China Food

“Expansion anxiety” of coffee brands


“  
How
terminal chain brand drives the improvement of industrial chain efficiency is the value of expansion.
 ”

Wen: Bu Yao, Xing Xing   

Source: bright company (ID: foodily)

 
Seesaw, located on the first floor of Huaihai 755, has been replaced by manner coffee. After taking this position, Han Yulong, founder of manner’s “low-key”, specially sent a circle of friends to celebrate.
Getting a good position in the offline business district has always been one of the core competencies of catering brands.
 
In Shanghai, the competition of coffee brands is becoming more and more fierce. In the store of Hengli international building where manner is located, white-collar workers with cups always come to “fight” for a cup of coffee in the morning and noon. On the other hand, the wechat group of this store is happy to talk to users from morning to night, and the group Friends “twist their eggs” on “dog head” flowers and peripheral products Never forgetting, never forgetting @ the store manager came out for business. Every morning, the clerk of manner kept on sharing the main products promoted today and encouraged everyone to punch in.
 
A year ago, there was only one Ruixing coffee on the first floor of the building. Now, including manner, three coffee shops (Ruixing, Starbucks and manner) have opened in different locations on the first floor, as well as a convenience store selling freshly ground coffee.
 
Another dimension of competition is the speed of expansion.
 
On September 24, yum China (yumc. US) fully announced the expansion plan of Italian coffee brand Lavazza in China. According to the latest arrangement, it will increase from the current 22 to 1000 in five years. As of August 31 this year, Lavazza coffee shops have about 22 stores in Shanghai, Hangzhou, Beijing and Guangzhou.
 
In addition to the horizontal expansion of online and offline, the “vertical” expansion of online and offline also constitutes a new trend.
 
On September 16, 2021, saturnbird opened its first offline concept store on Anfu Road, Shanghai. The store is located between brandy Melville, a women’s clothing brand, and the second-hand recycling bookstore “catch more fish”. From the perspective of traffic, it can be described as a “golden position” Previously, Shicui coffee, which also started online, also opened offline stores. Yutianchuan coffee, yongpu and other brands have also said that they will open offline stores in the future.
 
Behind the fierce competition of coffee brands is the continuous investment of capital.
 
On June 16 this year, manner completed a new round of financing and became the investor of this round of financing. This is the fourth financing completed in six months after meituan Longzhu capital investment in May; on July 21, seesaw, a boutique coffee brand, announced the completion of a + round of financing of more than 100 million yuan, and the new tea brand hi tea took a stake as a strategic investor; on July 23, m stand, a cutting-edge coffee chain brand, officially opened its doors It announced the completion of round B financing with a financing amount of more than 500 million yuan, and the estimated post investment valuation is about 4 billion yuan; on August 26, 2021, nowwa Nova coffee completed round a + financing, led by Jinshajiang venture capital, followed by Shengjing Jiacheng and Baicheng venture capital.
 
“People, goods and markets” are indispensable for any brand, and in the past year, the coffee brand has the deepest feeling about it.
 
According to Deloitte’s data, in terms of chain rate, the current chain rate of Chinese Cafe market is low, and chain brands account for only 13% of the number of all cafes. Especially in the third tier and below cities, independent cafes account for as much as 97%, mostly old-fashioned coffee themed simple meal restaurants similar to island coffee and cross-strait coffee but without brands, and boutique cafes account for less than 1%.
 
In this context, the expansion of chain coffee brands is actually an overall test of the industrial chain – including upper baristas, good shops, roasters, high-quality coffee bean traders, and even upstream coffee bean growers.
 
But the question is, when only the downstream brands get the “blessing” of a large amount of capital to improve efficiency and accelerate expansion, can other stakeholders keep up with the huge demand changes at the brand end? From a larger perspective, is the large-scale investment in the trial production of coffee to improve the overall efficiency of the industrial chain or just let the brand “collect wool”?

Robber: can’t the barista keep up with the speed of opening a shop?
Before the establishment of Bolan coffee college in Beijing in 2006, Qi Ming, the founder, was a teacher of Beijing Foreign Studies University. He said that in the years when he was a teacher, he was catching up with an important process in the history of Chinese coffee consumption.
 
