Coffee Intelligence recently published an article titled “Why China’s Demand for Cup of Excellence Coffees Has Shifted” by Sarah Charles, a digital editor at Coffee Intelligence. She is also the lead co-author of the fourth edition of the International Trade Centre’s Coffee Guide and manages communications for the Sustainable Agribusiness Programme.
In her in-depth article, Sarah highlights how the rapid expansion of China’s Luckin and Cotti Coffee has fueled mass-market coffee consumption, leaving ultra-premium lots for a niche audience. She also emphasizes that Japan, South Korea, and Taiwan are emerging as dominant buyers of Cup of Excellence (CoE) coffees as China’s market shifts toward hybrid and trend-driven beverages.
Given the significance of the article’s insights, we at Qahwa World are republishing it in full. However, this does not imply endorsement or agreement—whether in whole or in part—with its opinions or conclusions.
For years, China’s coffee market has been hailed as a rising force, with annual consumption growing at an impressive 15%—far exceeding the global average of 2.2%. International coffee chains such as Starbucks and Tim Hortons expanded aggressively into the country, while local brands like Luckin Coffee introduced ambitious strategies to make coffee more accessible to the masses.
During this rapid growth, China emerged as one of the world’s largest buyers of Cup of Excellence coffees, known for their high quality and exclusivity. However, recent trends indicate a shift—if not a decline—in demand for these premium lots. Countries such as Japan, South Korea, and Taiwan are now purchasing more CoE coffees, reflecting broader changes in consumer behavior and market dynamics.
The shift in CoE demand does not necessarily mean Chinese consumers are turning away from specialty coffee. Instead, it reflects a strategic realignment in purchasing habits.
According to Mau Perez, Purchasing Manager at Shanghai Cooway Trading: “What we’re seeing isn’t a retreat but rather a shift toward origins with the strongest consumer appeal—like Panama, Ethiopia, and Colombia. Chinese buyers are still competing for the most expensive lots, as we saw in the 2024 Best of Panama auction.”
Trade barriers have also played a role in reshaping China’s CoE market. Guatemala, for instance, was unable to export coffee to China for a period, while Honduras only regained access at the end of 2023. These restrictions have reduced competition from certain origins, leading Chinese buyers to prioritize coffees with stronger consumer recognition.
As China’s specialty coffee market becomes more saturated, brands are shifting their focus from prestige-driven purchases to innovation and accessibility. Luckin Coffee, for example, has embraced tea-infused coffee drinks, such as jasmine milk tea coffee, catering to a growing demand for fusion beverages. Meanwhile, popular tea chains like HeyTea and Chagee have intensified competition, emphasizing affordability and mass appeal over exclusivity.
Steve Wu, Marketing Manager at Melitta Professional in China, explains: “The coffee market is similar to the wine industry—there’s room for a broad range of products at different price points. As consumers become more educated, high-end coffee will continue to exist, just as premium wines have their niche.”
However, while specialty coffee consumption is not necessarily shrinking, brands must now work harder to differentiate themselves and engage consumers through multiple channels.
China’s growing preference for convenience is influencing demand. Ready-to-drink coffee options are booming, with convenience stores offering pre-packaged iced coffee solutions as a cheaper alternative to high-end café beverages. In response, Cotti Coffee has announced plans to integrate convenience stores into its expansion strategy.
Meanwhile, social media influencers have accelerated the shift away from high-end specialty coffee, promoting at-home brewing methods and cost-effective alternatives instead of expensive single-origin purchases.
Beyond changing preferences, economic factors have played a significant role in China’s declining demand for CoE coffees.
China’s economy, once booming, is now facing structural challenges—including slowing GDP growth, high government debt, demographic shifts, and rising youth unemployment. These pressures have made consumers more price-sensitive and cautious in their spending.
Major coffee chains are already feeling the effects—Starbucks China, for instance, recently reported a 14% drop in comparable store sales due to growing competition and reduced consumer spending.
In this uncertain economic climate, affordability has become a key priority for Chinese consumers. Unlike a decade ago, when young professionals actively sought out high-scoring, traceable single-origin coffees, today’s buyers are more pragmatic, opting for mid-range or budget-friendly options instead.
The Future of Specialty Coffee in China
Does the decline in CoE demand signal a downturn in China’s specialty coffee market? Not necessarily. Instead, it suggests a transformation in what premium coffee means to consumers.
Rather than focusing exclusively on traceability and exclusivity, the market is shifting toward new premium experiences—ones centered on convenience, customization, and hybrid flavors that resonate with evolving tastes.
According to Mau Perez: “China’s specialty coffee industry is constantly evolving. Buyers are always looking for the next big origin or processing method, especially from countries that have already built strong brand recognition in China.”
Even though CoE sales in China have slowed, other markets—such as Japan, South Korea, and Taiwan—continue to show strong demand for these exclusive coffees. This suggests that Chinese roasters specializing in high-end beans may shift their focus toward export markets rather than relying solely on domestic demand.
China’s specialty coffee landscape is evolving, and CoE coffees—once a symbol of status and connoisseurship—are no longer a dominant force in the market.
However, this does not mean that specialty coffee itself is in decline. Instead, the industry is adapting to new realities, where premium coffee experiences come in the form of espresso-based drinks, bottled cold brews, or hybrid beverages that better align with local consumption habits.
Steve Wu sums up the situation: “Striking a balance between affordability and quality is now the main challenge. Consumers are becoming more discerning, but the price gap between everyday coffee and ultra-premium beans has widened—9.9 RMB for Luckin or Cotti versus 60 RMB for a Panama Geisha.”
“As a coffee drinker, I’d be willing to pay twice the price of a regular cup for something exceptional. But with more affordable options available, the price difference feels even greater, making high-end beans seem less accessible—even though their actual prices haven’t skyrocketed. This perception gap is a significant barrier to specialty coffee’s growth, especially in today’s economic climate.”
Rather than black pour-over brews, the future of high-end coffee in China may come in espresso-based drinks, ready-to-drink options, or even tea-infused hybrids that better match consumer habits.
For now, one thing is certain: China’s coffee market is evolving, and Cup of Excellence coffees no longer fit the mainstream narrative.