by Mintel News
In early December, the biggest Starbucks in the world opened its doors in Shanghai, much to the delight of coffee drinkers who are excited for the new retail location. The newly opened Starbucks Reserve Roastery offers coffee enthusiasts a place to try different kinds of beans and experience different ways of brewing coffee.
Coffee consumption in China is quickly increasing. In fact, research from Mintel’s latest, upcoming report on coffee houses in China estimates the market will hit RMB 60.1 bn in 2017. It’s clear to see why Starbucks has made a large investment in China as part of its overseas development strategy; China is the company’s fastest growing market with more than 3,000 stores across 136 cities. The coffee house chain already has over 600 stores in Shanghai alone—the largest number of stores in any city with a Starbucks presence. Furthermore, the city holds a reputation for being the most welcoming of ‘coffee culture’ in China.
Starbucks Reserve Roastery will be selling its exclusive and expensive coffee beans, and focusing on every step of the bean-to-cup experience. However, according to Mintel research, most Chinese consumers do not really understand what specialty coffee is, which could prove difficult for the brand. In general, Starbucks fans in China tend to be young women aged at 20-39 who live in tier one and two cities; they love Starbucks’ culture and are willing to try some new and interesting products.
At last, this grand store is Starbucks’ answer to the so-called ‘third wave’ coffee movement, which focuses on producing high-quality coffee and considers coffee to be an artisanal foodstuff, like wine, rather than a commodity. While specialty coffee houses are still niche in China, Starbucks aims to stay ahead of the curve.
Summer Chen is a research analyst at Mintel specialising in the foodservice industry in China. She brings to her work previous professional experience working with China Insights Consultancy, with a focus on commercial due diligence and project feasibility analysis.