Looking back on the birth of Bolan, Qi Ming said that it was generally divided into two stages. In the early stage, its main business was the establishment and operation of cafes and stores, which was mainly divided into several lines – combined with university campuses, office buildings and golf clubs.
 
However, after the 2008 Beijing Olympic Games, the financial crisis broke out, which was even more difficult for platinum LAN, whose stores were all independent cafes and had no supply chain integration. In a year, only one-third of cafes were profitable, and the remaining two-thirds either lost money or just broke even. Therefore, at that time node, Qiming began to consider how to maintain the coffee business.
 
Around 2010, at some coffee forums in China, they found that coffee peers in Hong Kong and Taiwan mentioned a concept – boutique coffee. After visiting North America, he decided to transform from zero to explore and make boutique coffee. At the same time, Bolan also made a business transformation from coffee shops to today’s form, that is, coffee education and training.
 
Qi Ming said that the most serious problem in the coffee industry at this stage is the “shortage of people”.
 
“Anyone who knows something about the coffee market,” Qi Ming said, “knows that if the industry wants to rank negative keywords, the first one is lack of people.”
 
He said that the most frequently asked question about the brand is to ask platinum LAN to help recruit people, but it is not easy in practice.
 
First of all, it depends on whether the needs of recruiters and job seekers match, involving a series of issues such as salary, working time, location and so on; Secondly, Qi Ming mentioned that platinum LAN seems to have a training volume of four or five thousand people every year, but more than half of them are interested lovers, and only half of them are full-time baristas.
 
After all kinds of subtraction, it is not so easy to match the needs of the employer.
 
When it comes to which coffee brands seek help from platinum LAN, Qi Ming said that almost all have asked them.
 
The application of baristas is slightly different from other industries. According to “bright company”, practitioners in the coffee industry have their own circles. Many wechat groups in the same city are open to employers and employees, and peers will introduce each other; Secondly, there are some special recruitment procedures, such as coffee recruitment and little coffee man.
 
At the same time, according to an industry source, cafes usually recruit people for a long time. Baristas who want to apply can go directly to the store for an interview.
 
According to the coffee recruitment information, baristas are usually divided into qualified and apprentices. In Shanghai, the average monthly salary of baristas is 6k-8k, and a little higher can reach 10K (M stand, manner and other brands); However, the salary of apprentices is low, usually 4k-6k.
 
Previously, “bright company” learned that Bolan coffee college is training baristas at sober hi to facilitate the high-quality coffee in fengnei, and they can work in an average of 6-7 days.
 
“To what extent can the technology be achieved in such a short time?” “bright company” asked Qi Ming.
 
He said that the 6-7-day zero starting point training is through the coff course of platinum LAN, including theory, practice and appreciation, covering all aspects of high-quality coffee. After basically finishing school, the students’ knowledge and skills can cope with the induction work in any coffee shop. The only problem is proficiency, because manual brewing, milk drawing and sensory training depend on proficiency.
 
In the past, baristas were basically occupied by men, but with the development of fine coffee, the proportion of female baristas is increasing significantly. In particular, in independent cafes, the proportion of female baristas has increased from very little in the past to about 30%.

Grab a spot: not only create revenue, but also establish a brand
 
On September 15, the offline store of three and a half tons of high-quality instant coffee on Anfu road in Shanghai opened, which attracted close attention from the industry. The founder of a coffee brand on Anfu road told “bright company”. Several new chain coffee brands that had obtained financing had inquired about the shops on Anfu Road, but Anfu road was “completely saturated”.
 
Three and a half ton “force flight concept store” trial operation after work (source: bright company)
 
Even the beauty collection store “Huamei harmay” will open its own cafe in Huamei’s new store after purchasing mariomba coffee on Anfu road.
 
Before opening, the price plate of the coffee shop on the first floor of the new store on Huamei Anfu Road (source: bright company)
 
Around the point, all emerging brands are trying to find a place in Shanghai that is more suitable for their own style and close to young people. This is the same for manner who emphasizes efficiency and M stand who emphasizes space and brand tonality.
 
