Luckin Coffee’s deal for Brazilian beans ensures steady supply as plans for US market entry develop

BRAZIL – Top coffee exporter Brazil, just got a significant boost as China’s Luckin Coffee committed to purchasing the equivalent of four million bags of beans between 2025 and 2029, guaranteeing sustained demand from one of the fastest-growing markets.

The deal is between Luckin and the Brazilian Trade and Investment Promotion Agency, and follows a previous partnership signed in June, when the Chinese company agreed to buy the equivalent of two million bags by the end of 2024.

While the love of coffee in China is relatively new, the country has recently grown to be a major buyer in a market that has the US and Europe as top consumers.

Brazilian coffee exports to China were insignificant a decade ago, but last year the Asian nation emerged as the sixth-largest market for Brazilian coffee beans.

Brazilian green coffee exports to China reached a record of more than 1.3 million bags in 2023, according to data from the country’s Ministry of Development, Industry, Trade and Services.

However, data for this year suggests a slowdown, though shipments from January through October are still above the historical average for that period.

The world’s second-most populous country is witnessing a rapid surge in coffee consumption, sparking intense competition between local and foreign coffee chains.

Over the past year, the number of branded coffee shops in China has grown by an astonishing 58%, reaching nearly 50,000 outlets, according to Alegra Group, a company that tracks the growth of coffee chains.

Chinese companies like Luckin Coffee, Cotti Coffee, and Manner Coffee are expanding aggressively, along with independent local cafés, especially in large cities such as Beijing and Shanghai.

Luckin Coffee alone has added 5,059 stores over the past 12 months, while Cotti Coffee has opened 6,004 outlets, underscoring the aggressive push by local players to capture market share.

The coffee chain also plans to expand into the US market as early as next year, already making its presence known through advertising. The company has been running advertisements during NBA games to build name recognition ahead of its planned launch, added one of the sources.

 To trim down the dominance of its rival Starbucks, Luckin Coffee plans to “undercut U.S. incumbents by selling drinks priced around US$2 or US$3.”

This deal with Brazil will ensure a constant supply of beans to facilitate the entrance of the coffee chain into the US, where the number of consumers has increased by 37% since 2004—marking the highest levels in over 20 years.

According to the NCA’s 2024 NCDT report, 75% of American adults drank coffee in the past week—an increase of 4% since the spring 2023 report.

Interestingly, consumption increased the most (by 9%) among consumers aged 60 and over, while people aged between 25 and 59 reported a 4.5% rise in the number of times they drank coffee in a week. For those aged between 18 and 24, coffee consumption held steady at 47%.

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