“Sideline” is becoming popular, and coffee and tea shops are selling boxed meals

Photo source: Visual China

Blue Whale News, February 20 (Reporter Zhang Jinglun)In 2025, the tea and coffee track will open a new competition.

Naixue’s tea opens up a new battlefield for tea drinks + light food, opening a Green Light Drink and Light Food store;Tims Tianhao China further deepens its coffee + warm food strategy and announced the launch of the Light Body Bagger lunch box series; Kudi Coffee continues its cost-effective route, piloting sales of steamed buns, rice fast food and other categories in Beijing to stimulate diversified consumer demand.

As the tea and coffee track falls into homogeneous competition, from price, scale wars to table revolution, it reflects the collective anxiety of leading brands to find increments in the stock market.

From energy bowls to lunch boxes, is it an expansion of the scene or a lack of proper work?

Recently, Naixue’s Tea Green Light Drink Light Food store in the country has officially opened in Shenzhen, which was renovated and upgraded from the original tea drink store. Naixue’s official Mini programs show that in addition to selling brand regular tea, coffee and European bags, the store also launched a light food and light drink series represented by energy bowls. Among them, the transaction price of four energy bowl light food products is between 23.8 yuan and 28.8 yuan, and the price of light drink series products is 18-29 yuan.

Compared with other well-known light food brands, this price advantage is obvious. Take Wages as an example. The price of energy bowls ranges from 75 to 85 yuan, and the price of drinks ranges from 25 to 38 yuan. Gaga’s salad costs more than 50 yuan, and drinks range in price from 28 to 39 yuan.

Also focusing on light food, Tims Tianhao China coffee + warm food strategy is also further deepening. Recently, Tims Tianhao China announced the launch of a light bagel lunch box series, with bagel + salad + coffee as the core combination. Due to geographical limitations on the supply of some fresh ingredients, salads are temporarily only available in stores in seven cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Qingdao, Yangzhou and Hangzhou.

Cody continued his cost-effective route and broke into the fast food track. Previously, Cudi briefly served new hot bento and breakfast pasta in some stores in Beijing. There are 4 types of lunch boxes, including chicken leg rice, pork leg rice, lion’s head rice, and chicken leg rice double set meal. The price ranges from 13.9 to 20.9 yuan, while the breakfast series is priced from 2.2 to 4.5 yuan.

According to Cudi, the new convenience store type will not only be limited to coffee sales, but will also cover traditional convenience store products such as Chinese pasta and bento.

It can be seen that this round of product line expansion of the tea and coffee brand has once again shown a clear trend of scene extension. Whether it is Naixue’s light food, Tims’s good lunch box, or Kudi’s lunch box, they are all entering full-time catering. Scenes penetrate.

According to Yang Huaiyu, an analyst in the large consumer industry, a single beverage sales often have a lower unit price and a limited consumption frequency. By introducing meals, consumers can be attracted to enter the store for consumption during the meal period, thereby increasing the customer unit price and repurchase rate. In addition, traditional tea and coffee brands mainly rely on passenger flow during afternoon tea or leisure periods, while adding meals can cover three meal scenarios, making full use of store resources and improving floor efficiency.

Tea drinks and coffee are keen on product sideline. How is this business?

From an industry perspective, can tea and coffee brands ‘blueprint for expanding dinner scenarios to achieve performance growth really be realized?

In fact, looking at the entire industry, the exploration of the integration of coffee + meal formats has been taking place for many years. Tims Tianhao Coffee has become famous with its coffee + warm food specialty combination; chain coffee brands such as Starbucks and Piye Coffee continue to improve the third space experience through baking matrices. This complex business format is accelerating its penetration into the tea drinking track. Previously, many tea drinking brands such as Guming, Naixue, and Mixue Ice City have also targeted the breakfast market and launched an American/latte + baking product combination.

But at present, it can still be described as half seawater and half flame.

Different from Mixue Ice City and Guming’s cautious waters, Naixue seems to be planning to compete for the trillion-dollar cake of breakfast. Set meals will be launched during breakfast at the end of 2021, with a price of more than 16 yuan. By March 2022, its coffee + baked breakfast combination will be further discounted to 13 yuan, and then to the current breakfast of 9.9 yuan. The product line and pricing will change again and again, which can be seen in the cruelty and trend of competition.

But some brands have also achieved good results. According to Naixue, in the first half of 2023, the sales of Naixue breakfast packages increased by approximately 620%. But since then, Nai Xue has not disclosed the sales results of breakfast sets. Tims Tianhao China also stated when announcing its first-quarter 2024 financial report that the proportion of orders including food in this quarter increased to 52.7%, an increase of 8.5 percentage points from 44.2% in the same period in 2023.

Secondly, simple meals require a completely different supply chain system, which means that companies must have strong supply chain capabilities and supply capabilities for new categories, overcome the problem of lack of experience in new fields, and ensure that the quality and services of new products can reach consumers. Expectations to avoid diluting the brand image.