The “bright company” searches for coffee in the High German map. It takes the “Xintiandi” as the center. The 3 kilometers search brand cafes show that there are 36 Manner, 10 M Stand, 11 Seesaw, 9 Tim Hortons, and 131 Starbucks. As a dominant Starbucks, there are more than 100 stores three kilometers away.
 
This also confirms that there is still a lot of space for new brands to replace Starbucks.
 
At present, in the view of industry investors, the first tier cities are keen to grab points, but there may be many fewer players in the second and third tier cities. If brands are now in the stage of grabbing points, it has reflected that the market is actually a stock competition.
 
Another key to grabbing points is how and where new brands grab them.
 
According to the report of Jiuqian consulting, the location of the gate store of the new coffee brand seesaw mainly considers independent communities and creative parks, and the location of the mini store mainly considers the vicinity of the office building and the transportation hub.
 
The area of the gate store is 100 + square meters, and the area of the mini store is less than 60 square meters. There are many mini stores in the business district. Because the business district is mostly a mobile customer group, the number of seesaw gate stores is less than 10 on the whole.
 
At present, there are two types of stores of another new brand m stand. One is an image store and flagship store with an area of about 100 square meters. It is mainly located in the commercial shopping center, which is partial to the experiential consumption scene. It has a stronger “online Red” attribute and is convenient for users to “punch in”; The other is a boutique of less than 50 square meters, which is mainly located near the office building to provide coffee consumption, takeout and takeout services for the surrounding office workers.
 
Since 2021, m stand has opened more than 10 stores every month. The store coverage has also expanded from Shanghai to Hangzhou, Ningbo, Shenzhen, Guangzhou and other places. The scene has also expanded from business district and office area to business, leisure, community, transportation hub and other scenes.
  
Most of manner’s stores cover an area of 10-20 square meters, mainly in office buildings and some in business districts. Manner, the main office building, has been more aggressive recently. In the same location logic, manner also tried to expand light food. Recently, manner also opened the first light food restaurant “manner cafe” in Shanghai global financial center, with most meals at about 35 yuan.
 
How to select the location of coffee brands is worth referring to as the layout of Starbucks, an old coffee brand, in China.
 
According to the report provided by Jiuqian consulting, Starbucks currently has about 5000 stores across the country, of which 90% are ordinary stores, 10% are reserve stores and 2% are “coffee express” stores.
 
The whole Starbucks store type mainly includes commercial stores, office stores, residential stores and other stores. After Starbucks has opened more than 30 stores in a city, it will set up two reserve stores. This is considering that when Starbucks has a certain scale in the city, if there are no reserve stores, Consumers are prone to fatigue.
 
It is understood that Starbucks’ store opening strategy in the future is to vigorously develop reserve stores and coffee shutter stores in the first and second tier cities. The proportion of ordinary stores in the first and second tier cities will decline, but ordinary stores will be vigorously developed in the third and fourth tier cities in the future.
The three types of Starbucks stores are distributed differently in various cities. From the first tier cities to the third tier cities, the proportion of commercial stores in the business center is increasing, from 30% to 70%; In contrast, office stores and residential stores are gradually decreasing.
 
 
From the first tier cities to the third tier cities, Starbucks accounts for an increased proportion of stores in the commercial center. It is obvious that in the second and third tier cities, Starbucks has a higher density in the commercial center, but accounts for a small proportion in office buildings and street shops. The commercial center is a crowded place in these cities. Starbucks has many stores in the commercial center. On the one hand, the commercial center can form a strong brand potential, on the other hand, The scene function of Starbucks in the business center is more obvious in the second and third tier cities.
 
In the second and third tier cities, new coffee brands need to enter more places than Starbucks. In the first tier cities, m stand may compete with manner or seesaw, but in the second tier cities, it may compete with Costa and Pacific Coffee.
 

More stores, faster speed
 
Another dilemma of expansion is how to balance the potential energy of quantity and brand.
 
