CHINA DAILY | HONG KONG EDITION Friday, October 16, 2020 | 15 BUSINESSFOCUS
By WANG ZHUOQIONG occasions keep expanding,” Zhou [email protected] said. “We will continue to invest in Wang Jun has fallen into a cozy China and grow more rapidly routine at a multinational company Office coffee options become through our Costa Coffee Express in Beijing. business.” The 27yearold buys Starbucks Currently, the freshlybrewed coffee at her office vending coffee vending machines, which machine every working day. The require monthly payments from price is almost half that of the common perk of the job employers, allow employees to branded store downstairs and the purchase each cup of coffee backed wait time is next to nothing, so it’s a by subsidies from employers. nobrainer. However, the model still requires To get a good cup of coffee at one’s Caffeinated beverage consumption during working hours growing steadily time to gain traction as consumers office is even more valuable in the must first cultivate a strong coffee pandemicrelated era, Wang said. as more consumers still prefer social distancing consumption habit and culture to “We are busy at work and have no develop a large enough network to time to buy coffee at the store down boost profits, said Kantar’s Yu. The stairs. And coffee deliveries can no vending machine business has longer reach our office due to the faced major challenges from pros preventive measures taken by the perous delivery services of coffee office building,” she said. and tea chains. The We Proudly Serve Starbucks According to the report service, operated by Nestle Profes “OnPremises Coffee Consumption sional, provides maintenance on a in China” commissioned by daily basis, which means constant research firm Mintel, the country’s refills of fresh beans and milk when onsite coffee market value was supplies run low. thought to have hit 42.6 billion “My colleagues have expressed yuan ($6.33 billion) in 2019 and high levels of satisfaction with the will likely see an annual growth coffee services thanks to the coffee’s rate of 15.6 percent from 2020 and affordability, convenience and qual 2024. ity,” Wang said. Starbucks has enjoyed a steady Wang is among a rising number of outlet expansion and had 4,700 office workers at multinational stores in the country as of Septem firms or leading IT companies that ber. The Seattlebased company is have seen automated coffeebrew on track to open 500 new stores ing machines installed in their this fiscal year in China despite workplaces as part of workplace the ongoing headwinds from benefits for employees. COVID19. In April, Starbucks “Coffee and tea consumption dur announced a strategic partner ing working hours has grown stead ship with investment firm ily since the outbreak of the Sequoia Capital China to further pandemic, fueled by social distanc digitalize its retail experiences ing restrictions,” said Jason Yu, gen and optimize operations. A month eral manager of Kantar Worldpanel earlier, the company unveiled China. plans to build a Coffee Innovation “Coffee vending machines offer Park in China to extend its global more choice and convenience to roasting network. employees,” Yu said. The race has been further esca Coffee drinking is considered an lated as Canadian coffee chain Tim integral part of office culture in Hortons’ China unit plans to open many workplaces in China and 20 new stores in Beijing by the end many offices have been providing of this year as part of its efforts to instant coffee as refreshments. have 1,500 stores over the next nine But consumption survey updates Above: An employee buys have seen strong growth opportuni years in China. have encouraged employers to hire Starbucks coffee at a vending ties in lowertier cities, online sales More players have entered the better catering services to attract machine beside his workspace and among younger consumers,” market and have taken different and keep top talent, he added. in Beijing on Wednesday. Ho said. positions, such as focusing on The market has seen the blos Left: A Nescafe coffee machine Costa Coffee’s vending machine affordability or specialty coffees. soming of office coffee businesses, awaits customers in an office business — Costa Coffee Express — Meanwhile, in order to encourage including Nescafe Office cafe as building in Beijing. signed a collaboration agreement more purchases, businesses are well as freshly brewed coffeemak PHOTOS PROVIDED TO CHINA DAILY in September with COFCO Coca working to develop more con ing machines such as Costa Cola to further expand its coffee sumption occasions including Express and We Proudly Serve vending machine network in China meals, leisure events and energy Starbucks. entered many large companies “to better cover the daily demand boost needs. Nestle Professional, the food ser across the country, Nestle said. for coffee at work”. Offices have been the primary vice business of global food and bev Coffee has been the engine of Costa Coffee has more than battlefields for coffee players, said erage giant Nestle SA, has been Nestle’s business growth in recent 10,000 vending machines outside of Li Chen, deputy director for food providing consumption services years. As a major global coffee pro China and it entered the Chinese and beverages at Mintel. outside of homes or via business ducer, Nestle owns three major market last August. Yet a segmented market offers channels including caterers, restau coffee brands: Nescafe, Nespresso In March, Costa Coffee rolled out more opportunities. The volume of rants, cinemas and offices to cap and Starbucks’ packaged coffee its readytodrink coffee products coffee consumed at places of work ture the rapid growth generated Nestle CFO Francois Xavier Rog business. The coffee category is and expanded its distribution has been on the rise, Li said. from consumer demand. er said earlier last month that they showing a rapid growth trend in through COFCO CocaCola’s net As the coffee drinking market Nestle Professional kicked off its The penetration of are very happy