Chinanews.com client, Beijing, September 17 (Zuo Yukun) The time-honored Tongrentang started selling health coffee. Domestic Internet coffee brands such as Sandton and Yongpu emerged. The exquisitely decorated Internet celebrity cafes occupied the hot topic list... The coffee world is particularly lively recently.

　　However, the excitement is all other people's, and it has nothing to do with COSTA, which is deeply trapped in the trend of closing stores, and Starbucks, which has handed over the "worst season in history".

　　Nowadays, under the attack of milk tea, the coffee market has "two ice and fire", just like different people's feelings about coffee: some people taste sweetness, some people just feel bitter.

People working or relaxing in a coffee shop.

Photo by Zuo Yukun

COSTA trapped in the store closures, Starbucks handed in the worst report card

　　According to media reports, the long-established British coffee brand COSTA, which has been operating in China for many years, has fallen into a trend of large-scale closures.

　　The most serious is Qingdao, which closed all stores; followed by Beijing, which closed nearly 20 stores, and the number of closed stores exceeded 10% of the total number of stores in the Chinese market.

　　Recently, Chinanews.com visited a COSTA store in Xicheng District, Beijing. Although it was a working day, there were a lot of customers in the store, which was quite lively. The service staff in the store were also actively promoting the brand's coupons.

　　When asked about plans for unrelated stores, the clerk said that his store has not received relevant notices and the business in the store has been very good recently.

　　"COSTA has two lines in China, the United Kingdom and the United States, and the main closures are the British line. The United States line where its store is located is operating well." The clerk said.

COSTA coffee shop.

Photo by Zuo Yukun

　　"The closing of loss-making stores is part of the optimization and adjustment of business in China, and is affected by changes in store passenger flow and economic operations." COSTA responded.

　　When it first entered the Chinese market, COSTA had set a "small goal" to increase its stores to 2500 by 2018; but in 2015, COSTA lowered its requirements: by 2020, it will grow from 350 stores to 900 at the time. Family.

　　The reality is more cruel than COSTA expected. After this wave of store closures, the current number of COSTA stores in the Chinese market is only about 400.

　　Starbucks was born in the same year as COSTA and has more than 4,000 stores in China. It seems that Starbucks has a lot of success. However, according to the latest financial report of Starbucks, the two are now considered "difficult brothers".

　　In the third quarter of the 2020 fiscal year (March 30 to June 28), Starbucks net revenue was US$4.2 billion, a year-on-year decrease of 38.2%; net loss was US$678 million, compared with a profit of US$1.37 billion in the same period last year.

　　After suffering the worst financial report in history, Starbucks had to "break its arms to survive."

In August, Starbucks announced that it plans to permanently close about 400 stores in the Americas in the next 18 months and halve the number of new stores it plans to open this fiscal year to about 300.

Established famous companies fell miserably, and street shops became winners

　　Although the names of Starbucks and Costa are well known in the coffee industry.

But looking at the coffee shop rankings of various review software, few big chain brands are on the list in the top ten, but some small coffee shops with unique characteristics are quite popular.

　　Mr. Wei is the owner of an Internet celebrity cafe in Beijing.

There are several stores open, but each is not big, some are even just a small window shop, designed like a small shop in the past, after the coffee is made, it will be delivered from the small window to take away.

　　In Mr. Wei's view, flexibility is the biggest advantage of the store.

While large-brand chain coffee shops were hit by the epidemic, small shops with relatively weak risk tolerance were naturally not immune. "Small and Spirit" helped Mr. Wei at a critical moment.

"Window" coffee shop.

Photo courtesy of respondents

　　"During the epidemic, some of our stores were closed for almost two or three months. During this time, we made coffee to deliver to customers who work at home. We also linked up with some flower shops and made small videos for promotion. After the epidemic has stabilized and reopened, take-out stalls have recovered the fastest, because there is no burden to eat face-to-face." Mr. Wei said.

　　Before starting his business, Mr. Wei had more than ten years of working experience at Starbucks.

In his view, drinking coffee in chain coffee shops is functional, and drinking coffee in small coffee shops is casual. There is an essential difference between the two.