Five years before its establishment, seesaw only opened seven stores. As of July this year, seesaw operated 33 boutique coffee stores across the country. According to the previous report, Sally, seesaw’s founder, said that it is expected to open about 100 stores by the end of this year.
 
 
M stand will also continue to expand in the second half of the year. This year, the first stores and national brand flagship stores in new cities such as Beijing, Suzhou, Nanjing, Wuhan and Chengdu will open soon, and the number of stores may exceed 100 within the year.
 
In November 2019, manner had 48 stores nationwide, including 42 in Shanghai and 2 in Beijing; According to the data of narrow door restaurant, manner has 197 stores nationwide, 165 in Shanghai, 12 in Guangdong and 9 in Beijing.
 
Relatively speaking, seesaw’s store opening speed is slow, because the design, scene layout and style of each seesaw store are different, and its site selection and urban research take a long time.
 
After getting financing one after another, the primary goal of the new coffee brand is to expand stores, and it will also face how to balance the “quality” and “quantity” of opening stores. In this regard, Starbucks has also encountered challenges in.
 
According to the report of Jiuqian consulting, the single store sales in the Chinese market decreased from 550000 yuan to 400000 yuan from 2010 to 2017, reaching the lowest level in 2017. The main reasons for the decline of single store sales are as follows: first, the expansion speed is much faster than the increase of consumption habits, and the increase of turnover is achieved through the increase of scale rather than the increase of single store turnover; Second, in 2010, Starbucks customers were positioned as “petty bourgeoisie” and other high-end consumption formats. Later, the concept was weakened due to the increase in the number of stores; Third, before 2018, Starbucks had franchisees in the Chinese market, and franchisees mainly considered profits rather than brand marketing.
 
In 2017, Starbucks took back the operation right in East China with us $1.7 billion and began to build high-end businesses such as baking factories and selection stores. At the same time, it emphasized service, weakened the turnover in the performance evaluation of stores, and increased the assessment proportion of QSC (quality, service and cleanliness).
 
Starbucks requires store sales to reach 400000 yuan before considering opening a new store. Generally, after opening a new store, the sales of the old store will drop to 300000 yuan. The larger the market scale is, the worse the sales decline of the same store will be.
 
In terms of coffee consumption, the cultivation of consumption habits takes time and requires a growth rate of 3% – 5% of new stores every year. Starbucks’ store opening plan is that if the turnover increases slowly at the rate of 3-5%, it will not open new stores temporarily, because such growth is only caused by the cultivation of consumption habits; If the growth rate reaches 10%, the increase is due to the increase of passenger flow.
 
After the adjustment of store opening plan, the whole Starbucks is healthier in store expansion and revenue. In 2018, the turnover of a single standard store in the Chinese market was 420000 yuan, 430000 yuan in 2019 and 450000 yuan in 2020. After that, it will increase at a rate of 3% – 5% every year. In 2010, Starbucks had 1500 stores in China, now 5000; Selection stores accounted for 3% in 2017 and 10% in 2020.
 
The expansion of Starbucks has diluted the brand potential energy, which is also one of the lessons of Starbucks’s crazy store opening in the past. After Starbucks opened its first store in Japan in 1995, its brand potential has been very strong. However, from 2003 to 2005, its performance fell for three years. After that, Starbucks reversed its adjustment. Starbucks also suffered the loss of crazy expansion in Japan.
 
For new brands, it is still far away that brand potential energy will be diluted with expansion. An investor told bright company that the brand potential may be diluted with the increase of stores, but it is not considered from the perspective of investment cycle.
 
New brands are also trying to improve their potential energy, which is not only a blessing to the current brand, but also a multi curve layout for the future. M stand also plans to build m stand trend integrated flagship stores in three core cities of Shanghai, Beijing and Shenzhen in 2021, including coffee, restaurant, bar and fashion brand clothing retail space, create a clock in landmark space for urban young people, and load a variety of business formats into the integrated flagship store, which may also be a way for M stand to enhance its brand potential.
 
 

Single store model and chain expansion
 
Whether it is Starbucks or a new coffee brand, to be bigger, it must be chain, and to chain, it must first make a single store model. From the chain point of view, the expansion of new brands is nothing more than the continuous replication of single store models in various places.
 
