This industry is on fire! 1 year financing nearly 4 billion! Sinopec, Beijing Tongrentang Co.Ltd(600085) and other enterprises enter the Bureau across borders

At the end of February this year, the first American boutique coffee brand Blue Bottle (blue bottle coffee) opened in Chinese mainland, and many consumers came to Shanghai.

Behind the grand opening of blue bottle coffee is the rapid growth of China’s coffee market.

According to the report on China’s chain catering industry in 2021, China’s coffee industry as a whole grew rapidly, with a market size of 56.9 billion yuan in 2018. In the next few years, the compound growth rate is expected to exceed 25%. The market scale is expected to reach 113 billion yuan in 2021 and 180.6 billion yuan in 2023.

In the 100 billion high growth Chinese coffee market, not only foreign brands such as blue bottle coffee and tims coffee have entered the Chinese market, but also local “troublemakers” one after another.

on the one hand, traditional businesses are embracing the coffee business with a more open attitude recently, China Post’s post office coffee opened and Goubuli established a coffee company. These cross-border actions have attracted public attention.

on the other hand, different types of new coffee stores and coffee brands are blooming and growing rapidly they are rare capital favourites in the consumption and investment market that appears to be weak at this stage.

In February 28th, Seesaw Coffee announced the completion of the A++ round of several hundred million yuan financing. This round of financing will be used for further expansion and digitalization of national stores. On March 1, manner coffee, which has completed three times of financing within one year in 2021, announced that it has opened 200 + stores in 10 cities across the country at the same time.

“Subjects with different backgrounds will have different characteristics in operating coffee business, but we are facing the same fierce competitive environment. How to really do a good job in the product, so that consumers can get a good experience, and how to make features on the content side, social side and lifestyle side need to make more efforts to consider at this stage.” Mai Xing investment partner solemnly told the 21st Century Business Herald.

traditional commercial coffee making: seize young users and win in the number of outlets

Coffee itself has the function of refreshing the brain and certain addiction. The product has prominent functional value and is easy for consumers to repurchase. In recent years, with the acceleration of the pace of life in the first and second tier cities, consumers have gradually formed the habit of drinking coffee.

In addition to product attributes, coffee consumption also has a strong spiritual consumption attribute. For young consumers, meeting with friends in the coffee shop in the afternoon to talk about business or get together easily has gradually become a fashionable lifestyle choice.

The traditional coffee business is becoming more and more mature

Earlier, there were precedents such as Sinopec’s self built coffee brand Yijie coffee, Beijing Tongrentang Co.Ltd(600085) launched traditional Chinese medicine coffee, and the coffee business of the whole family, 711, convenience bee and xisduo convenience stores.

On February 14 this year, China Post opened the first post office coffee and landed in Xiamen Itg Group Corp.Ltd(600755) building, officially entering the coffee market. On February 22, Goubuli, a time-honored brand in Tianjin, registered and established gaoleya coffee food (Tianjin) Co., Ltd., trying to take a share in the busy coffee market.

“When traditional enterprises like China Post face new consumers, they will want to upgrade their brand image so that everyone can better accept it. The reason why they choose to rely on the coffee business may be that coffee, as an imported product, has its own attributes of fashionable lifestyle, which is in line with the spiritual consumption characteristics of young people.” A consumer investor told the 21st Century Business Herald.

For time-honored catering enterprises like Goubuli, doing coffee business is also an active exploration to seize young users. It is understood that as early as early as 2015, Goubuli announced that it had obtained the permanent use right of Australia’s largest coffee chain brand gaoleya in China, and planned to open 200 new chain stores in five years. Now, seven years later, Galleria has only opened more than 20 stores in China.

“The establishment of the coffee company shows Goubuli’s determination to try to develop the coffee business again.”

The above investor analysis said. Goubuli is mainly engaged in steamed stuffed buns and snacks. Its business hours in a day are relatively limited, and it is still a brand with strong local characteristics. Actively developing coffee business is conducive to the transformation and development of old brands, or will open the second curve for enterprise performance growth.

for convenience stores, the logic of selling coffee may be similar to that of selling soybean milk, which is a good supplement to convenience services and can catch the coffee consumers who are extremely sensitive to price . Taking convenience bee established in 2017 as an example, considering consumers’ demand for cost-effective fast coffee, convenience bee has launched coffee categories to all stores since 2018, with a price of about 3-11 yuan. In four years, convenient bee coffee has become one of the top selling categories in the store.

In 2021, “sleepless sea sober Hi” beverage station quietly appeared in a large number of convenience bee stores. It is understood that sleepless sea is an independent brand parallel to convenient bee, mainly to meet consumers’ demand for high-quality coffee and hand brewed coffee, and added new tea categories.