with this acquisi China. work in supermarkets, conve matures, the sector has been Nescafe Office cafe business last tion. “It was not $3 billion in size Adrian Ho, senior vicepresident nience stores and vending enriched in recent years with mul March in China to address chang coffee consumption when we bought it, it was $2 bil of Nestle’s coffee business in Chi machines. In six months its RTD tiple retail products including ing demands of consumers, and has is still quite low. We lion,” said the CFO. “But last year we na, said coffee is a high growth cat products are available in more than instant coffee, RTD coffee, conve discovered that more people are added another $300 million in egory for Nestle and the coffee 10,000 retail outlets. nience storebrewed coffee and choosing to purchase coffee within have seen strong sales, which is very good. This year consumption market in China has Zhou Liewen, general manger of branded vending machines, she their office spaces, according to growth opportunities we are very happy. We are growing great potential to continue to Costa China, said China is the most added. Nestle. at a strong doubledigit level for grow. significant global market for Costa “With flexible working models The Switzerlandbased company in lowertier cities, Starbucks.” The per capita annual coffee con and they continue to see immense widely adopted, thanks to the pan acquired the perpetual rights from online sales ...” In China, the We Proudly Serve sumption volume is only eight cups potential in the Chinese coffee demic, workplace coffee consump Starbucks in 2018 to market Star Starbucks coffee program that in China, while the figure is 400 market. tion has also been extended to bucks consumer packaged goods and Adrian Ho, senior brings a range of coffee beverages to cups in Japan and 700 cups in “With the increasingly diversified homes, creating more coffee con vicepresident of Nestle’s food service products globally, out coffee business in China workplaces or catered locations France. “The penetration of coffee coffee consumption categories and sumption opportunities and better side of the company’s coffee shops. was launched last year and has now consumption is still quite low. We ways to drink coffee, consumption quality,” Li said. Hot brews taking on unique, creative new flavors in convenience stores
By WANG ZHUOQIONG delivered to selected addresses. increasing number of smallsized They use arabica coffee beans that coffee shops. Dazhaxie, or hairy crabs, and are roasted domestically. FamilyMart’s ParCafe plays an salty egg yolks, popular mooncake Priced at 12 yuan ($1.78) a cup, important role in this market and is fillings, are both autumn delicacies coupons and specials are often expected to see quick expansion. that have also become new coffee available, which bring it down to Moreover, a new player, Easy Joy flavors at a convenience store chain around 5 yuan or 6 yuan. Cstore, has entered the market and in Beijing. “Coffee sales in business districts opened Easy Joy coffee houses. But don’t be put off by the names or near office buildings have been Sinopec’s Easy Joy is planning to of these odd new flavors. impressive, with US coffee and latte capture more market share by tak The new drinks do not contain being the most popular,” said Xue ing advantage of its numerous any actual crabmeat or eggs. They Enyuan, executive director of Bian Cstores. However, the expansion simply “borrow” aspects of the fla lifeng convenience stores. will take time, given that people vors from the crab and yolks to cre The convenience store chain has who often drive on highways are ate new coffee fusion tastes. rolled out new flavors by seasons not heavy coffee drinkers. Also, Bianlifeng, the Beijingbased digi and occasions to lure consumers to there are many energyboosting talfriendly convenience store challenge their conventional ideas. beverages with more convenient chain, developed the unique freshly “The overwhelming response from onthego packaging that are sold brewed coffee flavors to attract the market has extended the new in Cstores at highway rest stops, adventurous young consumers. autumn flavors,” Xue said. which are strong competitors of They are also attempting to form a According to research firm Mint onsite coffee. beverage “challenge” on social el Group’s report “Onpremises “Coffee at convenience stores has media among trend followers Coffee Consumption in China” grown well in China, boosted by through such innovations. released in December, many conve their competitive prices compared With more than 1,500 stores, nience stores in China are running with those of traditional coffee Bianlifeng has installed Switzer onsite coffee businesses and their chains,” said Jason Yu, general man landmade selfserve vending coffee outlets have benefited from Baristas prepare coffee at an Easy Joy cafe, a brand of Stateowned gas and petrochemical enterprise ager of Kantar Worldpanel China. machines to consumers to make quick expansion as convenience Sinopec, in Suzhou, Jiangsu province. HU QINGMING / FOR CHINA DAILY “Brewed coffee at convenience their brewed coffee of choice in less stores have already expanded and stores offers immediate satisfac than a minute. cover a large area. tion for consumers. The new retail Consumers can fulfill their orders Li Chen, deputy director for food cially during breakfast hours. Price which are also closer to workpla next five years, market volume is model that enables delivery to con through Bianlifeng’s mobile appli and beverages at Mintel, said sensitive consumers are often will ces, she said. expected to grow at an annual sumers’ homes or offices from con cations and WeChat miniprograms brewed coffee at convenience ing to trade down to have coffee In China, onpremises coffee out growth rate of 11.9 percent. The venience stores is also attractive,” at stores, and their orders can be stores is often sold with food, espe drinks at convenience stores, lets reached 126,000 last year. In the market is mainly driven by the Yu said.