Fighting for the best: new tea drinks fight in the "second half"
The collective growth rate of the new tea beverage industry has slowed down, and the price reduction of leading brands has caused a dimensionality reduction blow, and the industry's influx has been extended to the supply chain
"The next stop, Chongqing!" On April 2, Chayanyose, who previously claimed to not open stores outside Hunan and Hubei, announced that it was about to enter the Chongqing market, saying it was a risky move for survival.
As a smashing new consumer representative brand, Chayan Yuese has been reported to close stores three times in 2021, and Changsha, the base camp, temporarily closed seven or eighty stores.
Sun Cuiying, the co-founder of Chayan Yuese, recently responded to a reporter from the Beijing News, saying that the density of Chayan Yuese’s stores in Changsha had been high before, and consumption had shrunk under the epidemic, and it was “forced out” to enter Chongqing.
It is not only Chayan Yueshen who is forced to respond by the market situation.
Since the end of 2021, the two leading tea brands of HEYTEA and Naixue have adjusted their prices successively, forming a "dimensionality reduction attack" on brands with waist price bands.
At the stage of fierce competition, the industry involution has extended from the competition in the number of stores opened, the competition in the speed of new launches, to the competition in the upstream supply chain.
According to Wang Qinglin, an investor in the consumption field, the new tea drink entered a "watershed" as early as 2018, and the industry development has entered the "second half".
Tea Yanyueshen "runs away" again
The news that Chayan Yuese entered the Chongqing market has attracted attention.
"The decision was a bit sudden, but after the year, the epidemic has repeatedly exceeded everyone's expectations. Familiar scenes, more difficult exam questions, we have closed more stores than before." Chayan Yuese admitted frankly that entering Chongqing is desperate for survival The "daring" is the "forced to change" under the repeated epidemics.
Affected by the epidemic, Chayan Yuese has been reported to close stores three times in 2021, and the number of temporarily closed stores in Changsha, the base camp, once reached 70 or 80.
In the official Wechat information released on November 10 of the same year, Chayan Yuese mentioned that the previous intensive distribution of points had earned dividends in the urban development of Changsha, but under the epidemic situation, it also had to bear the consequences of the reduction in the flow of people.
Previously, the situation of Chayan Yuese was completely different.
In 2013, Chayan Yuese opened its first store in a place of less than 30 square meters at the entrance of Changsha Division. Since 2018, it has obtained multiple rounds of financing such as Tiantu Capital, Shunwei Capital and Wuyuan Capital.
In 2020, Changsha brands such as Chayanyuese, Wenheyou, Momo Dim Sum Bureau, and Hutou Bureau have become the representatives of new consumer brands that are popular with capital, and their popularity is unlimited for a while.
As of December 2020, the number of directly-operated stores in Chayan Yuese has exceeded 290.
Different from other brands, Chayan Yuese’s strategy is to open stores intensively in Changsha, and will not enter the Wuhan market until the end of 2020. Chongqing is the second city outside the province for its layout.
On April 14, Sun Cuiying, the co-founder of Chayan Yuese, responded to a reporter from the Beijing News, saying that the density of Chayan Yuese’s stores in Changsha had been high before, and consumption had shrunk under the epidemic, and it was “forced” to enter Chongqing.
Regarding the various noises in the outside world, she said, "The epidemic may have magnified our shortcomings. Now we must solve problems in development and solve them with an open and positive attitude. Everyone will be more awake. Excessive expansion will cause internal management to fail to keep up. , which may be experienced by all brands and industries.”
Enter the "Second Half"
Since the end of 2021, Chayanyuese is not the only tea company that has exposed "problems".
According to a report by Sina Finance in February this year, HEYTEA will start layoffs by 2022, all of its information security departments will be cut off, and its store expansion department will be cut by 50%.
It is believed that the development of HEYTEA has reached a bottleneck period, and the store expansion department is no longer important.