So what are the elements that determine the single store model? According to the report provided by Deloitte, at present, the coffee market mainly includes fast coffee and slow coffee. The “fast coffee” scene does not need space and atmosphere provided by coffee stores. It is a small store with an area of 5-10 ㎡. It is located in places with high traffic but relatively cheap rent, such as the exit of subway station or around popular business circles. The “slow coffee” scene needs to provide consumers with a better sense of space and atmosphere, so a larger area and hardcover repair are needed to create a third space.
 
The cost model of fast coffee is: the cost of coffee / beverage is 27% – 28%, the rent of water and electricity is 10% – 12%, the salary of clerks is 7% – 8%, other expenses are 4% – 5%, and the EBITDA (profit before tax, interest, depreciation and amortization) is 47% – 52%. The investment for a single store is about 150000 yuan, including 75000 yuan for equipment, 50000 yuan for decoration, 20000 yuan for rent during decoration and 5000 yuan for other expenses.
 
The cost model of slow coffee is: the cost of coffee / beverage is 27% – 28%, the rent of water and electricity is 16% – 18%, the salary of clerks is 12% – 13%, other expenses are 3% – 4%, and the EBITDA is 37% – 42%. The investment of a single store is about 1 million yuan, including equipment cost of 300000-35000 yuan, decoration cost of 60000-65000 yuan, rent of 80000-80000 yuan during the decoration period and other expenses of 5000 yuan.
 
Starbucks’ data may be more intuitive.
 
According to a report of Jiuqian consulting, in 2013, the raw material cost of Starbucks stores accounted for 30%, the rent cost accounted for 12% – 13%, the rent was 60000 yuan (including rent, property management and utilities), the labor cost accounted for 15%, which was 70000-80000 yuan, and each store had 15 employees; In 2021, the cost of raw materials is stable at 26%, the rent cost accounts for 15% – 16%, the labor cost accounts for 20%, and the number of employees in a single store is 10.
 
As for the store type, the labor cost of “coffee express” stores is 200000 yuan per year, accounting for 20%. The number of employees is 7-8, and the rent cost is 15%. The smaller the area, the higher the unit price; The revenue of reserve stores is 500000-510000 yuan, the labor cost is 19%, and the rent cost is 13-14%. The average turnover of Starbucks stores was 420000 yuan in 2018 and 430000 yuan in 2019. The return time of Starbucks stores is 3 years.
 
The radiation radius of Starbucks single store is 500m, that of developed business district is 200m, and that of backward business district is 1000m. Interestingly, due to the high customer unit price in traditional stores, Starbucks consumers are willing to pay for the third space, but for the “coffee express” business, the average order volume decreases due to the high customer unit price of takeout.
 
For the new coffee brand, it is also very important to expand the profit space of a single store, including member operation and multi-product and multi-channel expansion.
 
Similarly, according to the data from Jiuqian consulting, seesaw has 500000 members, the re purchase rate of members is 30% – 40%, the sales growth of stores in 2020 is 30%, coffee products account for 50% – 60%, meals and tea drinks account for 40% – 50%, seesaw’s online order proportion is 15% in 2019, and its omni-channel online order target is 30% this year.
 
 

Digitization: expanding super accelerator
 
From single store model to chain format, another decisive factor is digital logic.
 
An investor who has long paid attention to the coffee track told bright company that coffee products can be made by “faith”, but to be an independent chain, it must be digital operation. The so-called digital operation refers to the standardization of all modes and the design of user growth system logic in the system.
 
“Ruixing could not have opened more than 5000 stores in two years without digital support,” said the investor.
 
It should be noted that, according to Jiuqian Zhongtai data, as of the second quarter of this year, among the domestic offline coffee chain brands, Ruixing coffee and Starbucks still had the most stores, with 344 and 161 new stores respectively. Novartis coffee ranked third, with 120 stores.
 
 
In fact, in terms of digital expansion, Nova coffee has adopted a lighter approach in the store opening mode – looking for stock coffee shops, leisure catering, and hosting the coffee operation of stores through asset light transformation. This is a new mode between self-operation and franchise: the owner only needs to bear the rent, but nowwa is responsible for the supply chain, product system and store operation Responsibility.
 
