Why Most European Cafés Offer Decaf Espresso — But Chinese Cafés Rarely Do | Specialty Coffee Market Analysis

 Over the past decade and more of visiting cafés, I’ve accumulated quite a large mental sample size. Along the way, I’ve noticed certain recurring patterns and regional differences. One observation stands out in particular: in most European and American cafés, there is almost always a decaf espresso bean among the regular offerings behind the bar. In contrast, it’s rare to see a café in China consistently stocking a decaf option for espresso drinks.

Today, I’d like to use this contrast as a starting point to explore what drives such different market demands.

In reality, the types of drinks a café offers reflect the true needs of its local community. These visible differences speak to deeper distinctions in consumption habits and cultural stages between domestic and international coffee markets. At the core of it all lies a difference in consumer awareness and demand.

In mature coffee markets across Europe and North America, coffee is as routine as drinking water. Many people consume multiple cups a day. Consumers are generally aware of their caffeine sensitivity and intake limits. Choosing decaf is often a deliberate and informed health decision—one that allows them to enjoy the flavor of coffee in the afternoon or evening without disrupting sleep or experiencing caffeine-related discomfort. It’s a proactive and mature form of consumption.

In China, however, the primary drivers of coffee consumption are different. Coffee is often tied either to social occasions or to the functional need for stimulation. Its “functional” value—especially as an energy booster—remains central to why many people drink it. A large portion of consumers either don’t fully understand decaf or hold the belief that “If I’m not getting caffeine, what’s the point of drinking coffee?” As a result, the group of consumers actively seeking decaf has yet to reach meaningful scale. Given such concentrated demand, keeping a dedicated decaf espresso bean behind the bar may seem impractical—simply because the turnover would be too low.

Another important factor is the difference in market development stages.

Overseas coffee markets are highly mature, even somewhat stabilized after decades—sometimes over a century—of growth. In such environments, consumer preferences tend to become increasingly personalized. At the same time, as more people pay attention to health and wellness, many lean toward more conservative and health-conscious consumption choices. Decaf, as a niche option, has secured a stable foothold.

In contrast, although China’s specialty coffee scene has developed for over a decade, it is still in a phase of rapid expansion and popularization. The market is transitioning from “nonexistent to available,” and from “available to refined.” For many cafés, the primary task is still to introduce more people to specialty coffee—to encourage trial, understanding, and appreciation. The focus is on leading consumer awareness and meeting mainstream functional demand. Decaf, being a more niche and advanced preference, simply ranks lower in priority.

Supply chain considerations and cost structure also play a significant role.

Decaf beans are not inexpensive. The most common methods today—such as the Swiss Water Process or sugarcane (EA) decaffeination—aim to remove caffeine while preserving as much flavor as possible. These green beans typically cost significantly more than regular beans.

In a market where demand for decaf remains limited, dedicating a separate espresso grinder hopper to decaf represents not only higher procurement costs but also slower inventory turnover. Low turnover increases the risk of beans going stale. For most cafés operating with efficiency as a priority, this simply doesn’t make strong economic sense.

There is also the lingering “stigma” surrounding decaf.

Historically, traditional decaffeination methods relied on chemical solvents. These early processes often compromised flavor and raised health concerns among consumers. Combined with the fact that older decaf coffees often tasted flat or unpleasant, many people formed lasting biases against decaf.

Today’s decaffeination technologies are far superior. I’ve personally tried sugarcane-processed decaf beans that retained impressive flavor integrity—so much so that without being told, it would be difficult to detect they were decaffeinated. Yet across the broader market, the belief that “decaf just doesn’t taste good” still persists.

And if a café chooses high-quality decaf beans to overcome that bias, we circle back to the issue of cost once again. The outcome, therefore, becomes almost self-explanatory.

That said, the development of coffee culture varies dramatically from city to city within China. In fact, you can observe almost every stage of specialty coffee evolution somewhere in the country. In some cases, there’s still room for what we might call “information asymmetry profits.”

In first-tier cities where the coffee market is more mature, café owners are increasingly thinking about how to serve segmented consumer needs. More consumers are paying attention to sleep quality and caffeine intake. Wanting a “stress-free” cup of coffee at night has become a form of self-care and personal indulgence. This demand is indeed growing.

There are also practical considerations: among coffee lovers, some are pregnant. It’s unrealistic to expect them to completely give up coffee throughout pregnancy. Offering a decaf option for pregnant customers and other special groups is gradually becoming a mark of thoughtfulness and human-centered service for certain cafés.

