China Food

Can blueglass, valued at more than 600 million, become Naixue in the yogurt industry?

“  
open 100 stores first.
 ”

Text: Haiyu, Sanshui   

Source: future brand daily (ID: onebillionbrands)

 
The future brand learned that the offline yogurt store brand blueglass is in the process of round B financing, with a valuation of more than US $100 million.
 
Blueglass was formerly known as “auturaga Qinghai Tibet yogurt” founded in Beijing in 2012. Six years later, auturaga “upgraded” to blueglass and began to expand. Blueglass currently has 33 stores, including 13 new stores in 2020. The stores are mainly located in high-end office buildings or shopping malls in Beijing and Shanghai.
 
At present, “one sour cow”, which is mainly distributed in the second and third tier cities, is the only well-known brand of yogurt shop. The “one sour cow” is similar to the “little bit” of milk tea shop. The customer unit price is about 12 yuan, the product quality is average, and the shop form is a small shop “bought and taken away”. The “one sour cow” was paid 60% equity by new hope dairy for 231 million in 2020.
 
Different from “a sour cow”, a cup of yogurt in blueglass costs about 40 yuan. Except for a few stores, it provides a sense of design in the dining room.
 
In addition to “one sour milk cow”, yogurt stores are still mostly self-employed, which is far less concerned by capital than the new tea company. Blueglass and a sour milk cow were born in the same period as Xicha and Naixue, but they have not made outstanding achievements like the latter two. The financing of blueglass may mean that the offline beverage industry will attract a new hot category.
 
In this article, we will try to explore the following issues:
1. Why is blueglass so expensive?
2. Can blueglass be the first in the offline yogurt Market?
3. What challenges will blueglass face to become the “Naixue tea” in the yogurt industry?
 
Why is blueglass so expensive?
Like most yogurt products, blueglass takes health as the starting point. However, it has also made some product innovations, such as using deep-sea phycocyanin, snow swallow and tremella, which are beauty related ingredients.
 
In addition, blueglass has also “created” the category of cold extract yogurt. The reason why it will be created in quotation marks is that the so-called “cold extract yogurt” is actually a more well-known Greek yogurt. Different from ordinary yogurt, the whey protein of Greek yogurt will be filtered out at low temperature to obtain a more mellow taste.
  “Cold extract” yogurt is very thick. You can “pour the cup without sprinkling”
Yogurt based products have the scalability similar to new tea products. Like tea, yogurt can be matched with a variety of accessories: fruit, chocolate, coffee, phycocyanin, snow swallow and other “health” ingredients. This scalability makes it possible for products to constantly push through the old and bring forth the new.
 
However, unlike the new tea, yogurt has a stronger health attribute thanks to years of education of old brands. For example, moslian of Guangming dairy owes the secret of moslian’s people’s longevity to drinking yogurt. Blueglass naturally continues to use, and even goes further, to expand the beauty, health preservation and meal replacement attributes of yogurt through accessories.
The price of a cup of blueglass yogurt is very high, about 40 yuan, and the most expensive single product of Xi tea is only about 30 yuan. Compared with “a sour cow” of 12 yuan, it makes people feel unable to climb up.
 
The reason why blueglass is so expensive is not entirely determined by its cost.
 
We went to blueglass’s Beijing Financial Street store for a day and estimated its revenue. The store is about 250 square meters and can sell about 500 drinks a day. According to the estimation of 40 yuan per cup, the daily revenue is 20000 yuan and the monthly revenue is 600000 yuan.
 
  • Material cost: an FA who has contacted blueglass told us that the material cost of blueglass accounts for about 25% of the total turnover.
  • Rent cost: as far as we know, in Financial Street, the monthly rent of 250ping store is about 100000, accounting for about 17% of the current turnover of blueglass Financial Street store.
  • Labor cost: there are about 10 employees in the Financial Street store. According to the monthly salary of 7000, the labor cost is about 70000 yuan, accounting for 11% of the turnover.
  • Water and electricity cost: we take the average level of beverage stores in the same area below the line as 10000 / month, accounting for 1.6% of the turnover.
In this way, ignoring depreciation, blueglass’s gross profit margin is about 45.4%. We have made similar cost estimates for the other four stores, and the gross profit margin is also in the range of 40% – 45%.
If we compare blueglass with Naixue, we will find that blueglass’s cost structure and gross profit margin are better. According to Naixue’s prospectus, Naixue’s material cost accounts for 38.4% of total sales, 12.1% of rent, 28.6% of labor, and 3.1% of “other rent and related expenses” including hydropower. The gross profit margin is only 17.8%.
 
