Luckin Coffee Secures $500M Coffee Supply Deal in Brazil

Chinese coffee chain Luckin Coffee has entered a memorandum of understanding (MoU) with the Brazilian Trade and Investment Promotion Agency (ApexBrasil), proposing to purchase 120,000t of Brazilian coffee up to 2026 in a $500m transaction. Brazil, a leading global coffee producer, has seen its exports to China surge since the start of 2023, in tandem with the expansion of China’s branded coffee shop market. 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 within one year, according to the Council of Coffee Exporters of Brazil.

Luckin Coffee has inaugurated a new roasting facility in Suzhou City, Jiangsu, 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. CEO Guo Jin believes 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 stated that China imported $80m worth of Brazilian coffee in 2022, which increased to $280m in 2023. With this new contract, Luckin Coffee expects an even greater increase in coffee consumption in China, which currently stands at 15 cups per inhabitant per year.

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