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CoffeeMarketinChina
February2012

ExecutiveSummary
CoffeeisoneofthefastestgrowingsegmentsofthebeveragesectorinChinaprojectedto growwithaCAGRofx%toytonsby20 fromztonsin20

Market

Lowcoffeeconsumptionatonly5cupspercapitaperyearprovidesrobustgrowth opportunityforcoffeeinChina

Drivers:
RisingPopulationandUrbanization

Challenges:
RisingLabourCosts HighTaxesandDuties HealthHazards

Drivers& Challenges

RisingDisposableIncome ChangingLifestyles YoungPopulationDriveCoffeeDemand LowPerCapitaConsumption

Trends

RetailChainExpansion RisingDemandofInstantCoffee InvestmentPlans


MajorPlayers

Competition

Company1

Company2

Company3

Company4

Company5

Company6

COFFEEMARKETINCHINA2012.PPT

MarketOverview
Global China

SupplyChain ExportsandImports Drivers&Challenges Trends Mergers&Acquisitions Competition KeyTakeaway


COFFEEMARKETINCHINA2012.PPT

Globalcoffeeproductionwithagreateremphasison Arabica varietyisexpectedtowitnessasteeprise


GlobalCoffeeMarket Overview
Globalcoffeeproductionisexpectedtoincreasetox mn(ykg)bagsby20 SouthAmericaaccountedforzmnbagsoftheglobal coffeeproductionin20 GlobalcoffeeproductionisdominatedbytheArabica varietyofcoffee
Arabicacoffeeaccountedforx%ofthecoffeeproduced in20

GrowthinCoffeeProduction
mnbags
150 100 50 0

X% x1 x2 x3 x4

20

20

20

20e

ProductionbyVariety
mnbags
100 80 60 40 20 0

RegionalProduction(20)
B x3 mnbags
60

A x2 y1 y2

z4 z2 z1 z3

x1

x4 y3 y4

40 20 0

20
Source:

20

20

20

COFFEEMARKETINCHINA2012.PPT

DespitearelativelylowshareofcoffeesalesChinesecoffee marketisexpectedtowitnessarobustgrowth
DomesticCoffeeMarket Overview
CoffeemarketinChinaisexpectedtogrowfromx thousandtonsin20 toythousandtonsby20
CoffeedemandinChinaisincreasingatarateofz%toy% peryearcomparedtoaaworldaverageofmerex%

CoffeeMarketGrowth Production
000tons
300 200 100 0

x2 Z%

XProvinceisthemajorcoffeegrowingregionin ChinaproducingonlyYvarietyofcoffee
Xaccountsfory%ofthecoffeebeanproductioninChina
_ ZProvinceisthemajorproducerofXcoffeewithanannual productionofytons

x1 20 20e

CoffeeProductionHubsinChina

HotDrinksMarketShare(20)
x1 A B C x2 X Z

x3

Source: COFFEEMARKETINCHINA2012.PPT

Chinesecoffeemarketaccountedforatradesurplusofover USDymnin20
CoffeeMarket ExportsunderHSCodes
USDmn
150

CountrywiseSegmentation Y% x4 Z% x4 x3 x8 x5 x6 x7 x4 x3 x2
Country1 Country2 Country3 Country4

Country1isthelargest importerofcoffee accountingforx%of Chinascoffeeexports

100 50 0

x1

x2

x1

Country5 Country6 Country7 Country8

20

20

20

20

20

CoffeeMarket ImportsunderHSCodes
USDmn Country1isthelargest exporterofcoffeeto Chinaaccountingforx% ofChinascoffee imports
80 60 40 20 0

Y% y3 y2 y4

CountrywiseSegmentation Z% y5 y8 y6 y5 y7 y1 y2
Country1 Country2 Country3 Country4 Country5 Country6 Country7 Country8

y1

y4

y3 20 20 20 20 20

Source: COFFEEMARKETINCHINA2012.PPT

Involumeterms,20 witnessedatradesurplusofmerex tonsinChinacoffeemarket


CoffeeMarket ExportsunderHSCodes
000tons Coffeeexportvolumes remainedalmoststagnant during20 20,however registeredagrowthofx% valuewise,indicatingprice increase
40 30 20 10 0

CountrywiseSegmentation Y% x2 x3 x4 x5 x4 x3 x2 x5 x1 x6
Country1 Country2 Country3 Country4 Country5 Country6

x1

2006

2007

2008

2009

2010

CoffeeMarket ImportsunderHSCodes
000tons
40

Y%

CountrywiseSegmentation Z% y5 y5 y6 y3 y4
Country1 Country2 Country3 Country4 Country5

Coffeeimportvolumes rosebyx%between20 and2010attributingtoa riseindemand

30 20 10 0

y1

y2

y3

y4

y2

y1 2006 2007 2008 2009 2010

Country6

Source: COFFEEMARKETINCHINA2012.PPT

Note:

Drivers&Challenges Summary

Drivers
RisingPopulationandUrbanization RisingDisposableIncome ChangingLifestyles YoungPopulationDriveCoffee Demand LowPerCapitaConsumption

