Luckin Coffee has signed a Memorandum of Understanding (MOU) with the Brazilian Trade and Investment Promotion Agency (ApexBrasil) to purchase 120,000 tonnes of coffee, worth US$500 million, from Brazil over the next two years.
“We believe that with the deepening of China-Brazil coffee trade co-operation, Luckin will bring more high quality Brazilian coffee beans to China, meeting consumers’ demand for premium coffee and driving the quality upgrade and mature development of China’s coffee industry,” says Luckin Coffee CEO Guo Jin.
The deal is indicative of China’s rapidly growing branded coffee shop market, which overtook the United States (US) by outlets in 2023, and now exceeds 50,000 stores.
Brazil, the world’s largest producer of coffee, has seen its exports to China rise significantly over the past 18 months.
According to the Council of Coffee Exporters of Brazil (Cecafé), in 2023 China jumped from being the 20th largest buyer of Brazilian coffee worldwide to the sixth largest buyer, tripling its purchases from the previous year.
“In 2022, China imported US$80 million worth of Brazilian coffee, a figure that increased to US$280 million in 2023,” says ApexBrasil President Jorge Viana.
“With this new contract, we expect an even greater increase in coffee consumption in China, which currently stands at 15 cups per inhabitant per year. But it can reach 200 cups, like in other Asian countries.”
Luckin Coffee is China’s largest coffee chain, with 18,558 locations, many of which are delivery and pick-up only locations.
To sustain its rapid outlet growth, the business began operations at a new 570,000 square foot roasting facility in Suzhou City, Jiangsu, in April 2024.
According to Luckin Coffee, this is the largest coffee roasting plant in China, with an annual roasting capacity of 30,000 tons. The value-focused company also operates a factory in Pingnan, Fujian, which can produce 15,000 tons of roasted coffee per year.
