In early September, the joint coffee "Soy Sauce Latte" launched by Luckin Coffee and Guizhou Maotai hit the market, creating a buzz on Chinese social media platforms. This resulted in a single-day sales achievement exceeding RMB 100 million for Luckin Coffee.

For Chinese consumers, coffee is no longer an unfamiliar commodity but has become an everyday necessity. China's coffee market is in a rapid growth phase. According to Statista, by 2023, the coffee market (excluding Ready-to-Drink coffee beverages) will reach a total revenue of USD 1.7 billion. Between 2023 and 2028, China's coffee market is projected to grow at a compound annual growth rate (CAGR) of 7.58%, exceeding the global average of 4.61%. Instant coffee dominates the market, accounting for about 72% market share, with a market size close to USD 10 billion, as pointed out in a report by Zhongyan Pu Hua Research Institute.

With the rising coffee affection among Chinese consumers, several local coffee brands have emerged. These brands, appearing predominantly in first and second-tier cities, not only share the market with established international brands like Nestlé and Starbucks but also bring diverse products and marketing strategies. However, China still lacks globally recognized coffee brands. The number of Chinese coffee companies listed is much fewer than in countries like the USA, Germany and Italy. This discrepancy can be attributed to factors such as consumer habits, market foundation, brand building, and capital investment.

EqualOcean notes a growing global trend: consumers are increasingly concerned about corporate sustainability and social responsibility. They expect not just a tasty coffee but one that represents respect and responsibility towards the environment and society. This article will discuss the potential secondary business value for coffee brands from a circular economy perspective.

The Circular Economy in the Coffee Industry

In mature coffee markets, sustainable development offers businesses new avenues for value growth. The concept of a circular economy is intrinsically tied to sustainability and is a vital component of corporate ESG (Environmental, Social, and Governance).

The circular economy aims to eliminate waste from the outset and avoid overuse of resources. This economic model contrasts with the traditional "extract, manufacture, consume, dispose" linear approach. The primary goal is to ensure resources remain within the economic system for as long as possible.

Applications of the circular economy include waste minimization, designing products for longevity, recycling, the sharing economy, and biological and technical cycles. Every aspect of the coffee industry can apply these principles. Practices like reusing coffee grounds, sustainable packaging, reutilizing coffee pulp, and other waste, as well as ongoing agricultural practices, are already underway. Leading coffee businesses, such as Nestlé and Starbucks, have launched various sustainability initiatives globally, like using recyclable materials for coffee capsules and partnering with third-party organizations for coffee product waste recycling and reprocessing. These practices align with the circular economy and support the brands' business growth. 翻译成弘文