Challenges
RisingLabourCosts TaxesandDuties HealthHazards

COFFEEMARKETINCHINA2012.PPT

Risingpopulationandrapidurbanizationtoactasthemajor growthdriverforthecoffeemarketinChina
RisingPopulationandUrbanization
Finding1 Finding2 Finding3 Finding4

Impact

RiseinPopulation
mn
1,500 1,000 500 0

Z% z1 x1 z2 x2 z3 x3 z4 x4

Increaseinurbanization leadstogrowthofthe coffeemarket

A y1 20 y2 20 y3 20e y4 20e

Source: COFFEEMARKETINCHINA2012.PPT

Risingdisposableincomeleadingtogreaterspending increasedemandfrombrandedretailoutlets
RiseinDisposableIncome
Finding1 Finding2 Finding3 Finding4

Impact

UrbanDisposableIncome
USDbn
20,000

UrbanConsumerSpending
USDbn y3 Z% y2 y1 20 20e 20e

x3 Z%

5,000 4,000 3,000 2,000

15,000

x2
10,000 5,000 0

x1

1,000 0

20
Source:

20e

20e

COFFEEMARKETINCHINA2012.PPT

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Rapidlychanginglifestyleisamajorcontributortothe growthofcoffeemarketinChina
ChangingLifestyles
Finding1 Finding2 Finding3 Finding4

Impact

ShareofSpending
% 100% 80% 60% 40% 20% 0%
Source:

x1

x2

y1

y2 20e
COFFEEMARKETINCHINA2012.PPT

20

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Lowlevelofpercapitaconsumptionprovidesahuge opportunityforgrowthtothecoffeemarketinChina
LowPerCapitaConsumption
Finding1 Finding2 Finding3

Impact

PerCapitaCoffeeConsumption
No.ofCups x1 1,500 x2
1,000 500 0

Chinaspercapitacoffee consumptionisthelowest offeringsubstantial opportunityforgrowth

x3

x4

x5

x6

x7

x8 x9 x10 x11 x12 China

Finland
Source:

Sweden Netherlands Norway

Denmark

Austria

France

Germany

USA

Japan

Korea

CoffeeConsumption=Percapitaperyear COFFEEMARKETINCHINA2012.PPT

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FavorabledemographicsinChinatoleadtothegrowthof thecoffeemarket
YoungPopulationDriveCoffeeDemand
Finding1 Finding2 Finding3

Impact

Demography AgeSplit(20)
A B C x1 Young populationis theprimary targetofthe coffeeretail outletsin China

MajorAttractionsofCoffeeOutlets

x3 x2

99%

MajorPurposesServed

X
Source:InternationalCoffeeOrganisation COFFEEMARKETINCHINA2012.PPT

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Highcostoflabourisoneofthemajorchallengesfacedby thecoffeemarketinChina
RisingLabourCosts
Finding1 Finding2 Finding3

Impact

LabourCosts EmergingAsia
0 500

Country1 Country2 Country3 Country4 Country5 Country6 Country7 Country8 Country9 Source: x9

1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 USD x1

x2 x3 x4 x5 x6 x7 x8

Xxx

Note::PercapitaAverageAnnualSalaryhasbeenconsidered COFFEEMARKETINCHINA2012.PPT

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Trends Summary

RetailChainExpansion

Key Trends
InvestmentPlans RisingDemandfor InstantCoffee

COFFEEMARKETINCHINA2012.PPT

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Highendretailchainexpansionhasemergedasamajor trendinthecoffeemarketinChina
RetailChainExpansion
Finding1 Finding2 Finding3 Finding4
MajorCoffee outletstoexpand theiroperationsin theChinamarket

StarbucksExpansionPlan
Outlets
1,500 1,000 500 0

GrowthofRetailSegments(20)
%
40 30

x2 Z%

x2 x1 x3 x4

Retailfoodsalesisoneof thehighestgrowing segment

x5 x6 x7

x1

20 10 0

20
Source:

20e

Total Jewelry Clothes Food Electronics BuildingFurniture Retail


Note: COFFEEMARKETINCHINA2012.PPT

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CoffeemarketinChinaiswitnessingarapidriseindemand forinstantcoffee
RisingDemandofInstantCoffee
Finding1 Finding2 Finding3 Finding4
RisingPopularityof InstantCoffee

ProductInnovation

InstantCoffeeMarket(20)

CompanyA

BrandX

x2

CompanyB

BrandY
x1

A B

Source: COFFEEMARKETINCHINA2012.PPT

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MajorPublicCompanies Summary
Net Profit
45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 5,000 10,000

SizeoftheBubblerepresentsMarket CapitalizationinUSDbn

x1

x2

Total Income
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000

Company1

Company2

Source: COFFEEMARKETINCHINA2012.PPT

Note:

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DomesticCompany Company 1
CompanyInformation
CorporateAddress TelNo. FaxNo. Website YearofIncorporation TickerSymbol StockExchange AddressLine

Locations China

19 Xxx Yyy

ProductsandServices
Category Beverages InstantNoodles Services Products/Services Product1,Product2,Product3 Product1,Product2,Product3 Service1,Service2,Service3 Headquarters