Therefore, compared with the high cost, the main reason why blueglass is so expensive is that consumers are willing to pay. Blueglass stores are mostly located in Beijing Financial Street Center, blue harbor high-end office buildings or medium and high-end shopping malls.
According to our observation, the main consumers of blueglass are high-income white-collar women, aged 28-40. In addition, consumers under the age of 25 will spend more time shopping for coupons to get lower prices when buying blueglass.
 
Some consumers will patronize blueglass at lunchtime and dinner time, which may mean that some consumers do eat blueglass as a substitute meal. 40 yuan for lunch / dinner is still highly acceptable to white-collar workers.
 
Blueglass is a business that someone pays for, but what capital needs more is a big business.
Dilemma of high-end yogurt
Is the offline yogurt store another consumption upgrade of the yogurt industry? We think the answer is No.
 
The capital story of “from 1.0 traditional yogurt to 2.0 pre packaged yogurt to 3.0 high-quality ready-made yogurt” may be better: blueglass can take the 190 billion yogurt Market as its potential market.
 
However, the probability of packaged yogurt sold in supermarkets is not a competitive product of blueglass. The prices of the two are not comparable, and the coincidence of consumption scenarios is also very low.
 
This exciting story has also been told by the new tea company. Their potential market size was 442 billion tea market. When Xi tea and Naixue tea came out, people began to realize that these offline new tea drinks and traditional tea drinks are not a market at all. They are large-scale, but they are definitely not 442 billion.
 
The real competitive products of blueglass are actually offline beverage brands such as Xi tea and Naixue. Although the new tea market has exceeded 100 billion at present, compared with consumption upgrading, the competition in the extremely winding offline beverage track is not so sexy.
 
The dilemma faced by the offline beverage store of 40 yuan a cup is obvious: the customer base is likely to be limited to high-income women in the financial street. Capital is concerned about whether blueglass can scale up and open 500 or even 10000 stores.
 
Offline stores, including new tea, can be roughly divided into flow business and rent business.
 
The characteristics of traffic business are: highly dependent on point traffic and focusing on the “vertical” of floor effect.
 
Milk tea brand “a little bit” is a traffic business: its location is usually in places with large traffic of college students and office people; No or very little passenger space is provided to improve the floor efficiency (turnover / m2). Whether a “little bit” store can make money highly depends on the traffic of the location itself, because “little bit” itself has no ability to attract traffic.
 
In the flow business, pay attention to entering the large flow pool as much as possible, and make the floor effect to the extreme.
 
Rent business is characterized by low dependence on point traffic and emphasis on scalability.
 
The reason why we can achieve low dependence on traffic is different. It may be that the brand strength or product strength is strong, and the aroma of wine is not afraid of deep alleys. It may also be that the store itself provides additional value outside the regular business, so that customers are willing to go specially. Man coffee is a typical example.
 
Like the predecessor Starbucks, man coffee also emphasizes space experience. When it comes to man coffee, the first impression of urban white-collar workers is the open, quiet indoor environment with different themes. Although the per capita consumption is up to 50 yuan, man coffee does not need to limit itself to the points with large traffic of target customers like “a little bit”. In the first, second and third tier cities, you can see mancoffee in middle and low-end shopping malls, residential buildings, universities, airports and even railway stations.
At the same time, in the second and third tier cities and non central areas, man coffee can easily get low rent shops and even get rent relief. Therefore, it can accept lower floor efficiency and use low rent to make up for profits.
Maan Coffee
 
Man coffee, like other rental businesses, although it sacrifices the floor efficiency, it is easier to scale and can also enjoy the benefits of scale effect.
 
Although not a necessary condition, brand power is crucial to the profitability of the rental business. On the one hand, it means that the brand can have a higher premium, even if there is less traffic, it can also have higher turnover and profits. On the other hand, brand power means stronger rent negotiation ability and rent cost lower than the market price.
 
Blueglass’s dilemma is that it doesn’t have enough brand power. It’s more like a traffic business, but the high-end price limits its future traffic scale.
 
Blueglass relies on the high-end crowd flow of high-end office buildings and shopping malls to obtain good revenue.
 
But the question is, how many high-end office buildings and shopping malls in China can let blueglass settle in? Can blueglass sink into the new first, second and third tier cities?
 
Can blueglass become Naixue’s milk?
 
In the process of investigating many blueglass stores, we found that there is not much turnover gap between blueglass’s large space stores that focus on experience and small space stores that do not focus on experience. For example, Huamao 1 store with an area of about 40 square meters also sells about 420 cups of yogurt a day, which is not far from the Financial Street store with a daily sales of 500 cups. See the following table for other stores:
As mentioned earlier, blueglass currently prefers a traffic business, and most of its stores are located near the workplaces of high-income female white-collar workers. For this part of the core customer group, the space experience is not the first, because they often leave after buying. Therefore, blueglass’s small stores can achieve such high floor efficiency.
 
