Chinas retail packaged coffee sector grew at a compound annual growth rate (CAGR) of 18.4% from 2007-12 to reach a market value of RMB9.2 billion

Chinas retail packaged coffee sector grew at a compound annual growth rate (CAGR) of 18.4% from 2007-12 to reach a market value of RMB9.2 billion. The market rose with the continuing expansion of instant coffee at 17.3% CAGR, fresh ground/brewed coffee at 41.4% CAGR, and RTD coffee at 18.7% CAGR. The coffee market has been growing due to a combination of external drivers: increasing population and urbanisation, a rising income level, changing lifestyles, and a growing affinity for Western culture and acceptance of Western taste. The growing middle class, open-minded young people, and Westernised working professionals that constitute the main coffee consumers in China today have increasingly adopted the coffee culture, fuelling the development of the market, especially the premium segment. Their growing desire for quality as well as a broad assortment of coffee varieties has been driving the need for premiumisation of the market. The highest value increase is exhibited in non-liquid fresh coffee including beans and ground/brewed coffee with a 4.6% CAGR in volume but a significant 41.4% CAGR in value, which can be attributed to the growing popularity of the segment and its continuing price increase over the other two segments.
 
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