Tingyi Holding Corp, a leading food and beverage producer, has inked an agreement with global coffee chain Starbucks to manufacture and distribute the latter’s ready-to-drink products on the Chinese mainland. The move is expected to help the global coffee chain expand its footprint in China, especially in lower-tier cities, where the Seattle-based company does not have much visibility. According to Euromonitor International, a market research firm, the global RTD coffee market volume is expected to surge to 453.8 million liters by 2017, from 297.5 million liters in 2014…Full Article: China Daily Mar 2015

Key Point

  • In 2014, Nestle had a ~55% share of China’s ready-to-drink (RTD) market. The next largest suppliers were Suntory Holdings Ltd with ~14%, Uni-President Enterprises Corp with ~6%, and Starbucks (ranked 7th overall) with just a 1% RTD market share.

ChinaAg Comments

  • According to the Mintel (market research firm), by 2019, China’s coffee market with reach approximately US$14.16 billion.
  • According to the President of Starbucks China, as of December 2014, the company had 1,400 shops located across 84 cities.
  • In January 2013, Starbucks China announced plans to have 1,500 shops by 2015.
  • In November 2012, Starbucks China raised the prices (by CNY 2 or ~US$0.30) of five espresso drinks in 12 cities.
  • In early 2012, Starbucks China raised the prices of espresso coffee, brewed coffee and hot chocolate by approximately CNY 1-3 (average of US$0.30).
  • In 2007, Starbucks began purchasing coffee beans from Yunnan Province, southern China.
  • Coffee production in China is focused on Yunnan province, which accounted for 90% of China’s output in 2012. In 2009, Guangdong province halted coffee production, while Hainan Island produces ~440 MTs annually.
  • Founded in 1992 and headquartered in Tianjin, Tingyi is a major Chinese producer and distributer of instant noodles, beverages and other prepackaged meals. In March 2012, Tingyi and PepsiCo established a strategic beverage alliance. As a result of the partnership, a beverage subsidiary of Tingyi (Asahi Beverages) became the franchise bottler for PepsiCo in China.

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