Yang Huaiyu told Blue Whale News that compared with professional catering companies, tea and coffee brands may have shortcomings in the operation and management of takeout and dine-in-room meals. At the same time, the production of meals requires more types of raw materials and more complex processing processes, which may make supply chain management more difficult. If the quality of the meal is poor or inconsistent with the brand image, it may damage the trust of the original consumers.

“‘Selling rice is indeed a business with huge potential, but not all brands can easily handle it. The key to success is to find an entry point that suits your brand tone and target market.& rdquo; Yang Huaiyu said.

Behind it is the brand’s growth anxiety

Of course, there are many cases where tea cafes expand their product sideline. In addition to selling rice, groceries are also a major trend.

Blue Whale News reporters observed that snack products can be found in online ordering Mini programs such as Tea Yanyue, Mixue Ice City, Aunt Shanghai, Naixue’s Tea, Xi Tea, and Tianlala.

It can be seen from the small snack products launched by each family that there is a high degree of category overlap. Among them, the low-priced tea drinks products such as Mixue Ice City and Tianla La, have lower prices for small snacks, and the taste of the products is more towards craving, refreshing spicy and salty snacks. Focusing on mid-to-high-end tea brands, snacks are more expensive per unit price, more focused on health, and more refined packaging.

In addition to offline stores, most new tea brands have also settled in multiple e-commerce platforms, and their sales are outstanding. Taking Tea Beauty as an example, there are currently 420,000 fans in Douyin’s official store, but the cumulative sales of the store have reached 4.759 million. Among them, 8 bags of crispy buns at 19.9 yuan have the highest sales volume, with 1.64 million pieces sold.

Tea and coffee brands have chosen to lay out product sideline businesses, which is behind the growth anxiety brought about by market changes.

In recent years, tea and coffee tracks have soared at an unimaginable speed, sinking, opening stores, cross-border, and price wars, which together constitute the keywords of the industry. However, the high growth trend will be pressed on the pause button in 2024.

On the one hand, same-store sales of major brands continue to decline.

Taking the coffee industry as an example, in fiscal year 2024, same-store sales in Starbucks in China fell by 8%, and same-store sales in Ruixing’s self-operated stores fell by 16.7% year-on-year. Looking at the tea and beverage industry, in the first three quarters of 2024, Guming’s national same-store GMV dropped by 0.7% year-on-year.

There is the impact of price wars behind it. Objectively, the 9.9 yuan promotion launched by Cudi Coffee has already put pressure on the industry. This effect includes both brands participating in price wars and the erosion of profits by low-priced products, and consumers switching to other companies.

Inversion prices have severely squeezed corporate profits. Take the first batch of Naixue tea in New Tea Drink as an example. In the first half of 2024, the loss exceeded 400 million yuan, and the total market value dropped from a peak of nearly 30 billion Hong Kong dollars to the current 2.37 billion Hong Kong dollars. Even coffee boss is struggling. In fiscal year 2024, Starbucks ‘revenue in China was US$2.958 billion, down 1.4% year-on-year.

On the other end, while each family continues to expand, the number of stores closed reaches a new high. According to narrow-door dining data, as of December 2024, 62430 new stores have been opened in the coffee industry in the past year, with a net increase of 16986, that is, 45444 coffee stores have disappeared. According to red meal big data, from November 2023 to November 2024, nearly 200,000 milk tea shops nationwide closed down. This also shows that the expansion period of the two golden tracks of tea and coffee has passed, and the competition is fierce in the era of hand-to-hand combat.

In addition, international coffee bean futures prices have been soaring recently and have gradually spread to consumer terminals, triggering a global chain of price increases. Throughout 2024, the cumulative increase in U.S. ICE coffee futures will be as high as about 70%. Affected by this, Japan’s Ajinomto AGF announced that a price increase of 172 products will be 15%-30% starting March. Brazilian coffee roasters such as JDE and PEETS and South Korea’s Starbucks raised prices earlier this year. What impressed the outside world most was that South Korea even launched bean-free coffee, replacing coffee beans with other raw materials such as barley and hibiscus.

In contrast, domestic coffee brands are more ambiguous and hesitant about price increases. On February 20, reporters visited chain brands such as Starbucks, Tims, Manner, and Cody and found that so far there has been no large-scale price increase.

Although large coffee chains generally have foresight about the industry and hoard goods in advance, prices will remain relatively stable. However, many industry insiders said that in the medium and long term, the continued rise in coffee bean prices will still bring cost pressure to large coffee companies. rdquo;

Against the background of the ongoing price war of 9.9 yuan, it is also the demand of tea and coffee brands to alleviate their profit anxiety under the pressure of competition from stock stocks in the industry. As for whether the drink + meal model can work and become a new profit growth curve, it is waiting to be tested by the market.