KeyPeople
Name Person1 Person2 Person3 Person4 Designation Designation1 Designation2 Designation3 Designation4

Source: COFFEEMARKETINCHINA2012.PPT

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DomesticCompany Company 1
FinancialSnapshot
TotalIncome USDmn
3,000 2,000 1,000 0

KeyRatios
A Y Profit USDmn
150
Particulars ProfitabilityRatios OperatingMargin NetMargin ProfitBeforeTaxMargin ReturnonEquity ReturnonCapitalEmployed ReturnonWorkingCapital ReturnonAssets ReturnonFixedAssets CostRatios Operatingcosts(%ofSales) Administrationcosts(%ofSales) Interestcosts(%ofSales) LiquidityRatios CurrentRatio CashRatio LeverageRatios DebttoEquityRatio DebttoCapitalRatio InterestCoverageRatio EfficiencyRatios FixedAssetTurnover AssetTurnover CurrentAssetTurnover WorkingCapitalTurnover CapitalEmployedTurnover Improved Decline yoy change (20 ) 20 20 20 20

x4 x1 x2 x3

100 50 0

20

20

20

20

FinancialSummary
ThecompanyincurredanetprofitofUSDxmninFY20,as comparedtonetprofitofUSDymninFY20 ThecompanyreportedtotalIncomeofUSDymninFY20, registeringanincreaseofx%percentoverFY20 ThecompanyearnedanoperatingmarginofypercentinFY20 a decreaseofxpercentagepointsoverFY20 ThecompanyreporteddebttoequityratioofxinFY20 an increaseofypercentoverFY20

FinancialSummary
Indicators
MarketCapitalization(USD) TotalEnterpriseValue(USD) EPS(USD) PERatio(Absolute) Source:

Value(dd/mm/yy)
x1 x2 x3 x4

COFFEEMARKETINCHINA2012.PPT

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DomesticCompany Company 1
KeyBusinessSegments
A
100% 80% 60% 40% 20% 0%

KeyGeographicSegments
C 100% 50% 0% 20 A X%

x1

y1

z1

n1

Thecompanysgeographic reportablesegmentisA

x2 x3 20

y3

y2

z3

z2

n2 n3 20

20

20

KeyRecentDevelopments
Description Overview News Companyisprimarilyamanufacturerofbeverageandinstantfood products.Itoperates inxprovincesofChinathroughdifferentchannelsofsalesanddistributionpoints. CompanyplanstoraiseitsdistributionchannelsinChinafromx1tox2 Newbusiness Duetoincreasedproductioncapacityanddistributionchannelscapitalspendingofthe companyisestimatedtobearoundUSDzmn Company1operatesasasubsidiaryoftheY

ShareHoldingpattern
Source:

COFFEEMARKETINCHINA2012.PPT

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Growingpopularityofinstantcoffeeandrapidexpansionof retailoutletswillleadtorobustgrowthofcoffeemarket
CoffeeproductionisexpectedtogrowwithaCAGRofZ%fromXtonsin20 toYtonsin20

Opportunitiesinthe Market
Risingpopulationand urbanizationcoupled withariseindisposable incomearemajorgrowth driversforthecoffee marketinChina Changinglifestyleand risingdemandamong youngpopulationare majorcontributorstothe growthofthecoffee marketinChina Lowpercapitacoffee consumptionprovidesa scopeforgrowththus actingasamajorgrowth driverforthecoffee marketinChina
000tons
300 200 100 0

MarketSize
x2 Z%

Competitive Landscape
Coffeemarketin Chinaisdominated byforeignretail coffeeplayers Withretailcoffee chainsgainingrapid popularity,retail playersdominatea greatershareofthe coffeemarketin China Playersare diversifyinginto instantcoffeewitha viewtocapture greatermarket share
22

x1 20 20e

Challenges RisingLabourCosts HighTaxes HealthHazards

COFFEEMARKETINCHINA2012.PPT

Thankyoufortheattention
TheCoffeeMarket ChinareportisapartofNetscribes FoodandBeverageIndustrySeries. Formoredetailedinformationorcustomizedresearchrequirementspleasecontact: JitendraPunjabi
Phone: EMail: +913340646215 jitendra.punjabi@netscribes.com

AboutNetscribes Netscribesisaknowledgeconsultingandsolutionsfirmwithclienteleacrosstheglobe.Thecompanysexpertisespansareasofinvestment& businessresearch,business&corporateintelligence,contentmanagementservices,andknowledgesoftwareservices.Atitscoreliesatrue valuepropositionthatdrawsuponavastknowledgebase.Netscribesisaonestopshopdesignedtofulfilclients profitabilityandgrowth objectives. Disclaimer:Thisreportispublishedforgeneralinformationonly.Althoughhighstandardshavebeenusedthepreparation,ResearchonIndia, Netscribes(India)Pvt.Ltd.orNetscribes isnotresponsibleforanylossordamagearisingfromuseofthisdocument.Thisdocumentisthe solepropertyofNetscribes(India)Pvt.Ltd.andpriorpermissionisrequiredforguidelinesonreproduction.
COFFEEMARKETINCHINA2012.PPT

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