So when I occasionally encounter a café that keeps a decaf bean as a regular offering, I see it as more than just a menu choice. To me, it reflects professionalism—and a deeper awareness of service.

How China’s Specialty Coffee Market Exploded in the Last Decade

 I first entered the world of specialty coffee around 2010. At that time, the development of specialty coffee across China was still in its infancy. Most people still viewed coffee as a “bourgeois lifestyle,” a bit of a luxury, something bitter, something you couldn’t drink without sugar... and so on.

But do you know how dramatically China’s specialty coffee landscape has changed in the past 10–15 years? What happened along the way? Today, based on market reports and data I’ve reviewed, let’s take a look back together.

We can begin with some tangible, quantifiable data.
In the past decade, China’s coffee consumption has grown by 150%. The trade of green coffee beans has surged, with demand for imports from Brazil and Ethiopia skyrocketing. In 2023–24, Brazil’s coffee exports to China increased by 186.1% year-over-year. Domestic coffee consumption in China has been growing at an annual rate of over 15%—more than five times the 2023/24 global average reported by the International Coffee Organization. Total consumption has risen from just over two million bags in the early 2010s to more than six million bags today.

This reflects a fascinating reality. China doesn’t have a long coffee-drinking history. Coffee, as an imported cultural product, barely caused a ripple during the first and second coffee waves.

But with rapid economic development, people began seeking emotional comfort and lifestyle enjoyment beyond basic needs. Meanwhile, the arrival of the third wave meant that many young people’s first real exposure to coffee began directly with third-wave concepts.

This structural “jump” allowed China’s coffee consumers to more easily embrace new ideas about coffee. Many enthusiasts today care deeply about bean quality and origin.

We also have to acknowledge the distinct structure of China’s current coffee market: a high-end specialty segment and a commercial segment.

The commercial market’s goals are consistent—competitive prices and decent quality.

But the high-end market is driven by much more specific demands. Producers and green bean traders often note that Chinese buyers prioritize origins with strong consumer appeal, especially Panama, Ethiopia, and Colombia.

For example, China has become the fifth-largest importer of Ethiopian coffee. In the 2024/2025 fiscal year, Ethiopia exported more than 34,000 tons of coffee to China, generating over $218 million in revenue.

Domestically, many young consumers love Ethiopian coffees because of their citrus, floral, and fruity flavor notes—many feel these coffees offer a “perfect match” in taste profile.

If we zoom out and look at Europe or North America, we see a different picture. In the U.S. and U.K., where the third wave has long matured, the specialty coffee market is saturated, leading to market cannibalization and fierce brand competition.

In contrast, the third wave has only recently begun in parts of Europe. Despite ongoing growth, the overall market size is limited.

During my visit to Serbia in Eastern Europe, I noticed that specialty coffee consumption is rising among young people, but the number of specialty cafés remains small and concentrated. In some cities, you may be able to identify fewer than 10 specialty coffee shops — and that’s essentially all of them.

More data for comparison:
From 2013 to 2021, Romania’s specialty cafés grew from only 3 shops to over 120.
Hungary now has more than 150 specialty cafés.
But even so, the overall scale remains small, with tight ceilings.

In comparison, China’s specialty coffee market clearly has massive potential. What’s even more encouraging is that China is also a coffee-producing country. Over the past decade, China’s domestic production has been quietly booming.

In 2024, Yunnan exported 32,500 tons of coffee—an astonishing 358% increase year-over-year.

If you’ve visited cafés abroad recently—especially in parts of Asia—you may have noticed that some specialty shops now include Yunnan beans in their blends. I’ve personally seen this during café visits and bean purchases over the past year.

In short, China’s coffee boom isn’t just a trend—it’s a structural transformation. For producers and green bean traders, the opportunities are enormous.

1 Billion Chinese Have Never Tried Coffee? How Deep Is the Urban-Rural “Coffee Gap”?

 Outside a trendy café on Nanjing West Road in Shanghai, young people line up holding seasonal “Osmanthus Latte” cups for photos. In office buildings, coffee delivery lockers are restocked by riders every ten minutes, with a single locker serving over 300 cups daily. Thousands of miles away, at a county market in Yichang, Hubei, vendor Lao Wang’s drink cart prominently advertises “soy milk, black tea, iced cola,” while the word “coffee” appears in tiny print at the bottom of the menu. When middle school students ask about it, he laughs and waves them off: “That stuff tastes bitter like herbal medicine. I hear it keeps you awake all night. Better grab some black tea—three yuan, quenches thirst and calms you.”

