Text | Meal Alliance Research
The busiest investor in the tea drinking track in the second half of this year is not a first-line VC, but a tea.
Less than half a month after the last shot, Heytea anchored the target again. This time, Xicha selected a fruit drink brand "Wild Cuishan" that focuses on "molecular juice".
According to Tianyan, on November 11, Shenzhen Haolin Catering Co., Ltd., an affiliate of Yecuishan, added Xicha (Shenzhen) Enterprise Management Co., Ltd. as a shareholder. At the same time, Nie Yunchen, the founder of Xicha, was added as the chairman.
After the completion of the delivery, Xicha will hold 60% of the shares and become the largest shareholder of Yecuishan.
After a brief stop at the coffee and drinking track, Heytea seems to have "closed his heart" back to his track and focused on horizontal investment.
What is it like to spend 1,000 yuan on a glass of olive juice?
It is made by hand with a full pound of material and takes more than two hours. The point is that if you want to drink, you may not be able to line up.
Such a cup of sky-high olive juice comes from the "Wild Mountain" selected by Xicha.
Founded in 2019, Yecuishan was formerly known as the Fruit Ice Brand "TANK Stone Fortress" of the Chaoshan region. Guozi ice is a popular juice drink in Chaoshan Province, mainly made from fresh fruit and yogurt, mixed with ice cubes and whipped.
From 2017 to 2018, a large number of fruit ice drink shops emerged in Chaoshan and Shantou. "TANK Stone Fortress" once became popular on social platforms overnight because it sold a cup of "Golden Jade Three Twisted Olives" with a unit price of 1,000 yuan.
After moving from the Chaoshan area to Shenzhen, Yecuishan "made a makeover", combining molecular cooking technology with the original production process, and using "molecular juice" as a selling point. In addition to the regular items, a cup of expensive fruit drink products such as durian juice and Shakya juice of 108 yuan is launched in the season.
Since its inception, the unit price of Yecui Mountain has remained at a high level of about 35 yuan, mainly compound juice products, and classic items include avocado strawberry kashi, mango kashi, nuan nuan Huaishan and so on.
From the perspective of product raw materials, Yecui Mountain and Heytea highly coincide. Jufeng grapes, mangoes, strawberries and other fresh fruits are the main raw materials for the two brands' explosive products. For example, Heytea has succulent grapes, succulent mango manna and Shiba raspberry, and correspondingly, Wild Peak Grapes, Mango Kashi and Peach Strawberries are available in The Wild Mountain.
It can be seen that it is possible for Xicha to complete the re-integration of the industrial chain through the merger and acquisition of Yecuishan.
It is worth mentioning that Yecui Mountain has established a firm foothold in Shenzhen and even the entire Guangdong region, and can bear its own profits and losses.
At present, the number of offline stores in Yecuishan exceeds 30, and the average monthly sales of a single store exceeds 14,000 cups. Among them, the Shenzhen Shopping Park store of Yecuishan once set a record of 11362 orders in a single month, and topped the national sales list of the juice category.
Although they also rely on net red single products to get out of the circle, Ye Cui Shan and Xi Cha have made different choices in brand differentiation. Nozomi-san plays more like Natsuki, intending to turn tea into a business that makes a profit from the "third space" like Starbucks.
In terms of store settings, There are three kinds of standard stores, flagship stores and ToGo takeaway stores. The flagship store in Shimutian, Shenzhen, is one of the three most prosperous stores in Yecuishan, covering an area of more than 1,000 square meters, with 10 different theme spaces, and the whole store is open 24 hours.
What is less well known is that Nozomiyama and Hicha are not "first acquaintances". Many members of the Nozomisan team came out of Heytea. Xicha, which loves cross-border co-branding, has planned marketing activities with Ye CuiShan as early as 2019. With a small ticket for the purchase of Heyte tea "Avocado Yogurt Bobo" or "Succulent Grapes", you can redeem the same drink at the Yecuishan store. This "free comparison" has created momentum for the new "avocado" product launched by Xicha, and Yecuishan has also gained a group of new fans. After the first collision between the two strongweights in Shenzhen, it ended in a win-win situation.
