased over the years. That’s why we are happy to share the story of coffee.
We know that specialty coffee is very popular in many Asian countries. The coffee culture has spread to regions that have influences in China, such as Hong Kong and Taiwan. How far has specialty coffee come in the Chinese market?
Ji Ming: In reality, there are always popular trends. At the moment the world renowned Geisha and Yirgacheffe coffees are often recommended to consumers. In addition to those 2 coffees, Kopi Luwak and Blue Mountain are also quite extraordinary specialty coffees that draw people in and encourage them to try a cup or two. Kopi Luwak and Blue Mountain might be pricey, but they make exquisite gifts. These exclusive coffees help spread coffee culture, and so by introducing such coffees, you are spreading specialty coffee and what quality coffee is like. Some might say otherwise, but each step in introducing specialty coffee encourages the demand from the Chinese upper market. Since the majority of the market follows the upper class, everything they eat or drink is usually accepted by the rest of the market. Therefore, encouraging the upper market would directly affect the overall market.
David Dai: In my opinion, specialty coffee is more accepted in Shanghai. Shanghai has a lot of coffee shops owned by foreigners. And since selling only coffee would limit a lot of opportunities, café owners sometimes add bakery to the shop. Apart from missing out on the opportunities and high competition from popular international coffee chains like Starbucks, high rental rates is another factor that pushes coffee shops to operate longer hours and include food in their offerings.
See Saw: There are more people drinking drip filter style coffee today, reflecting that consumers are starting to try other styles of coffee other than instant. South Korea and Taiwan are two excellent examples of specialty coffee development. We believe that the number of coffee shops in China will increase dramatically in the next 2-3 years. Specialty coffee demand is increasing in regional areas in China, but the gap between the big cities and these regions is still quite large. In regional areas, consumers tend to prioritise the ambience of a place, while consumers in the cities are looking for a quality cup of coffee.
A trend worth keeping an eye on is café’s equipment choices. With the growing market, cafés are choosing affordable, multifunctional coffee machines and roasters, while elegance comes to mind when choosing other coffee equipment.
Ji Ming: Coffee shops today are often choosing expensive high-end brewers and roasters. This is called “Coffee Syndrome”. I’m not against investing in quality, but you must consider carefully the function and suitability case by case for each café. A moderately priced coffee machine can provide an excellent cup of coffee, and a state-of-the-art coffee machine won’t always guarantee quality. The barista’s knowledge and skills are the first things that should be considered. This is the reason why we want to encourage people to make good business decisions and not get carried away. A cup of quality coffee requires well roasted coffee beans, and a barista who knows what to do and why they are doing it … just like a chef who doesn’t need the best kitchen tools to cook the best meal.
David Dai: As the rental rate in Shanghai skyrocketed, investors who caught the “Coffee Syndrome” and blindly put their money in the wrong place slowly died away. Cafés here are smarter in buying good equipment, and some are selling the equipment as well as opening an equipment training course. This trend has an influence on how the consumers choose a café, as good coffee beans and state-of-the-art coffee machines have a lot of pull. The trainings are further defined into different types of training, because each student has their own objective. And the training doesnt just allow students to reach their goal; they are a very effective tool in spreading the coffee culture.
See Saw: We travelled to Hong Kong, Korea, and many other countries for research. We know good equipment has the ability to brew a quality cup of coffee, but it doesn’t mean that all quality equipment brews the same coffee. We put specialty coffee beans above pricey coffee machines, and we are committed to serving excellent coffee. We chose a good machine at a reasonable price. However, it wouldn’t be wrong to say that we are a front runner in the coffee market, as we were the the first café to buy a Slayer coffee machine. Therefore, we play quite an important role in promoting specialty coffee.
In the past couple of years, international coffee trainings such as SCAA, SCAE, and Q-Grader have been pushing the success in the Chinese coffee industry.
Ji Ming: Korea is a good example of how barista training is essential in developing the coffee market and encouraging the people to look for better quality. The path China’s moving in now is similar to the path Korea has taken. Previously the Korean market was overwhelmed by low quality coffee. Specific training was needed to ensure people in the industry understood that quality coffee is brewed from high quality coffee beans. This education allows the general public to understand quality, specialty coffee, and the brewing technique.
Education also balances the demand and supply. SCAA and SCAE trainings all reflect the increasing popularity of coffee, in other words, coffee became even more popular after western coffee standards were established. But who’s setting the standard? Currently China is using WBC standards and all baristas are trying to reach that standard. Meanwhile, there are discussions including SCAA and SCAE standards, as these associations have created their own set of standards.
How are the baristas, who play a very important role in this rapidly developing industry, handling the situation?
David Dai: Baristas usually run to renowned coffee shops and large coffee chains like Starbucks, because they guarantee more salary. Generally, baristas in leading coffee shops such as Pacific Coffee and Costa Coffee are native Shanghai baristas, while foreign baristas are often found in indy cafés. When we look closely at Japan, a lot of café owners worked as a barista for years before they decided to open their own shop. In contrast, baristas in China would open a café the minute they have the chance, and this is not an easy task, as Chinese consumer behavior is quite different to other countries.
From the opinions of our three guests and the transformations we have experienced, the Chinese coffee market is continuing to develop. Many associations are formed throughout the country with the aim of building standards for coffee development. Coffee companies are constantly organising coffee training classes to push the industry towards professionalism. Colourful new cafés are found in almost every corner of the city. Baristas and the people in the industry are full of passion, and they are serious about coffee knowledge, especially specialty coffee. With the third coffee wave and continued development in the coffee industry, we firmly believe that Chinese consumers will be able to taste exquisite coffee in the near future.
Written by Coffee t&i Thailand