These starkly contrasting scenes paint a vivid picture of China’s coffee consumption market. According to professional estimates for 2025, between 1 billion and 1.27 billion people in China have never had coffee. Behind this number lies a complex landscape shaped by consumption tiers, cultural differences, and market development stages.

This enormous figure isn’t a marketing gimmick or a simple statistical trick—it’s the result of varying definitions and consumption habits colliding. To understand it, we first need to peel back the statistical fog behind “penetration rates.”

The 2025 China Coffee Industry Development Report by iiMedia Research defines an 18.5% market penetration rate as “regular consumers who drink coffee at least once a week,” representing about 262 million people, mostly office workers aged 25–40 in first- and second-tier cities. However, if the standard is strictly defined as “never having tried any form of coffee, including instant or ready-to-drink,” and combined with the sub-10% penetration in lower-tier markets, the number of people who have never consumed coffee exceeds 1.2 billion.

Data discrepancies make the picture even more interesting. The 2025 TikTok e-commerce report citing “1 billion people have never drunk coffee” actually excludes beverages containing coffee ingredients. That report counts only pure coffee drinks (freshly brewed, instant, or capsule). Including drinks like “coffee milk tea” or energy drinks with coffee extract would reduce the number of non-drinkers to 830 million. Supplementary data from the China Food Industry Association reinforces this point: in 2025, the ready-to-drink coffee market is projected to reach 68 billion yuan, accounting for 22% of the total coffee market. Yet 63% of these consumers admit they “drink occasionally and can’t tell the difference between a latte and an Americano,” showing that even broad coffee consumption doesn’t equal stable recognition. These differences in statistical criteria highlight how the very definition of “never having had coffee” reflects the market’s complexity.

Regional disparities make this complexity tangible. In first- and second-tier cities, coffee has long surpassed its role as a simple pick-me-up and become a lifestyle symbol. By 2025, Shanghai has 3.8 cafés per 10,000 people, with an average annual consumption of nearly 80 cups per person. Many white-collar workers’ breakfast routines include “an Americano and a whole-grain sandwich,” and local café owners can remember regular customers’ preferences—“Ms. Zhang’s iced latte with less sugar, Mr. Li’s Americano double shot.” In Guangzhou’s Tianhe CBD, lines of laptop-toting office workers form in front of automated coffee machines during rush hour, with a single machine serving over 200 cups per day.

New first-tier cities show slightly lower numbers but rapid growth. In 2025, Chengdu has over 8,000 cafés, a 45% increase from 2023. Hybrid “coffee + tea house” locations have become trendy check-in spots, where young people can order a dirty coffee or a traditional gaiwan tea.

In third-tier and lower-tier cities, especially rural areas, coffee’s “presence” drops sharply. In a commercial street of a county in Ganzhou, Jiangxi, Luckin is the only chain café. Its “9.9 yuan per cup” strategy attracts students and returning youth, but five kilometers away in townships, instant coffee on supermarket shelves gathers a thin layer of dust. Sales staff admit: “We sell fewer than ten boxes a month; most are bought by migrant workers for their kids to try.” Euromonitor’s sampling survey in rural Yunnan, Guizhou, and Henan is even more striking: the average coffee penetration rate is just 3.8%, with only 3.2% of residents aged 18–60 having tried coffee, and 87% of them “occasionally during work outside the county,” while self-initiated local consumption is below 1%. This “urban-rural gap” forms the core of the 1 billion non-drinking population.

Faced with this untapped “blue ocean,” the coffee industry has already begun a “downward penetration” strategy, tailoring brand and product strategies to meet lower-tier market needs.