　　"Everyone is a little tired of the aesthetics of chain coffee brands, and the influence of the penetration of photos on social media such as Moments of Friends has become less and less. In other words, those chain stores'look the same, not cool enough.' "Mr. Wei thinks that the advantage of a small store is that it can make the store individual. The coffee beans can be roasted by themselves, and the product creativity can adapt to the market faster. Large stores can't turn around so quickly.

　　“At the same time, in the entire coffee chain brand, Starbucks is the number one, and the others follow in a homogeneous manner. The brand culture has not been established very clearly.” Mr. Wei said.

　　This is also a big worry for COSTA.

After entering the Chinese market, COSTA, which originated in the United Kingdom, still carries the “European aristocracy” style, and its target positioning is biased towards high-end white-collar workers.

At a stage where the Chinese are still increasingly "caffeinating", compared to Starbucks, which has produced many out-of-the-box models such as "cat claw cups," it is difficult for the consumer group or city expansion to sink.

　　This high-cold positioning can also be seen from COSTA's little-known Chinese name "Coast Family", which is in sharp contrast to Starbucks, which has nicknames such as "Star Dad". It was once called "Dead of Thirsty" by netizens.

Will coffee be the next milk tea?

　　Not long ago, the “2019 Guangdong Food and Beverage Top 100 List” released by the Guangdong Provincial Catering Association showed that Hey Tea defeated established catering companies such as Guangdong Restaurant and ranked third, and Naixue’s tea also ranked eighth.

In last year's list, the two ranked only tenth and fifteenth.

　　Young people’s "Fat House Happy Water" milk tea has become popular recently. Walking a few steps in a business district, it is common to find five or six milk tea shops of different brands.

They are also available on the street. Can coffee be as hot as milk tea?

　　According to the "Analysis Report on China's Coffee Industry Market Demand and Investment Planning for 2020-2025" issued by the Prospective Industry Research Institute, China's coffee consumption has reached an average annual growth rate of 15%, and by 2025, the size of China's coffee market will reach 217.1 billion yuan .

The huge market shows that the number of coffee drinkers has been growing, depending on how you let them drink.

Unique internet celebrity coffee.

Photo courtesy of respondents

　　"It is true that in the past few years, milk tea shops have to be better, because they are simpler and have a wider audience. Milk tea can easily sink to third- and fourth-tier cities, but the coffee shop business will be a little narrower." Mr. Wei Said, “But the simpler things are, the harder they are. There is fierce competition between the camps, and the profit margins have been suppressed again and again.”

　　The low cost of milk tea is nothing new.

Some people in the industry have said that the net cost of a cup of milk tea is about 2-3 yuan.

Counting the cup straws, shared rent, utilities, and labor costs, the total cost of a cup of milk tea is probably no more than 5 yuan.

However, the industry’s low-price competition is fierce, and most tea shops usually only sell a cup of milk tea for about 10 yuan, or even 8 yuan.

　　Although coffee sounds higher, the cost is not much higher.

A barista who has worked at COSTA told Chinanews.com that chain coffee companies have a very large material cost advantage. Under the premise that coffee beans are imported and milk is fresh milk, the net cost of a cup of latte is probably also Just 5-6 yuan.

　　"Although coffee shops tend to be larger than milk tea shops, and other additional costs are also more. But the price is much higher than milk tea. It is easy to sell it at 30 yuan, and the overall profit is still higher than milk tea." The barista Said.

　　Under the temptation of objective profits and huge potential market, many freshly ground coffee brands have begun to squeeze into the market.

After receiving exclusive investment from Tencent, Canadian chain coffee brand Tim Hortons said that it will open more than 1,500 stores in China in the next few years; Internet celebrity coffee %Arabica from Japan has also accelerated its layout and has opened more than 20 stores in the Chinese market. .

　　Even a lot of new teas from milk tea, such as Hey Tea, Nai Xue's tea, CoCo, etc., all "came here" and tried to explore innovative coffee products.

Screenshot from Xicha's official Weibo.

　　"Coffee shops and milk tea shops go in different directions. In addition to being more advanced, the social attributes of coffee shops are also irreplaceable. For example, I asked you to have a cup of coffee and sit in the coffee shop. It looks more formal than a milk tea shop. Many." Mr. Wei believes that the future market will be segmented. As long as we focus on this field and work hard, any road will work.

　　So, would you like a cup of coffee or milk tea?

(Finish)