Hi Tea responded to a reporter from the Beijing News at the time, saying that the company did not have so-called large layoffs, and a small number of personnel adjustments were based on normal personnel adjustments and optimizations based on year-end assessments.
The new direct-sale brand Lele Tea has encountered greater challenges.
In December 2016, Lele Tea first settled in Wanda store in Wujiaochang, Shanghai. It debuted with the business model of "freshly made tea + European bag + third space". Later, it became popular due to the popular "dirty bag" and attracted more attention. Capital attention.
On February 23, 2022, Lele Tea revealed the news that "Guangzhou Linkzhan Store will be open on the last day" and closed its last store in South China.
In response to a reporter from the Beijing News, Lele Tea said, "The temporary closure of stores in other regions is to focus on the East China market. At present, the brand is in a relatively primary development stage. From the perspective of efficiency and strategic layout, it will focus on East China in the past year. The first- and second-tier markets. The closed markets have plans to return in the future, and the Guangzhou area will return within a year." However, as of now, its South China market has not been restarted.
Several sets of research data show that the growth rate of the new tea industry has slowed down after experiencing the heat from 2020 to the first half of 2021.
According to the company survey, there are currently 331,500 milk tea-related companies in my country, and the number of related companies has been increasing in the past ten years.
In 2020, there will be a climax of expansion, with 94,800 new homes added.
In 2021, 85,600 new stores will be added, but the growth rate will slow down.
While the industry is expanding rapidly, competition is also intensifying.
CBNDataX Nai Xue's "2020 New Tea Drinking White Paper" shows that due to the impact of the epidemic, 2020 will become an important turning point in the new tea drinking industry, and "recovery" has become an industry keyword.
According to the data of Tianyancha, as of November 30, 2020, the total number of tea drinking enterprises in China exceeded 300,000, of which more than 130,000 were closed, liquidated, revoked or cancelled, accounting for 43%.
The China Chain Store & Franchise Association report predicts that in the next 2-3 years, the overall growth rate of new tea drinks will be adjusted to 10%-15%.
Facing the superposition of factors such as intensified competition, high rent, limited talent pool, food safety management to be further strengthened, and high proportion of takeaways and low profits, if enterprises continue to grow rapidly in such an environment, there will be great management risks. .
Hu Jihong, the founder of Yihetang, has been in business for 15 years and has witnessed the whole process of the tea industry from barbaric growth to rapid development and then to a slowdown in growth rate.
"From 2012 to 2019, so many brands have grown from dozens to two, three thousand, four or five thousand, and the industry is in a turbulent period. In the past, the rapid growth was due to the differentiated competition among brands in various regions. But now in any market, these brands are there, the competition is fierce, the market is saturated, and the epidemic is only accelerating the reshuffle of the industry.”
According to Wang Qinglin, an investor in the consumption field, the new tea industry has entered a reshuffle period as early as 2018. The reason for the constant financing news in 2020 is that the new consumption track is hot, and there are indeed some bubbles from a capital perspective.
"At present, the game has entered the 'second half'. In the past few years, the growth rate of the new tea market has been more than 30%, and the number of leading brand stores has basically doubled every year. In the process, a large number of local small leading enterprises have been eliminated. From this Since then, the entire market has begun to consolidate. According to my estimation, the top five in the industry now account for nearly half of the market share.”
farewell 30 yuan
The intuitive reflection of the shuffling period is the "involution" of prices.
Nai Xue's tea prospectus and public information show that with the growing demand for new tea experience, customers are more willing to pay more to improve the experience. Therefore, since 2015, HEYTEA, Nai Xue's tea, and Lele have emerged. Tea and other high-end tea shop.
By the end of 2020, there were about 3,400 high-end tea shops in China, with an average price of not less than 20 yuan.
However, in the case of the slowdown in the industry growth rate, the high-end tea that used to cost 30 yuan a cup could not hold back.
On February 24, 2022, HEYTEA announced that it has completed a comprehensive product price adjustment, and will no longer launch new beverage products above 29 yuan during the year, and promised to "never increase the price" of existing products this year.
