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on february 2, starbucks announced the report for the first fiscal quarter of 2022 as of january 2 (13 weeks of financial data, equivalent to the fourth quarter of 2021). same-store sales in the chinese market fell by 14%, mainly due to the average order price fell by 9%, and the transaction value fell by 6%. regarding the performance of the chinese market, starbucks ceo kevin johnson said, "we are fighting a protracted war." in addition to facing the uncertain epidemic situation, we must also face high-frequency consumption upgrades. after all, more and more people's imagination about coffee is no longer starbucks.
zhang yan, founder of one quarter coffee lab, once sighed in january: in the chinese market, there is no other category like coffee, and the speed of upgrading is so "crazy" that people in the industry can't keep up with the rhythm. originally, some special-tuned products were launched on a seasonal basis, but now they are thinking about new products every month.
data from iimedia research predicts that the market size of china's coffee industry will reach 1 trillion yuan in 2025. china's online coffee consumption has grown by nearly 60%, and coffee consumption has been upgraded in an all-round way, of which the number of coffee buyers has increased by about 50%. among them, hanging ear coffee will increase by more than 300% from 2021 compared with 2019. at the same time, the size of the coffee bean market has continued to expand, the unit price of customers has risen, and the repurchase rate has increased.
in 2021, the coffee industry will raise 20 financings, with a total amount exceeding 5 billion yuan. among them, manner raised three consecutive rounds of financing, and m stand and shicui raised two consecutive rounds of financing. the valuation of santon in june 2021 is 4.5 billion yuan, which is close to the market value of the boutique coffee brand blue bottle when it was acquired by nestle in 2017.
will online coffee "crazy" take root offline? from hanging ears to flavored coffee liquid to coffee beans, from black coffee to coffee tea, wine... where is the next trend in the coffee industry? where is the next bet in the "coffee bureau" of capital? topher reporters made twelve predictions for the coffee industry in 2022 through a series of interviews with many brand founders, online channel industry leaders, and supply chain ends in the coffee industry.
part 1 tmall will launch coffee beans
with the emergence of coffee product forms such as hanging ear coffee, freeze-dried instant coffee, coffee cold extract, and room temperature concentrate, currently, coffee beans account for 20%-30% of the overall size of tmall's coffee category. most of the brands, scales and users in the coffee bean market are relatively small. tu weicheng, the person in charge of tmall's coffee brewing category, said in an interview that this year, the tmall coffee category will focus on coffee beans.
in the past few years, the offline coffee market has been cultivating "first-coffee users", who are equivalent to the top of the funnel. coffee is addictive, and many users gradually upgrade to professional coffee users after drinking coffee for a long time.
as a transitional product between instant coffee and professional coffee, tmall mainly promotes ear-mounted coffee. hanging ear coffee is convenient and ground coffee, which has a certain sense of ritual.
in the past few years, the sales growth of tmall's ear-mounted coffee has grown rapidly, and it has also indirectly cultivated professional coffee enthusiasts. many ear-mounted coffee consumers have quickly upgraded to professional coffee consumption of capsule coffee and coffee beans. especially emerging coffee users, they not only need good coffee, but also a sense of ritual, and some users even directly buy professional coffee appliances as soon as they come up. therefore, "making a cup of coffee by yourself" will undoubtedly become the consumption scenario at the bottom of the funnel, and e-commerce platforms urgently need to make efforts to catch up and continue the upgrade of users' needs.
tu weicheng said that compared with other coffee categories, coffee beans and capsule coffee have the highest repurchase rate.
moreover, the price of coffee bean futures has soared to the highest point in nearly a decade, which also means that coffee prices will rise, and small coffee companies will bear the brunt of the impact. the market is paying more and more attention to specialty coffee in some small producing areas, and the competition for the upstream origin is becoming more and more fierce. tmall's promotion of professional coffee beans at this time can also enhance the platform's mentality.
part 2 coffee supply chain competition will go deep into the source
last year, in response to greater sales volume and technical iteration needs, many domestic leading coffee brands accelerated the construction of their own supply chains in daxing, and the scale and number continued to increase.
yongpu coffee will build a coffee liquid factory in 2022. the new factory will have a comprehensive production line integrating roasting, extraction and coffee liquid filling.