But why does blueglass still insist on opening large stores to put pressure on its overall floor effect? In 2021, blueglass will open four new stores with an area of more than 100 square meters.
 
One possible reason is that blueglass wants to transform from traffic business to rent business. Only in this way can blueglass expand horizontally and tell a story that capital likes to hear.
 
As we can see from Naixue’s tea and man coffee, one of the magic weapons for making rental business is to provide “space value”. First, space services can help blueglass broaden its customer base. If the space provided by blueglass is comfortable enough, it is not difficult to imagine that customers will go to, work or party specially. In this way, the radiation radius of blueglass will no longer be limited to female white-collar workers working nearby.
  Blueglass Financial Street store is the No. 1 beverage store in Xicheng District
Then, if the products and services provided by blueglass are high enough, it can plant brand awareness in the hearts of customers who are still non core customers. Blueglass is more likely to “bring its own traffic” and make a rental business.
 
Not to mention, in this era of “eyeball economy”, enough brilliant design elements can often attract punch in and social media communication.
 
Blueglass has indeed spent a lot of time in space design, and its style is changeable. For example, blue glass’s Han nationality Plaza store focuses on Moroccan Style; A 99 year old olive tree is planted in the blue harbor store. Customers can sit around the tree and drink yogurt comfortably. Even in stores without theme, blueglass’s design is concise and comfortable, no worse than Starbucks.
Blueglass blue harbor store and Han nationality Plaza store
It is assumed that blueglass can establish brand awareness and make rental business in first tier cities by virtue of space experience, but to truly realize large-scale, blueglass must rush out of the first tier.
 
Naixue, which started in Shenzhen, mainly focused on first tier cities during its initial expansion, but after 2019, its focus has shifted to a more sinking market.
 
From 2019 to 2020, Naixue will add 17 stores in first tier cities, but 78 stores in non first tier cities, including 49 stores in second and third tier cities, which is enough to see Naixue’s determination to sink.
 
At present, blueglass only stores in two non first tier cities: one is a self-service store located in Hangzhou lakeside Yintai in77, and the other is a 50 Ping small store located in Hebei Anaya resort.
 
If blueglass is determined to sink, “space value” is even more important.
 
A chain cafe owner who has worked in a third tier city for 20 years told us his summary over the years, “third tier brothers want to be able to sit and play.”
 
Naixue’s tea is well aware of this truth and insists on controlling the space at 180-350 square meters from the beginning to strengthen the social attribute of “gathering”. If you go to the second or third tier cities, in addition to dating couples, you can also see college students playing board games or King glory in a circle in the store.
 
But even if we can create a comfortable and unique social space, can consumer groups outside the Fifth Ring Road accept the unit price of 40 yuan? Why don’t they choose Naixue, Xi tea or other unknown brands with lower unit price as the king’s glory war room?
 
To sink, in addition to providing “space value”, blueglass also needs to consider a comprehensive price reduction.
 
According to our previous calculation, at present, blueglass’s gross profit margin is about 28% ahead of Naixue, and there is enough space to comprehensively reduce the price by 20%, that is, the average single product price of 40 yuan will be reduced to 32 yuan. It is precisely because the single product price of 30 yuan is equivalent to that of Xi tea and Naixue, which will not affect its high-end positioning.
 
Blueglass should also realize that the current pricing is too high, and launched the membership system of “85% off for 98 yuan / quarter” and “75% off for 200 yuan / year”. On the one hand, membership system increases user stickiness, on the other hand, it also reduces pricing in disguised form. According to our observation, more than half of the current consumers are members.
 
As mentioned above, blueglass’s competitive product is not prepackaged yogurt, but other offline beverage stores. For consumers looking for afternoon tea or snacks, or looking for a place to sit, there is little difference between yogurt and tea shops. Moreover, nothing can stop Naixue and Xi tea from launching 30 yuan / cup of yogurt.
 
Therefore, in addition to the gross profit, with the sinking and expansion of blueglass, it must invest a lot of money in marketing to establish a brand position similar to Naixue and Xi tea.
 
No matter whether the small and beautiful blueglass is making a profit or not, if it gives up 20% of its gross profit and large marketing expenses in the future, it will have a high probability of losing money. But it doesn’t matter. As long as the growth data is good enough, subsequent financing will not be a problem.
 
He’ll open 100 stores first.
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