Comparing the menus, it can be found that the price adjustment covers the vast majority of products sold by HEYTEA, including cheese tea, fruit tea, milk tea, pure tea, and coffee, with a price adjustment range of 1-10 yuan.
It is understood that, with the exception of limited products in individual cities, surrounding areas, and a small number of products in LAB stores and hand-made stores, the prices of products in mainstream HEYTEA stores are already below 30 yuan, and products priced at 15-25 yuan have already occupied HEYTEA. More than 60% of all products.
HEYTEA said that this round of price cuts benefited from its brand potential, scale advantages and continuous accumulation in the supply chain.
Nai Xue's tea price reduction notice also followed.
On March 17, 2022, Nai Xue's tea announced a significant price reduction, launched the "Easy Series" fresh fruit tea of 9-19 yuan, and promised to launch at least one new product under 20 yuan every month.
Previously, the average unit price of Nai Xue's tea was 27 yuan, and the highest price reached 38 yuan.
After the price adjustment, its main price band dropped to 14-25 yuan, with a minimum of 9 yuan, and bid farewell to the era of 30 yuan as a whole.
Also in March of this year, Lele Tea, another high-end tea representative, also announced that it "launched a series of fresh fruit tea without cheese and a series of fresh tea with ingredients removed", and the price was controlled below 20 yuan, with a minimum of 8 yuan You can drink a cup of freshly extracted jasmine green.
Wu Jian, co-founder of Thrilling Burning Immortal Grass, believes that what is currently lacking in mid-end new tea brands is some high-end consumer groups, and what is lacking in high-end brands is mid-end consumer groups.
Under the epidemic environment, purchasing power has declined, and even high-end brands have had a difficult time. The purpose of lowering prices is to compete for customer groups. For mid-end brands, it is a dimensionality reduction blow, and the entire competitive environment will be even worse.
"The epidemic is still a big test for us, profitability is weakening, and gross profit margin is decreasing." Hu Jihong, founder of Yihetang, believes that the price reduction of leading brands is a reflection of the industry's introversion. At present, consumers are not only price-sensitive, but also the frequency of consumption. is also decreasing.
In contrast to the terminal price adjustment, the prices of raw materials are currently rising. Taking into account the burden of franchisees and the affordability of consumers, he bluntly said, "I dare not raise prices."
Supply chain fierce "fight"
Hey tea has meaty grapes, Nai Xue's tea has domineering grapes, Lele tea has grape cheese... Combing through the menus of major new tea brands, we can find that their products have certain similarities, and once new products are popular, major brands will follow up.
In March 2021, Nai Xue's tea launched "Domineering Yuyou Tangerine", which attracted consumers due to its unique taste of "slightly astringent in 3 seconds and 5 seconds back to sweetness".
Two months later, HEYTEA also launched three new citrus drinks, including "Wang Zhuyou citrus".
On June 25th, HEYTEA launched the new product "Huangpi Xianlu", and then Lele Tea, Yihetang, Mixed Juice, Taigai, Chali's Little Monster, Guoyaya, Neighborhood, Guyu, etc. were also launched one after another. Yellow skin raw material drink.
In Hu Jihong's view, new tea products have no secrets, and so-called "popular products" can be imitated by peers in minutes.
"The new tea beverage industry has a strong ability to innovate. Whole grains, fruits, and tea can all be included in the products. Every year, 30 or 50 new products are born in the industry, but the protection of product innovation is not enough, and there is no way to protect it. After the patent application is filed, the formula It's no longer popular."
A direct consequence of product homogeneity is the grabbing of the supply chain.
For example, Hu Jihong said that last year's perfume lemon drink was on fire, and all brands went upstream to grab raw materials for a while, but there were only so many sources of goods, and there were only those channels. A pound, and then the price soared to dozens of dollars a pound, which is terrifying, and this has also increased the influx of the industry."