It is reported that after the merger and acquisition of Yecuishan by Heytea, it will provide resource support for Yecuishan in terms of product innovation research and development, supply chain system construction, etc.
It is worth noting that this is the first holding investment of Heytea. In other words, Xicha has changed from simply throwing money and betting to becoming more "overbearing".
The investment in Xicha is concentrated in the second half of this year.
Counting Mt. Nozomi, Heecha has been shot 5 times. What is intriguing is that every time Heytea invests in objects, it seems to be irrelevant.
The first time, Heytea chose coffee that did not conflict with its own business.
On July 21, SeeSaw, a local specialty coffee brand in Shanghai, announced the completion of the A+ round of financing of more than 100 million yuan, and the old shareholder Hony Parkway followed suit, but Heytea appeared on the list.
The two sides did not meet, and Nie Yunchen, the founder of Xicha, finalized the investment with a late-night phone call.
Entering the coffee track, Heytea is by no means a whim. In March 2019, Heytea launched four coffee drinks, namely Coffee Bobo Ice, Coffee Bobo Double, Zhizhi Latte and Zhizhi American.
However, Heytea has no immediate plans to transform into specialty coffee. In terms of products, Heytea adds a large number of milk tea elements, such as pearls, cheese, ice cream, etc., intended to dilute the taste of coffee.
The practice of hi-cha is not a precedent. As early as the end of 2018, CoCo can launch high-quality filter coffee, and stores in Shanghai and Nanjing have opened at 8 a.m. to sell breakfast coffee, successfully attracting two groups of consumers who drink milk tea and coffee. In contrast, the transformation of Heytea has little echo, and the response after the first online coffee drink is mediocre. It took another year to launch two new products - snow mountain vanilla latte and snow mountain mocha.
Today, Heytea's new coffee menu two years ago retains only the three basic models that are common in American, latte and vanilla.
Heytea's second investment is still related to coffee. On September 27, Heytea extended its olive branch to the oat milk brand "Wild YePlant" and added a foreign investment to Anhui Green Tomato Biotechnology Co., Ltd., holding 15% of the shares.
Oat milk coffee has been a hot item in coffee shops in the past two years. With the momentum of oat milk in the third wave of coffee, it took only one year for wild plants to grow into the second largest supplier of oat milk in the country.
This investment in Heytea is aimed at the combined value of coffee and oat milk. Once the future heytea shows its fist on the coffee, it can fully mobilize the resources of both sides, not only solve the problems in the supply chain in advance, but also have a way of playing to learn from.
The next two investments occurred in October. XiCha's left hand was thrown to the wine drink, and the right hand took the tea drink along.
The Series A funding round of WAT, a new national pre-mixed liquor brand, was jointly led by BAI Capital, Heytea and Tomato Capital.
However, before Heytea officially announced its investment in WAT, WAT and SeeSaw launched a cross-border co-brand of coffee and wine in September.
Not only that, but Heytea's investment in SeeSaw is less than a month old, and SeeSaw launched its first "day and night wine" coffee shop on Tongren Road in Shanghai's Jing'an District.
Many people in the industry speculate that Heytea wants to borrow SeeSaw to test the "tavern".
However, Xicha has long touched the boundaries of drinking. In 2018, Heytea Chengdu's black gold flagship store launched a new product of "spring, summer, autumn and winter" four seasons of wine drinking; in 2019, Heytea and Bacardi signed a cooperation plan, and Bacardi will provide shipment guarantee for Heytea. Subsequently, Heytea launched a limited drink with low alcohol.
It is not difficult to see that the idea of Xicha's several shots is the same: redo the attempt and use investment to reduce the risk of trial and error.
