Chinese coffee chain Luckin Coffee has entered a memorandum of understanding (MoU) with the Brazilian Trade and Investment Promotion Agency (ApexBrasil).
The MoU outlines Luckin Coffee's proposal to purchase 120,000t of Brazilian coffee up to 2026 in a transaction valued at $500m, World Coffee Portal has reported.
Brazil, a leading coffee producer globally, has witnessed its exports to China surge since the start of 2023.
The increase is in tandem with the expansion of China's branded coffee shop market, which has surpassed the US in the number of outlets and now has more than 50,000 stores.
The Chinese market's appetite for Brazilian coffee has seen a significant uptick, with purchases more than tripling in 2023 to $280m.
This growth has catapulted China from 20th to sixth place as a buyer of Brazilian coffee worldwide inside one year, according to the Council of Coffee Exporters of Brazil.
To support its rapid growth and the recent deal, Luckin Coffee has inaugurated a new roasting facility in Suzhou City, Jiangsu, China.
Spanning 570,000ft², the plant is the largest coffee roasting facility in China, with an annual capacity of 30,000t.
The chain also operates a factory in Pingnan, Fujian, with a production capability of 15,000t of roasted coffee annually.
Luckin Coffee CEO Guo Jin was quoted by World Coffee Portal: “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.”
President of ApexBrasil Jorge Viana was quoted: “In 2022, China imported $80m worth of Brazilian coffee, a figure that increased to $280m in 2023.
“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.”
In early 2024 Luckin Coffee enhanced its brand visibility by partnering with the Australian Open tennis tournament as its Official Coffee Partner in China and Southeast Asia.