 
Coffee products are highly standardized. When Novartis coffee cooperates with stores, it only needs to replace the door and some equipment, and the cost of turnover is only a few thousand yuan. Thanks to this asset light model, Nova coffee has operated more than 400 stores in first and second tier cities such as Shanghai, Hangzhou, Nanjing and Suzhou. According to the information provided by the team, in 2020, Nova coffee has become meituan review Ka chain and Ali local life Ka chain (top 3 stores in the whole network), with a monthly revenue of millions, of which online takeout channels account for 75%. This also explains why Nova can open a shop quickly in a short time.
 
Talking about the digitization of Ruixing coffee, Tao Chengrui, founder of Ruibo data, a catering digital service company, gave an example to “bright company”: Ruixing first advertised in the elevator in each city in the early stage, and then distributed free coupons for users to receive coupons. As long as you scan the code, Ruixing can know which building in the city scans the code the most, and the coupon represents its target customer group. Ruixing can open a shop in this place if the building downloads the most coupons.
 
“Ruixing itself is a digital company. Before it opened its store, a 300 person team was working on the whole digital infrastructure, such as Ruixing app and applet, which were all completed before it opened.” Tao Chengrui said.
 
Ruixing’s digital system was first displayed in the opening of stores, and now it is reflected in its overall operation efficiency. Therefore, a store may only need 1 / 4 of Starbucks’ sales volume to survive, because it has low cost and high operation efficiency. On the whole, Ruixing uses digital capabilities to solve the problems of store opening efficiency and operation efficiency.
 
According to the audited 2019 annual financial report reissued by Ruixing coffee on June 30 this year, at the store level, the total number of stores as of 2017, 2018 and 2019 were 9, 2073 and 4507 respectively, which shows the speed of opening stores in the early stage.
 
Some people in the industry also believe that, to some extent, Ruixing model is essentially a variant of the Internet model. The Internet model is characterized by free products to users, flow realization and online products, and the marginal cost decreases under the scale effect.
 
Ruixing has made some upgrades in the Internet model, and its users and products are highly online in the provision process. The Internet is a traditional flow realization. Ruixing is upgraded to product realization. It is based on the way provided by Internet products to reduce the marginal cost, achieve the high cost performance of products, and reduce the threshold of drainage and retention. The Internet scale effect is reflected in the diminishing marginal cost of products, and the biggest embodiment of chain brands is the marginal decline of customer acquisition and retention costs under the brand effect.
 
Ruixing combines these two models. It can realize the double marginal decline of customer acquisition and retention costs and product costs under the scale effect, and complete the marginal decline of product costs through the creation of new products and explosive products, so as to achieve profitability and improve the online operation efficiency.
 
In addition, Ruixing’s important point is that it cuts off the third space consumption concept of the coffee brand. Its cognitive education to users is that Ruixing only provides coffee products, which simplifies the dimension of product provision. The store only needs two waiters, which also reduces the requirements for people. Ruixing offline store is equivalent to a performance monomer and is a service contact for users, but it is not a service carrier.
 
Ruixing’s offline service and scenario requirements are removed. Ruixing’s users are still online. It can refine the operation of users through the Internet and realize the user’s life cycle. Ruixing’s flow comes from online and its product process is simple. It breaks the ceiling of traditional catering in terms of flow and turnover rate.
 
From the perspective of development process, Ruixing needs to go through multiple stages to achieve this model. From 2018 to 2019, Ruixing needs to build brand drainage. In the past year, Ruixing has been expanding stores and becoming product disk users. Based on this model, it is more likely to expand stores and enlarge the advantages of this model in the future.
 
If the operation is not standardized well, it is difficult to achieve the chain in a strict sense. Using the Internet model to digitize the chain stores is the most important inspiration that Ruixing brought to the coffee market in the past. The traffic is Ruixing’s gimmick, and what really supports Ruixing’s crazy expansion is the marginal decline of products and brands brought by this whole set of digitization, Ruixing can use the lightest and fastest mode to copy and chain.
 
