RTD Coffee in China

PROSPECTS

New players drive innovation of RTD coffee

Given key players’ relatively standard products, new players see an opportunity to enter this category offering differentiated products. Online chilled RTD coffee brand Never Coffee opened an offline presence in 2017 and unlike many other products, Never Coffee directly extracts from coffee beans instead of using coffee extract liquid.

Speciality RTD coffee and formula upgrade are emerging

As coffee shop culture and health awareness penetrate more consumers, especially those well-educated consumers with relatively strong consumption power and established coffee drinking habits, RTD coffee products are losing popularity to hand-crafted coffee products for their better quality and increasing availability. To maintain young and more sophisticated consumers, speciality RTD coffees and formula upgrades are emerging.

COMPETITIVE LANDSCAPE

Wei Chuan Foods Corp records fastest growth

Wei Chuan introduced its first bottle of chilled RTD coffee under the Bernachon brand in Shanghai back in 1996. Targeting middle- to high-end consumers with the brand slogan “The answer is always coffee”, Bernachon mainly focuses on convenience stores and premium supermarkets.

Nestlé (China) Ltd maintains dominance by focusing on mass market

Nestlé (China) Ltd maintained its dominant position in both volume and value terms in 2018. Most of Nestlé’s revenue comes from Nescafé, an RTD coffee brand with wide geographical coverage and retail channel network.

Brands from mainland China struggle in RTD coffee

As an exotic product, RTD coffee has developed earlier and more strongly in developed countries and regions, guaranteeing multinational and Taiwanese companies’ advantage in both technology and brand reputation. Jiangsu Mocca Food Co Ltd and Hangzhou Wahaha Group Co Ltd are among the few enterprises in mainland China undertaking mass production of RTD coffee but both are facing sales decline.

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