Shanghai transforms from a coffee consumption hub to an industrial agglomeration terminal
Relying on the new waterway of Qiankai Port, the transportation time and cost of Peruvian goods to China have been significantly reduced, making Qiankai Port a key channel for local coffee brands to enter China. Seizing this opportunity, Carlos Laford became one of the first players to join the team. After confirming his participation in the Lujiazui International Coffee Culture Festival in October this year, he quickly took action to prepare for the exhibition products and registered and established the foreign-funded enterprise Bilu Coffee (Shanghai) Co., Ltd. in Shanghai.
Since an Australian coffee brand set up stores in China last year, the arrival of Bilu Coffee is the second foreign investment project introduced by the Lujiazui International Coffee Culture Festival in 10 years. Chen Bai, the chief planner of Lujiazui International Coffee Culture Festival, told reporters that in the past 10 years, the global recognition of Shanghai's coffee market has greatly increased, with 1700 domestic and foreign coffee institutions participating in the Lujiazui International Coffee Culture Festival. Many overseas brands have started from participating in exhibitions, gradually investing and establishing operations in Shanghai, promoting Shanghai's transformation from a coffee consumption highland to a global coffee industry hub. The 11th Lujiazui International Coffee Culture Festival, which will be held this autumn, will expand the number of overseas participating cafes to over 60.
At present, although the number of overseas brands registered in China is not very large, its significance is profound – the industry barriers for overseas specialty coffee to enter China have been broken, and an efficient and smooth path of opening up has enabled global coffee brands to deeply cultivate the Chinese market.
From the establishment of the first coffee shop in 1886, to leading the global coffee industry in the 1930s, and now with over ten thousand stores and consistently ranking first in global cities, coffee is no longer a niche consumer product in Shanghai, but deeply integrated into the city's daily life.
However, many people are unaware that the explosive growth of boutique cafes in Shanghai has been achieved in the past decade. In the first year of the Lujiazui International Coffee Culture Festival, the number of boutique coffee brands in Shanghai could be counted by fingers, and chain brands such as Starbucks and Shangdao Coffee were absolute industry leaders, "recalled Lu Yao, one of the founders of Baibai Coffee. When holding the first Lujiazui International Coffee Culture Festival, Chen Bai visited the whole country and only gathered 24 independent coffee brands. On the opening day of the coffee festival, accompanied by a heavy rain, Chen Bai's heart cooled halfway. Only a few thousand spectators came, and there weren't many transactions. The flower pulling performance was considered the climax of the scene
This is the eve of Shanghai becoming the 'coffee capital'. In the following 10 years, with the rise of domestic chain coffee brands such as Manner Coffee and Luckin Coffee, coffee gradually infiltrated the lower tier market and became a daily beverage that, like bottled drinks, was readily available on the streets and alleys.
The booming development of consumer goods exhibitions has enabled the coffee industry to quickly establish a nationwide "network". According to incomplete statistics, dozens of cities across the country have held coffee festivals and exhibitions, attracting professionals from various regions and promoting exchanges between industries. Even the coffee festival in Lhasa, Xizang, can get the help of many well-known exhibitors, independent cafes and world coffee competition champions.
And Lujiazui is undoubtedly one of the strategic points of this industry feast – it was the first to raise the banner of professional exhibitions here, because of the gathering of a huge coffee consumer group of 300000 white-collar workers, becoming a "pilgrimage site" for coffee practitioners nationwide and even globally.
Every October, the Lujiazui International Coffee Culture Festival arrives as scheduled, witnessing the continuous deepening of coffee in Shanghai from a phenomenon symbol to a consumer industry and urban culture.
In the past two years, with the deepening interaction of China's coffee industry, the organizers of the Lujiazui International Coffee Culture Festival have further broken down the theme of the exhibition and started to focus on the word "international". At first, with ambition and expectations, we labeled the coffee festival as' international 'with the participation of only domestic exhibitors. But now it seems like a spark hidden in Shanghai's open genes, shining at the coffee festival in Lujiazui, destined to move towards global participation and sharing, "said Chen Bai.
Since last year, the coffee festival has seen a significant expansion of international exhibitors, with 48 independent coffee shops from over 20 countries around the world setting up their stalls. The vast majority of them did not even have distributors in China before, but they each have world-class green bean resources or technical support from world champions behind them, which is conducive to helping Shanghai's local coffee industry improve and upgrade through communication and interaction.
This year, international exhibitors will further increase, with France alone expected to have no less than 8 independent coffee shops exhibiting. Shanghai Lujiazui will host a truly international coffee expo.
At the beginning of this year, Pudong will include the successful hosting of the Lujiazui International Coffee Culture Festival in the government work report. Obviously, the coffee festival is no longer just a livelihood project aimed at driving consumption, but also an important measure to promote the agglomeration of the local coffee industry and leverage the long tail effect of the festival.
In the 9th year of the Lujiazui International Coffee Culture Festival, the Lujiazui Coffee Culture Industry Center was quietly established in a 5-story office building in Lujiazui. Although there are not many people in the industrial center, it is an important hub in Shanghai that links global resources through "coffee". In addition to bringing domestic brands to participate in exhibitions, this team also imports an average of 80-100 kilograms of coffee beans per overseas brand during the annual festival, as well as handles the entry and exit procedures for overseas baristas and staff. The business resource expansion required by global brands is all completed by this team.
A staff member from the industry center told reporters, "Professional baristas have strict requirements for the freshness of coffee beans, and with the continuous increase in sales during the annual festival, coffee exhibitors from various countries have put forward higher requirements for the timeliness and volume of transportation. However, thanks to the continuous deepening of China's opening-up policy, people and goods from any country entering Shanghai now have convenient ways and efficient processes.
The legendary story of Icelandic coffee merchants selling in 5 days in Lujiazui for a year in the past two years is still vivid in my memory. In recent years, overseas merchants have shown a stronger interest in deeply participating in the Chinese coffee industry. Chen Bai observed that a 5-7 day exhibition can no longer meet the desire of foreign coffee shops to test the Shanghai market. "They generally hope to have a longer operating time in China, but are limited by the risks of early investment and market preparation." Therefore, an innovative business model emerged.
COFFEE CUBE operates through a "one brand per month" model, with the ability to rotate 12 global premium coffee brands for on-site operations annually. Compared to a few days of coffee festivals, it offers a continuous market testing period of up to 30 days. The first COFFEE CUBE located in the central green space of Lujiazui has been in operation since October 2023 and has helped more than 20 overseas brands complete on-site testing. Its revenue has consistently ranked among the top independent coffee shops in Shanghai.
Not long ago, the "Small Lujiazui Business Unit Updating and Upgrading Plan" was announced to the public, clarifying the function upgrading plan of buildings such as Shanghai center and Jinmao Building, and will implement space optimization of composite functions in Lujiazui central green space to form an embedded industrial service space. This means that as the host of the Lujiazui International Coffee Culture Festival, Lujiazui Central Green Space is expected to undertake the landing and growth of the coffee industry on a regular basis. At present, in order to seize the dividends of Xiaolujiazui, COFFEE CUBE has prepared to open a store in Jinmao Building, which is expected to be open to the public during this year's coffee festival.
From then on, the complete industrial opening-up path of Lujiazui has also taken shape: overseas brands can participate in short-term exhibitions and exhibitions, and brands interested in operating in China can rent COFFEE CUBE for longer-term market testing and complete preliminary market evaluations; If the market response meets expectations, the landing registration and investment process can be completed with the support of Lujiazui Coffee Culture Industry Center, and physical stores can be opened in Shanghai.