Manner expanded rapidly in the past because it tried to solve the problems of front-end standardization. During the epidemic in 2020, manner launched a single line applet and gradually established its own private domain.
 
A small episode is that a “fleece” user wanted to quit the wechat group of Hengli international building after receiving manner’s free coffee for three days. He was invited to the group again by the group owner that afternoon. For the new coffee brand, an insignificant user may be the key point of the decisive battle.
 
Why is capital still optimistic about coffee?
 
From the secondary market, coffee is a category that can be understood by international investors. Coffee business is very common all over the world. Coffee brand investors are very international. In terms of exit threshold, m stand brand potential coffee is very easy for investors to understand.
 
Most investors in the primary market believe that coffee is a very safe category – its safety margin comes from the understanding of the global market, its growth is deterministic (the increase of chain rate), and the overall cup volume of domestic coffee shops is too low (about 10 cups per capita per year), “there is still room to increase to 10 times”.
 
From the perspective of industry, terminals and brands are the main recipients of value in the whole coffee value chain.
 
Brazil and Vietnam are two major coffee producing areas in the world. The combined output of the two countries accounts for 50% of the world. The coffee beans in the upstream are highly standardized agricultural products, and the price of a kilogram of coffee beans is less than 20 yuan. In the middle reaches of baking and grinding, the added value will become 100 yuan / kg, an increase of 5 times.
 
From the terminal calculation, a cup of 25 yuan coffee contains about 15g coffee beans, which is converted to kg, which is about 1600 yuan – 1700 yuan / kg. From agricultural products to the final end, the added value of coffee has increased by about 80 times. High terminal added value is an important feature of the coffee industry. Another feature is that coffee is addictive, and addictive is the guarantee of repurchase.
 
This also explains why only brands attract capital “into the market” on a large scale. Similar to some new consumer brands, brand terminals play a “role in improving the efficiency of the industrial chain”, thus creating greater value.
 
At the market level, according to the calculation of investor Huang Hai in the program about coffee in the podcast “crazy investment circle”, the scale of China’s coffee market is about 70-80 billion yuan. In 2021, the scale of Starbucks is 20-25 billion, accounting for about 30% of the Chinese market, and there are more than 5000 stores in China.
 
From Starbucks’ business in China, coffee is also an absolutely good business. According to the above report of Jiuqian consulting, the average daily customer order volume of Starbucks stores in China market is 300, and the customer unit price is 50 yuan, while the average daily customer order volume of Starbucks stores in the U.S. market is 800, and the customer unit price is 7-8 dollars; From 2010 to 2012, the sales volume of a single store in the Chinese market was 550000 yuan. At present, the sales volume of a single store in the Chinese market is 450000 yuan.
 
At the same time, the climbing period of new stores of new brands has also been shortened. In the past few months of this year, the store scale of M stand has increased several times at the rate of more than 10 stores in a single month. M stand said that the opening of new stores has no climbing period, and even continues to break the sales record. It is one of the few local chain coffee brands in the Chinese market that can achieve no climbing period for new stores and new cities.
 
As of September 26 this year, the market value of Starbucks (SBUX. US) was US $134.547 billion, and the market value of LK. OTC powder single market was US $4.419 billion. According to the investment community, manner coffee is valued at US $2.8 billion, and M stand estimates that the post investment valuation is about RMB 4 billion; On June 24, the boutique coffee brand has completed a new round of financing of hundreds of millions of yuan for three and a half meals. According to latepost, the post investment valuation is 4.5 billion yuan.
 
reference material:  
1. Interview and on-site investigation of “bright company” with founders, investors and practitioners of the coffee industry;
2. Jiuqian consulting related reports and Jiuqian Zhongtai;
3 how Internet people re understand the new brand of ruixinghe coffee | brighttalk 12
4 Deloitte’s 2021 white paper on China’s freshly ground coffee industry
5 crazy circle “coffee war 2021”
Reprint authorization and media business cooperation: Amy (wechat: 13701559246);
Join the community: Cherry (micro signal: 15240428449).

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