sumida chuan coffee, which has the vision to be the "ration coffee" of the chinese people, has been ranked first in the two categories of tmall's hanging ear coffee and coffee liquid for 6 years. "lock fresh coffee" category, reducing the residual oxygen content of coffee packaging to 0.8%. in 2022, sumida river plans to build the world's largest espresso coffee factory, with a production capacity of 1 billion coffee capsules per year, and test the production process of various degradable packaging materials.
since the beginning of the past two years, these large-scale coffee head brands manner, seasaw... have all gone deep into the source of the production area to dig the supply chain and control the quality and price fluctuations of the beans. ruixing also participated in the snatch of the oiran.
in the past, in the global coffee market, only large brands, such as starbucks and nestle, and green bean traders and roasters, such as cofco and louis dreyfus, would go directly to the front end of the supply chain to purchase directly.
in 2022, the amount of coffee beans in the sumida river will double to 15,000 tons. brands are even discussing adding futures trader positions within the company to reduce the cost of price fluctuations when buying large quantities.
the trend shows that in order to enhance the advantages of price and brand power and strive for more terminal premiums, the future supply chain of coffee beans must cooperate with more green bean traders, go to the source production area to control the quality, and connect with the manor and specialty coffee. the scramble for beans will also become more and more intense.
in the future, if you want to be big enough in the coffee category, you must check the quality of coffee beans from the source of the green beans to the roasting layer by layer, increase the trust and loyalty of users to the brand, and accumulate reputation in the industry.
part 3 the unit price is 3-5 yuan. mixed flavors are the starting point. the price of fine beans is controlled below 200g/100 yuan.
the price of a single cup of tmall's hanging ear coffee is divided into 2-3 yuan / 3-5 yuan / 5 yuan and above. at present, 60%-70% of the transactions are from less than 3 yuan, and more than 5 yuan of fine products of single origin. the overall volume of hanging ear coffee is relatively limited.
in the future, the price range of 3-5 yuan will have a relatively large opportunity, and mixed flavor packaging will be more popular.
the coffee below 3 yuan is mainly based on italian coffee, which is bitter and low in acidity, and can be drunk with milk, which is favored by most chinese coffee users. the craftsmanship of japanese hanging ear coffee is relatively mature, and the r&d and factory costs are even lower than domestic roasting prices. in the brand track below 3 yuan, it is difficult for domestic brands to have a competitive advantage.
in the future, coffee tastes will be more differentiated. in the price range of 3-5 yuan, it is an urgent opportunity for tastes other than italian.
in the future, there are also opportunities for hanging ears of 5 yuan and above. the hanging ears solve the "convenient consumption scenario". the real coffee enthusiasts prefer to buy coffee beans to make hand-brewed and espresso coffee, so only the brand is on the coffee beans. only professional enough, enthusiastic users will accept the "convenience" of coffee.
at the same time, the price of specialty coffee beans should not be too high, and it is difficult to increase the volume if the price of 200g is higher than 100 yuan. therefore, in terms of variety selection, it is necessary to have both awareness and large volume. it is necessary to go deep into the production area to do the supply chain. in the future, yunnan will have more opportunities and possibilities.
part 4 chinese users prefer "tea sense", italian and yirgacheffe are more popular
the reporter found that on tmall, users' taste preferences for ground coffee are two extremes.
one is the more mellow and deep-baked italian style, which has high taste acceptance and loyalty, and currently accounts for the largest proportion. the other is the ethiopian sun-dried yirgacheffe, which is full of floral and fruity aromas. it has a relatively complex flavor level and is a good entry point for hand-punching. because of the relatively high cost performance of these two kinds of beans, in the future, there is more room for their market share to rise.
chinese users are more receptive to coffee with a "tea sense" and "balance". "blue mountain flavor" coffee is more popular on tmall. in the future, tmall will also spend its energy to establish professionalism in benchmark categories such as geisha and blue mountains, and to discover genuine high-quality beans.