Including investing in tea brands and peach peaches, which are the main peach tea drinks, Xi Tea still copied the idea of "re-doing".
Investing in the same fruit tea and peach peach, the intention of hey tea is also obvious. The unit price of Heqi Peach Peach is at the same level as Xixiao Tea, a sub-brand of Hexi Tea, but Heqi Peach peach has completed regional replication to the whole country, and Xixiao Tea is still dormant in the Pearl River Delta region.
How to conquer the sinking market, Xicha is still brewing.
The tea and coffee wine war is intensifying, and if Xicha can form a brand matrix through horizontal investment, it will undoubtedly repair the moat deeper.
Investing is getting hotter than ever.
Also in the second half of this year, strong tea brands such as Honey Snow Ice City and Tea Beauty have done the work of VCs.
On July 31, the news of Cha Yan Yue's strategic shareholding in Guo Ya Came out. The latter was established in 2013 and is also a tea brand native to Changsha, focusing on fresh fruit tea.
After the strategy of tea beauty and color is invested, it will cooperate with Guo Ya ya in the form of joint concept stores and joint products.
Michelle Ice City is more aggressive than Xicha in terms of being an investor. Even spent 50 million yuan to register a venture capital company - Snow King Investment.
A month after the establishment of Xuewang Investment, it invested in a Guangdong tea brand called "Hui Tea". Founded in 2015, Huicha has its base camp in Dongguan, Guangdong Province, and its stores are mainly distributed in Guangdong and Hainan.
HuiCha focuses on bubble tea, and its main product is a "golden charred bubble tea" containing only natural tapioca powder. Huicha and Mixue Ice City are positioned the same, and the targets are both sinking markets.
In addition to finding investment objects in the same kind, Michelle Ice City and Chayan Yueshi also began to "invest upwards" and invested a large amount of money in the supply chain.
In September, Chongqing Xuewang Agricultural Co., Ltd. was established with a registered capital of 50 million yuan. The company is 100% controlled by Michelle Ice City Co., Ltd., and its main business scope is the acquisition and processing of agricultural products.
In the same month, Hunan Xiangming Biotechnology Co., Ltd. was established with a registered capital of 5 million yuan, which was wholly owned by Hunan Tea Yan Yue Color Cultural Industry Development Group Co., Ltd.
The layout of raw materials and agricultural products can stabilize the cost of tea drinks, ensure quality control and safety, and at the same time be the most secure investment rule.
As early as 2017, Heytea had its own tea garden in Fanjingshan, Guizhou. Nai Xue contracted 165 acres of strawberry orchards in Yunnan to achieve a year-round supply of strawberry materials.
Investing in the supply chain has received positive feedback on the new tea drinking head Yanxi Tea and Nai Xue.
According to the data of the Nesher Prospectus, the raw material cost of Nesher accounts for almost one-third of its cost structure. Its raw material cost accounted for 35.3% of the total cost in 2018, 36.8% in 2019, and fell to 35.8% in 2020.
Working the supply side is destined to be a protracted battle. However, assuming that Nesher does not increase its input, the fluctuation of raw material costs affected by the price of out-of-season fruits will only increase.
In fact, whether it is an upward investment or a horizontal investment, the urgency of the new tea drinks to strengthen the city is obvious.
After the rapid expansion boom has receded, more and more powerful tea brands want to accelerate growth through investment.
In its 2020 annual report, Xicha mentioned that in 2020, 202 new main stores were added, 102 new Go stores were added, and a total of 695 stores were opened in 61 cities around the world. There is still a difference of nearly 100 KPIs from the KPI of "opening 800 stores" originally set by Heytea.
In addition to the march all the way to break through the 20,000 stores of The Ice City. Because of the impact of the epidemic, The tea face is also affected by the epidemic, and the store is temporarily closed for three consecutive times. This seems to be the norm for tea brands to survive.
It can be seen that before the day of taking stock of investment income comes, Xicha must first survive the big waves and sands.