How China’s taste for coffee is driving up the cost of a cuppa

Twenty years ago hardly anyone in China, a nation of tea lovers, drank coffee. Not many more were aficionados of durian fruit, the globular southeast Asian delicacy best known for its foul smell.

Then, as China’s economy boomed, entrepreneurs sought out new markets and built them where they did not exist. Businessmen like Zhao Hui did for coffee and Bian Ning for fruit what Apple was simultaneously able to do for smartphones, even for China’s notoriously picky consumers.

The result is a cultural phenomenon inside China noticeable to any visitor, and yet another headache for world trade, which has found that changing tastes in a country of 1.4 billion people can have outsize effects on everyday life on the other side of the planet.

As coffee-drinkers will have noticed, the price of a mug, whether instant or a latte in your local Costa, has soared in the post-Covid era.

The Chinese taste for coffee has helped drive the market for the staple robusta bean, used in instant coffees like Nescafé Classic, which is mostly grown in Vietnam. To make matters worse — and pushing up the price of the bean to record highs — the greater profits to be had in China from durian, much of which is also grown in Vietnam, is persuading farmers to switch from one to the other.

“The Chinese coffee market, especially after 2018, was beyond anyone’s imagination at that time,” Zhao, 55, said. He opened Beijing’s first coffee bean roastery as recently as 2009, after working in the import-export business and seeing an opportunity.

Now there are coffee shops all over the city, including cheap chains massively undercutting the prices in Starbucks, and imports of beans are rising by double digit percentages every year. “The era of coffee for all has arrived,” he said.

The coffee we drink comes mostly from two broad types — robusta and arabica. Though both originated in Africa, most robusta beans are now grown in Asia. Although Vietnam’s robusta plantations have been the source of supply worries recently — partly also due to a heatwave attributed by some to climate change — the two types are often blended together and the prices of both have moved in tandem.

In April, robusta prices hit $4,500 a tonne on the London exchanges, where coffee “futures” are traded like oil or gold. That is a level not seen since the 1970s — it was just over $1,000 at the time of the pandemic.

Antonio Baravalle, head of the popular brand Lavazza, described market conditions as “complex”. Nowhere is that truer than in the trade between China and Vietnam, where two entirely separate trends became entwined.

The first durians arrived in China from Thailand in about 2003, with the expansion of internationally flavoured supermarkets. Now the market is worth more than $4 billion annually, and in terms of the amount of actual fruit it increased by almost 80 per cent last year.

“Durians were an extremely niche product 20 years ago,” said Bian, who runs an online fruit and vegetable trading programme. But a few years later the fruit started becoming a “special occasion favourite”. “Durians are not just fruits; they also carry a bit of fashion and mystery,” he said.

By 2016 Pizza Hut was selling durian-topped pizza. Bian said around that time he began conducting auctions for crates of durian, due to their growing popularity. With about half of China’s durian coming from Vietnam, the southern neighbour’s farmers are cashing in, particularly with the variable temperatures affecting coffee plants.

Total robusta production was down almost 10 per cent last year on the year before. Meanwhile the Asia-Pacific region’s consumption has risen 12 per cent in four years.

There is no sign of the trend ending in China. China overtook Britain to become the world’s seventh largest consumer of coffee three years ago — it drank 300,000 tonnes of beans, more than double the figure for ten years ago. Twenty years ago, when coffee was the preserve of foreigners and a few hardy hipsters, it was between 5-10,000 tonnes.

Song Yan, 55, who had her first taste of coffee when her professor father brought a coffee-flavoured sweet back from a work trip to Tunisia, dissolved it in milk and presented it to her as a fashionable western drink, said she now consumes several cups a day.

Like many Chinese, it took her some time to acquire the taste of a more regular brew, finding it bitter. Her father, though a committed leftwinger, associated it with the luxuries he had encountered in the 1980s on trips abroad.

“Influenced by my dad, coffee has always been associated with the good life in my mind,” she said.