part 5 the niche production area needs to be deeply explored, and the cognitively strong categories such as geisha and blue mountain need to be deeply cultivated
the proportion of people who actually drink coffee beans is still relatively small, and there is no obvious segmentation on the internet. in addition to the traditional sun-dried taste of tropical fruits, some rare and niche production areas, especially geisha, which has its own consumption mind, if it can be deeply cultivated and gain a price advantage, there will be great opportunities.
part 6 women are still the main users of coffee
in china, coffee once represented a curious and trendy exotic culture, a pioneering attitude towards life, and women were more sensitive in capturing lifestyle expressions.
tie pi, the founder of yongpu coffee, said that the core users of yongpu are still in first- and second-tier cities. the core of emerging consumer markets is young women. in addition to using good products to influence repurchase, it is also necessary to learn to communicate with women, such as enabling the ip image "shi duanzheng", to know what they are thinking and like in more ways, and use actions to continuously convey the brand's culture and values.
nearly 70% of tmall users are from women. coffee has natural social attributes. female users have stronger social needs, and women consume a higher proportion of coffee. similar to outdoor brands, the influence building of coffee brands among women needs to highlight humanities and humanity. for example, sumida river "hides" the concept of humanistic care in the construction of factories in china. the factory window sills use low eaves and long eaves, and the lights are installed on the inside to reduce light scattering and avoid affecting the biological clock of birds inhabiting at night. responsible details can influence long-term buying judgments.
in 2021, the coffee industry exposed extreme incidents of the founder of golden milano, zhu xuesong, and his female subordinates chatting with xiaodong and bullying female partners. in fact, not only in china, but women's awareness around the world is awakening, women's self-awareness is improving, and more and more people are seeing the power of girls to help girls. as long as there is one more woman to speak, then this wave of voices will be deafening together.
brand culture originates from its own internal and external real interactive behavior. despite spending a lot of money on the packaging and utensil design of japanese graphic design master kenya hara, despite having a low price strategy of less than 2 yuan and relying on online e-commerce traffic "routines" to bombard wildly, jin milan coffee can't hide the quality of the founder, the lack of corporate culture and brand system construction. in china, facing the female consumer group, the unique category of coffee does not only mean opportunistic business, but the natural cultural attributes and lifestyle opportunities are obviously greater. how to build a real brand by itself seems to be more worthy of consideration. after all, the real premium of a brand comes from the premium that users give to the brand and industry evaluation.
part 7 mounting ears have greater opportunities in the sinking market
online coffee beans, capsule coffee and other specialty coffee users are mostly concentrated in the exquisite white-collar workers in the 1-3 line. there are many first- and second-tier offline cafes. these people have been educated in coffee culture for a long time and have stronger coffee consumption ability.
the cost of coffee utensils and monthly input is relatively high. for the sinking population with an income of more than 1,000 to 600 million, the price threshold of specialty coffee beans still exists, and the prospect of sinking in the short term is not clear.
in contrast, the unit price of hanging ear coffee is lower, the production technology threshold is lower, no additional equipment is required, and there is a sinking time window in 2022.
part 8 coffee utensils and coffee beans sales increased
the market growth rate of coffee cups, hand pour pots, and espresso machines has been very high in recent years, even higher than the growth rate of coffee beans. coffee utensils are suitable for taking photos and sharing. the consumption scene trend of "drinking coffee at home" brought about by the epidemic has also accelerated the consumption of coffee utensils and complemented the consumption of coffee beans.
part 9 professional endorsement and youthful expression are indispensable for coffee brands
there are three types of merchants on tmall. the first is the top brands with cost-effectiveness, such as xinlu and sumida river. some brands have advantages in the production area and supply chain. for example, xinlu's "one kilogram of coffee beans" in 2021 (the price of xinlu's 1kg italian style is around 60rmb) has a large sales volume and is cost-effective.
the second is branding. for example, strong brand merchants such as zhiguangshi, mingqian, lavazza, and illy have been intensively cultivating coffee categories online and offline for more than ten years, accumulating users continuously, and also have a good reputation in the industry.
the third type belongs to the high-end supply type. for example, there is a direct supply chain in a certain production area of geisha or blue mountain, or high-end brand merchants with local brand resources.
