By Jon Emont | Photograph by Gilles Sabrie for WSJ

A decade ago, Beijing filmmaker Guligo Jia drank Starbucks mochas to power through her workday.

Today she downs Americanos doused in pineapple juice and lattes blended with French butter.

Jia got swept up in China's coffee wars.

"My friend said it's fine, so I took a shot," the 36-year-old said of her first pineapple Americano. "It tastes kind of juicy."

A nation of tea drinkers has caught the coffee bug, thrusting coffee shops into a cutthroat competition for new customers that goes way beyond slashing prices. They are also dreaming up increasingly bizarre new brews, including lattes flavored with roasted duck, grapes or butter.

Luckin, the market leader, opened 6,000 new stores last year -- roughly one every 90 minutes -- and introduced 119 new products, including the apple fizzy americano (made with 1.4 apples per drink) and the Little Butter Latte, which in some versions is made with a luxe New Zealand butter.

The insanity is widely traced back to the fall of 2022. That's when former Luckin executives -- who left the company amid an accounting scandal -- launched what has become one of the company's chief competitors, Cotti.

It began with a race to the bottom on prices. The two companies countered each other with deals that dropped the cost of a coffee to 9.9 yuan, or $1.40 -- roughly a third of a Starbucks latte -- in what became known as the "9.9 yuan price war."

Other fast-growing new entrants, like Lucky Cup, are pushing equally cheap offerings.

Cotti has taken the fight to the flavor front, too, going all in on fruit like mangos, persimmons and bayberries, which it sources from around China. Last year it introduced a new line of purple slushy-like drinks that blend grapes and coffee.

This is all relatively normal in China. Its hypercompetitive consumer market is known to breed peculiar innovation, as companies try anything and everything to stand out. Automakers, for instance, sell electric vehicles with built-in refrigerators and in-car karaoke systems.

But the competition for coffee supremacy is on another level, leading to experimentation that tests even the most adventurous consumers' taste buds.

Beijing resident Dong Han, 38, often heads out to his neighborhood cafes in search of new flavors. He tried Luckin's Green Grape latte but the combo didn't take. The Americano drenched in orange juice also was weird at first, but it clicked on his second try.

"It has the refreshing taste of orange and the rich aroma of coffee," Dong said.

He's since moved on to Luckin's Jasmine Latte, a combination of coffee and jasmine tea that Dong said makes the overall experience more enjoyable.

Ren Fang, a coffee drinker in Beijing, said she appreciates local brands' inventiveness. "I just go with whatever looks good and pick their signature drink," she said. On this day that meant a "Pistachio Dirty" from Metal Hands, a boutique cafe.

Starbucks, which helped spread coffee culture after opening its first mainland Chinese cafe in 1999, is trying not to get left behind. In 2023, it built the China Coffee Innovation Park near Shanghai, in part to develop new products tailored to the Chinese market. Innovations soon sprang forth.

During Lunar New Year last year, the company introduced a salty and sweet pork-flavored latte -- one of 78 new beverages Starbucks unleashed in China in over the last financial year. Though the pork latte wasn't trotted out again this year, other new flavors have made a big splash. There's the Snow Frappuccino line, which offers "layers of flavor and textures reminiscent of an ice cream," as well as the Matcha Jelly Mountain Tea Latte, which has herb-infused milk, coffee and "visually engaging elements such as blue sky foam and green glass jelly."

One casualty of the coffee wars has been people's waistlines.

When Luckin expanded into Singapore in 2023, local laws requiring it to disclose the amount of sugar in each cup stirred a frenzy back in China. Influencers poured sugar packets into spoons to show how much was in popular drinks like the orange Americano, which received a "C" -- Singapore's second lowest possible health rating.

Some devotees are now cutting back -- or trying. Fu Yan, a 45-year-old Beijinger, mostly orders lattes with less sugar, and only occasionally drinks one of her favorites, Luckin's Coconut Latte.

"The coconut milk really softens the bitterness of the pure coffee," Fu said, wistfully.

Ed Sander, a China-focused technology analyst who frequently travels to China from his base in the Netherlands, said on X last year that he was going "cold turkey from the Mascarpone Cheese Latte I've been having daily when I'm in China."

One year later, he is still mourning. "It had like the slightly salty, but cheesy kind of flavor to it, on paper it tasted quite awful," said Sander. "But it tasted amazing."

Meanwhile the innovation train keeps chugging.

Felipe Cabrera, a coffee consultant from Colombia, helps Chinese cafes invent signature beverages . Among his latest efforts is a coffee combined with salted preserved plum, a popular Chinese snack.

To develop it he mixed the salted plums into a sauce, and added in soda water and ice, before pouring an espresso over the top. "We tried it with the coffee and were like 'No, it tastes horrible,'" Cabrera said.

He kept at the idea, trying a sauce of sweet, preserved plums instead of the salty ones. It was much better -- especially when paired with a high acidic coffee blend.

He thinks it could be a hit.

"So many things we do here in China would be heresy to people back in Colombia," Cabrera said.

--Grace Zhu contributed to this article.

Write to Jon Emont at jonathan.emont@wsj.com

(END) Dow Jones Newswires

April 13, 2025 23:00 ET (03:00 GMT)

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