The person in charge of convenience bee told the 21st Century Business Herald that the simultaneous promotion of self-service coffee and sleepless sea is to give consumers a “one-stop” shopping experience. In the future, convenience bee will continue to make use of its digital advantages to develop online red coffee that meets consumers’ expectations. In addition, while expanding the number of stores, convenience bee will promote the opening of new stores with coffee as its main product.

\u3000\u3000 ” traditional commercial coffee business has the main advantages of sufficient outlets and reusable rental costs, which makes up for the lack of chain operation of cafes in the market to a certain extent. However, the disadvantage is that if the products can not occupy the minds of users, the business model may be difficult to run through . For example, China Post did not succeed in making milk tea shops before, and China Post The conversion rate of Yijie coffee made by petrochemical is also relatively low. ” A chain coffee practitioner told the 21st Century Business Herald.

capital flocks to new brands: high expectations form overvalued values, and the decisive victory lies in tonality, product power and chain ability

Many investors told the 21st Century Business Herald that traditional business transformation to make coffee is a supplement to the market, but it is difficult to become the mainstream. The leader of the coffee market must be a professional coffee entrepreneur or entrepreneur. This may also be one of the main reasons why coffee tracks have attracted so much gold in recent years

Cvsource investment data show that in 2019, 2020 and 2021, the number of financing events of Chinese coffee brands were 24, 25 and 32 respectively, and the transaction amount was 1.599 billion yuan, 1.582 billion yuan and 3.936 billion yuan respectively.

In terms of financing scale, 2021 is more than the previous two years combined.

On February 28, seesaw coffee completed the a + + round of financing, with an amount of hundreds of millions of yuan. While announcing the financing news, seesaw coffee also announced its performance in 2021. In 2021, the brand achieved more than three times of performance growth, and the same store sales ratio was as high as 85%. In 2022, the team plans to achieve 3x performance growth on the basis of the previous year.

Cornerstone capital participated in the investment in seesaw coffee. Its managing director Huadu told the 21st Century Business Herald that seesaw coffee, founded in 2012, is the ancestor of Shanghai boutique coffee and has good product quality and brand tone. In the process of development, the follow-up enterprises have continuously polished the stores and supply chain, and have the ability of standardized output. Meanwhile, in 2020, seesaw coffee caught the trend of tea consumption of Chinese consumers and launched a creative coffee product line to meet the consumption needs of entry-level consumers.

“In conclusion, seesaw coffee has solid basic skills, product innovation, supply chain, quality control, service standardization and strong store design ability. At the same time, it has good brand aesthetics and brand tonality, and is good at capturing trends for innovation. These are the good points of cornerstone capital.” Huadu said.

A leader in the coffee market, as well as manner coffee in the process of rapid expansion Last year, it received investments from Temasek, meituan Longzhu and byte beat. After byte beat entered the board in June 2021, manner coffee’s post investment valuation rose to US $3 billion, doubling the valuation in less than half a year. In addition, the valuation of M stand, which obtained the investment of Qicheng capital, black ant capital and Gaorong capital, also increased surprisingly. Its valuation in round a financing was 700 million yuan, and the valuation in round B financing six months later rose to about 4 billion yuan.

Why is capital willing to give high valuation to new coffee brands? Solemnly believe that, first of all, these valuations reflect investors’ expectations for the growth space of coffee categories and specific brands. Whether from the perspective of benchmarking the overall scale of coffee consumption in Europe and the United States or from the perspective of the concentration of coffee players in the Chinese market, investors will feel that there may be more than one coffee brand with a valuation of 10 billion in the Chinese coffee market.

Second, over the past two years, the global currency has been issued, and the funds hope to find a better investment direction. China’s consumer market is relatively stable, and the US dollar fund is more involved in investing in China’s consumer market, choosing the coffee brand as the investment target. ” so in the short term, the current valuation of some coffee brands may overdraw the future growth space, but it is reasonable in the current macro environment .” He said.

However, capital power can only help. What can play a decisive role in the coffee war is the tonality, product power and chain management ability of the brand itself. Huadu said that coffee is inherently tonal and represents a way of life. This category is essentially an addictive consumer product. At the same time, it has the function of refreshing, the social attribute of the third space and the attribute of self pleasure. Chain brands can only become the main role in the coffee field if they make the best of at least two of these three attributes. On the contrary, they will be marginalized.

Looking at the future coffee market, Huadu believes that the different trend between China and foreign countries is that China’s tea and coffee may move towards integration. The trend of tea drinking and coffee drinking has emerged. At the same time, the head brand of new tea drinking, Xi tea, has invested in seesaw coffee, which may be a potential layout.

“In the future, it may be a brand group that can be benchmarked against Starbucks and become a current beverage company with global layout. It has both tea business and coffee business. Capital is also willing to help the formation of this brand group representing China.” “This is what cornerstone capital is trying to do,” she said

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