these three categories have not yet achieved the ultimate in marketing. brands like seasaw, luckin, and manner, which are cultural trends, have strong offline marketing capabilities, but online traffic has not yet fully developed. professional brands such as zhiguangshi, mingqian, and m2m have not broken the circle on a large scale.
professionalism and cultural attributes both require time and user word-of-mouth precipitation, and no brand can rely solely on e-commerce traffic. for example, the "return flight plan" and "flying market" of three and a half meals, the "go to the origin" plan of master zhiguang, seasaw's high-frequency cross-border joint name, and offline interaction with fans at various coffee festivals, etc. in early 2021, sumida river began to build brand assets. in addition to xiao zhan, the spokesperson for the official announcement, it also became the exclusive supplier of official coffee for the 2022 asian games in hangzhou.
in the future, there may be a fourth category of merchants, and the form of marketing innovation packaging can give users a new experience like three and a half meals. while building user trust with professional endorsements, it has a younger expression in marketing.
part 10 interactive experience is the top priority of brand building
the positioning of boutique fast coffee is price on the horizontal axis and experience on the vertical axis. although the experience of boutique fast coffee is better than the previous instant coffee, the experience is relatively weak.
in the future, more internet coffee brands with deeper experience will be needed. for example, the experience of the offline boutique m stand and seasaw's third space is already very extreme, and the unit price is higher. for example, in the online three-and-a-half user experience, in addition to small cans, there are many peripherals, small programs, "return to flight plans", concerts, etc., users can fully feel the coffee trend culture.
three and a half cups, store pages, sf logistics, after-sales service... are all very important components of the internet coffee brand experience. in the future, brands must have a stronger interactive cultural experience.
part 11 use good content to express coffee brand power
many "xiaobai" who used to drink instant began to try ground coffee such as capsules, hanging ears and coffee beans through content or platform push. in the future, more platforms hope to let more xiaobai "consumption upgrade" through content education, marketing, search recommendation, etc., such as evaluation, content sharing of champion baristas, etc.
it is worth noting that because most people prefer sweet coffee, not all xiaobai will "consumption upgrade".
most of the three and a half kols are photographers and travel experts, because they love free life and have high requirements for the quality of life, which is very consistent with the concept conveyed by coffee.
there are very few professional kols in the real vertical coffee category. tmall will also enhance the content ecology, cultivate some evaluation experts, explore content such as champion baristas, creative coffee drinking methods, etc., to enhance users' awareness of coffee, including coffee consumption decision-making and upgrade etc.
for brands, expressing through content
brand power is important in the coffee category. kols who understand the gameplay of the content platform and have professional knowledge of coffee will have more potential.
part 12 from online to offline, from c side to b side
from an online perspective, in 2021, sumida river's overall online sales will account for more than 80%, and there will be outbreaks in douyin and jd.com. but in order to go from an online brand to a real mass brand, the brand must also dig deep into the offline channel. this phenomenon was not only outstanding in the coffee industry last year, but also in the overall food industry.
in 2021, sumida river will not only enter b-end retail channels such as walmart, metro, hema, and convenience stores, but also effectively and powerfully invade hotel channels such as atour and huazhu citigo, and will continue to explore in the future.
tail
in the documentary "i don't know", luo zhenyu, as the subject of the interview, had an intriguing statement: "in the end of all courses, the management is not the delivery of knowledge at all, but a clear personality worthy of being relied upon." this is true in the coffee industry. the same applies.
in 2021, yongpu coffee decided to make a monthly magazine called "islanders monthly". if the cost is calculated from a financial point of view, the cost of each book is a few dollars. incomprehensible for a coffee brand. but tin insisted on making this publication, and he believes that how to communicate with users is a long-term problem.
last year, all the leading coffee brands were thinking about how to build a larger and more technical supply chain in the future, how to bring more freshness to users, and how to make more product innovations. this is also a long-term problem.
looking at it, the current coffee brands are still doing one thing: cultivating the market, how to let more people drink coffee, this is one thing coffee brands have been doing. from a "long-term" perspective, the coffee industry still needs to be patient in building a supply chain with a source, a culture of warmth, and products with a reputation, and ultimately a good brand with vitality. in the future, more and more people will drink coffee in china, and then it will truly be a trillion-level market.