In 2025, Luckin upgraded its “county store expansion plan,” aiming to open 1,500 new county stores. They feature low-cost combos like “9.9 yuan Americano + 12.9 yuan latte” and student discount cards—20% off with a student ID—and “Monday Coffee Day” promotions for county teachers, buy one get one free. Kudi adopts a flexible “store-in-store” model, partnering with county supermarkets and gas stations to reduce rent, selling freshly brewed coffee for 8–15 yuan and offering breakfast sets like “coffee + bread” suited to township consumers. Instant coffee brands are also adjusting: Sumidagawa’s “small pack instant” is compact and portable, with labels suggesting pairing with brown sugar or milk to suit rural taste preferences. Nestlé partners with Pinduoduo to launch “Coffee Supporting Farmers” gift boxes, processing Yunnan coffee beans into instant coffee and offering wholesale at 9.9 yuan for 20 sticks, selling over 2 million units in the first half of 2025. E-commerce platforms bridge the gap: TikTok livestreams featuring “county coffee specials” show hosts brewing coffee live with practical tips like “add a spoon of honey to reduce bitterness” or “use less espresso after 4 PM,” often generating sales over 5 million yuan per session. Pinduoduo’s “Agricultural Cloud Group Buy” lets rural consumers buy instant coffee at 3.5 yuan per stick, with first-half 2025 rural sales growing 120% year-over-year.

However, penetrating lower-tier markets is not smooth. Price sensitivity, cultural awareness, and distribution barriers remain three major hurdles. Rural consumers’ psychological price point is 15–25 yuan, while mainstream freshly brewed coffee costs 20–30 yuan. Even with discounts, some township consumers feel “it’s cheaper to buy three teas for the price of one coffee.” Surveys in a Guizhou county show 65% believe coffee is “not worth it.” Cultural barriers are harder to overcome: rural tea-drinking habits are deeply ingrained. In a Henan village survey, 72% of older adults said, “Coffee is a young person’s foreign toy; we’re not used to it,” and 38% worry “coffee hurts the stomach or affects sleep.” Even younger people often see coffee as “social currency”—“I’ll buy it when hanging out with friends, but I still brew tea at home.” Distribution challenges are also significant: rural deliveries often take 3–5 days, fresh milk and syrups required for brewed coffee are hard to preserve, and township convenience stores have limited refrigerated space, leaving ready-to-drink coffee in corners with less than 20% exposure compared to first-tier cities. In some remote areas, instant coffee is only available online, with logistics costs accounting for 15% of the price.

In fact, the “1 billion people who have never had coffee” figure reflects more than just consumption data—it’s a snapshot of social stratification and lifestyle differences in China.

From an income perspective, in 2024, per capita disposable income in first-tier cities is around 78,000 yuan, while rural residents average 24,000 yuan. A 20-yuan freshly brewed coffee equals a third of a rural resident’s daily living expenses but only 1/20 for a first-tier city dweller. Daily pace also matters: urban commuters spend over 1.5 hours traveling and face high work pressure, driving strong demand for coffee’s “energizing function.” Rural areas are slower-paced, favoring “slow tea drinking” for relaxation, with tea’s “health attributes” appealing to older adults. Exposure to culture differs as well: urban residents encounter coffee through travel, media, and cross-border interactions, whereas rural residents’ exposure is mostly local, leaving coffee’s “strangeness” intact. These differences aren’t “better or worse,” but reflect market diversity—coffee and tea are different lifestyle choices, not a comparison of “advanced vs. backward.”

Subtle changes are now emerging, possibly key to breaking these barriers. In a county milk tea shop in Ganzhou, Jiangxi, “coffee milk green tea” became a summer hit, combining local green tea with coffee and lowering sweetness to suit local tastes, selling over 2,000 cups per month. In a Guizhou township convenience store, ready-to-drink coffee shelves moved from corners to near the cashier, increasing stock visibility from 15% in 2024 to 28% in 2025, and “5-yuan Americano” became accepted by students. In rural e-commerce livestreams, hosts teach viewers how to “pair coffee with corn porridge” or “make coffee-flavored steamed buns,” integrating coffee into local food scenes, significantly boosting acceptance.

Generational shifts are also notable: Euromonitor’s 2025 survey shows 35% of 18–25-year-olds in county markets have tried coffee, compared with only 5% of those over 45, and 21% say they are “willing to try once a week.” As these young consumers become the main market force, coffee’s “downward penetration” may accelerate.

Perhaps one day, Lao Wang at the Yichang market will confidently ask customers, “Iced Americano or hot latte, with milk?” Or elderly rural residents in Yunnan will try “coffee-flavored Pu’er tea.” Only then can we truly say: coffee in China is no longer “exclusive to city dwellers” but a part of diverse daily life. Until then, the 1 billion non-drinkers represent the “hidden half of the iceberg,” the most promising growth space in China’s consumer market—it’s not just a coffee industry opportunity, but a vivid reflection of urban-rural integration and cultural diversity in China.