Once fully operational, the $21.2m site will have an annual roasting capacity of 55,000 tons and serve as a key hub for the coffee chain’s Brazilian coffee imports
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Senior officials from Luckin Coffee and the Brazilian Embassy at the ground-breaking ceremony | Photo credit: Luckin Coffee
Chinese coffee giant Luckin Coffee has broken ground on a new RMB 3bn ($21.2m) roastery and supply chain hub in the eastern port city of Qingdao.
When fully operational, the Innovation and Production Center facility will have an annual roasting capacity of 55,000 tons and feature full-process automation from green bean processing and roasting to packaging and warehousing logistics.
The hub will bring Luckin Coffee’s total annual roasting capacity to 130 tons and work in tandem with the coffee chain’s existing roasting facilities in Jiangsu and Fujian, which supply its 20,000 stores.
“The new Innovation and Production Center is a vital step in Luckin’s ongoing efforts to strengthen and enhance the high-quality supply chain, boosting efficiency and strengthening our world-class coffee brand,” said Jinyi Guo, Chairman and CEO, Luckin Coffee.
In a press release, Luckin Coffee said operating in Qingdao will offer it ‘unique geographical advantages’ – particularly in relation to sourcing coffee from Brazil.
In June 2024, Luckin Coffee signed a Memorandum of Understanding (MoU) with the Brazilian Trade and Investment Promotion Agency (ApexBrasil) to purchase 120,000 tons of coffee from the South American country over the next two years – a deal worth approximately $500m.
Chinese purchases of Brazilian coffee more than tripled in 2023 to $280m, according to the Council of Coffee Exporters of Brazil (Cecafé). Imports have continued to soar this year amid rapidly rising coffee consumption in the East Asian nation, increasing 40% year-on-year over the first seven months of 2024.
To mark 50 years of diplomatic relations between China and Brazil, Luckin Coffee has also launched the Luckin Coffee Brazil Coffee Culture Festival – an event to ‘foster an exchange of culture and coffee’ between the two countries.
The initiative will include a Brazilian Coffee Museum at the Innovation and Production Center, the opening of a Luckin Coffee Brazilian Coffee Culture themed store in Beijing and coffee tasting events to showcase the best of Brazilian coffee. Luckin Coffee also has a longer-term plan to open an office and support centre in Brazil to support its coffee sourcing programme.
“As a leader in China’s coffee market, Luckin Coffee has become a key link in China-Brazil coffee trade and is fostering deeper collaboration between the two countries’ coffee industries. We look forward to the successful launch of the Luckin Coffee Brazil Coffee Culture Festival, which promises to be a new platform for showcasing Brazilian coffee culture and products, while strengthening collaboration between the coffee industries of China and Brazil,” said H.E. Marcos Galvão, Brazilian Ambassador to China.
Galvão and Guo both attended the opening of the festival and the groundbreaking ceremony alongside Adriano Giacomet, Head of Trade Promotion and Investment Section from the Brazilian Embassy, and Hui Li, Chairman and CEO of Chinese private equity firm Centurium Capital – Luckin Coffee’s largest investor.