As a new lemon tea brand established in February 2021, Tan Li, co-founder of Ningji, shares the same sentiments about the price increase of perfume lemons.
Considering that Perfume Lemon is a new variety in China, and the price has increased by 30%-40% some time ago, he believes that Perfume Lemon cultivation must be scaled up, otherwise there will be problems in the supply chain.
With the help of capital, Ningji began to directly deploy the upstream supply chain. In 2021, 1,000 acres of perfume lemons were planted in Guangxi, and another 5,000 acres have been planted so far this year.
"Above the iceberg, what everyone sees is the product and brand, and under the iceberg is the operation and technology."
Regarding the issue of product homogeneity, Peng Xin, the founder of Nai Xue's tea, recently responded to a reporter from the Beijing News, "We also realize that with the maturity of the industry, product homogeneity has become an inevitable trend. Standing out in the industry competition, in addition to the optimization of products and raw materials, is closely related to brand building. This is a long-term process that requires us to continuously optimize product and service experience, tell brand stories well, and enhance consumers' sense of identity and belonging ."
Increased food safety exposure
With the rapid development, the exposure of food safety problems of tea drinks has also increased.
Michelle Bingcheng is the first new tea brand with over 10,000 stores, and will exceed 20,000 in 2021, making it the number one in the industry.
Under the crazy expansion, in May 2021, Michelle Ice City was exposed to the problems of tampering with the expiration date of Kaifeng ingredients and using semi-finished products of overnight tea soup and milk mixture in Zhengzhou Yongan Street Store, Jinan Daguanyuan Store, and Wuhan Mahu Commercial Street Store.
Subsequently, the Zhengzhou Municipal Market Supervision Bureau conducted a special inspection on Michelle Bingcheng, ordered its 35 stores to rectify within a time limit, 3 stores closed for rectification, and issued administrative penalty decisions to 9 stores. Zhang Hongfu, president of Michelle Bingcheng, was also invited. talk.
The issue of food safety is not an exception, and a "regulatory storm" has swept through.
In 2021, local market supervision will carry out continuous supervision and inspection of new tea drinks.
In August 2021, Guangzhou Bengong Catering Service Co., Ltd., an affiliate of “Bengong Tea”, was fined 40,000 yuan for violating the relevant provisions of the Food Safety Law.
On the evening of September 30, 2021, the topic "Tea Baidao uses expired raw materials" appeared on the hot search.
Chabaidao issued an apology letter saying that all stores will be comprehensively investigated and rectified, and those stores that do not meet the requirements will be closed, and those who are serious will be directly disqualified from signing the contract.
Subsequently, the Zhejiang Provincial Market Supervision Bureau carried out surprise inspections on 710 stores of "Tea Baidao".
Earlier in August 2019, Ganchadu attracted attention for "juicing with rotten fruit and cutting fruit with bare hands".
The Market Supervision Bureau of Fengtai District, Beijing punished Dahongmen Intime Department Store Ganchadu Beverage Shop, revoked its food business license, confiscated 455 yuan of illegal income and fined 100,000 yuan.
In addition, law enforcement officers also inspected all 33 Gan Chadu franchise stores in Beijing, and filed investigations on 4 of them.
Hu Jihong believes that many brands have not established food safety control awareness before, but now the situation is different, and the supervision level is also strengthened.
Wu Jian also believes that food safety is the most basic red line in the catering industry. "If you step on it, you will no longer be able to integrate into the industry, and you will not be able to explain to the society." Training and other means to improve food safety.
With the release of the tea industry's first specific product standard "Tea Beverage Series Group Standards", the disordered state of food safety in the tea industry is expected to change.
In November 2020, Nai Xue's Tea and China Chain Store & Franchise Association established the CCFA New Tea Drinking Committee to jointly promote the establishment of new tea industry standards.
(At the request of the interviewee, Wang Qinglin is a pseudonym)
Written by version B04-B05 / Beijing News reporter Wang Ziyang