Some brands close nearly 600 stores a year, some brands completely disappear from the public eye, and some brands completely transform...... Why can't a fruit coffee shop become a long-term business?
This article was originally published by Red Meal Network (ID: hongcan18), author: Zhou Mo; Editor: Wang Xiuqing.
Consumers don't like to drink fruit coffee anymore?
Recently, a shopping mall in Guangzhou called "Coffee Stop" coffee shop closed and withdrew, the brand's main product is fruit coffee, which has opened 4 stores in Guangzhou and Foshan, and now all of them have been closed.
△ Image source: Photo by Red Meal Network
In fact, in addition to "coffee can't stop", there are also a number of fruit coffee brands that have recently closed stores or transformed, such as "should not have been", which was once regarded as the head brand of the fruit coffee track and had more than 700 stores, and is also continuing to shrink the scale of stores.
As a sub-category that has risen rapidly in recent years, fruit coffee has not only given birth to a number of brands, but also become a breakthrough in the cross-border coffee track of some well-known tea brands. However, in the past three years, the track has ushered in a reshuffle.
There are brands that close nearly 600 stores a year!
The fruit coffee brand has been reshuffled
The development process of "shouldn't have been" can be regarded as a microcosm of the fruit coffee track to a certain extent.
According to official information from "There Should Not Be", the brand was founded in September 2021, and its first store landed in Huizhou, Guangdong. With the differentiated positioning of Fresh Fruit Coffee and the window design of ATMs, stores that "should not have been" were quickly rolled out across the country. According to public reports, the total number of stores of the brand in the country once exceeded 700, and the layout area includes Guangdong, Beijing, Shanghai, Hefei, Liaoning, Qinghai, Tibet, Heilongjiang and other provinces and cities.
But the good times didn't last long, and from the second half of 2023, "it shouldn't have been" was exposed to frequent store closures. On February 22 this year, the Douyin account "Shouldn't Have Been Supposed to Be" posted a video saying that in the past six months, "it shouldn't have been" has closed down a lot of stores, from 725 stores at its peak to more than 300 stores now (February 22), and the number of stores has plummeted by nearly 6%. He himself was also in a loss-making situation, and he sold two sports cars as a result.
Red Meal Network observed that the recent wave of store closures that "should not have been" is still continuing. On social media, many netizens from all over the world posted the news that there should not have been a store closure in the local area.
△ Image source: Screenshot of Xiaohongshu
According to the "Shouldn't Have Been" mini program, as of May 10, 2024, there are only more than 140 stores left in the country that can place orders online. This means that in the past year, there should have been nearly 600 stores, and the total number of stores has dropped by about 8%.
Similar to the situation of "shouldn't have been", many brands that once featured fruit coffee are facing store reductions, product structure adjustments or transformations.
According to the official account "Kamen", in May 2022, Shenzhen's new fresh fruit coffee brand "Monster Sleepy Coffee" was founded, and 9 stores were opened in Shenzhen, Guizhou and other places in about half a year. At that time, the monster was sleepy, and the founder also said that he planned to open 200 stores in 2023. But now, instead of increasing, the number of stores trapped by the monster has shrunk, and the Monster Trapped Mini Program shows that only 5 stores of the brand are open in Shenzhen.
△ Image source: Screenshot of Dianping
FELICITY ORIGIN Fruit Coffee, which was established in August 2020, has stopped updating its official account since July 2023, and Dianping shows that the brand has a store in Guangzhou Science City, and its store in Zhujiang New Town has been transformed into a sandwich shop;
Cavani Coffee Fresh Fruit Tea, which was also established in Guangzhou, has opened about 20 stores, and its official public account has been suspended in February 2023, and public reviews show that all its stores have been closed;
△ Image source: Screenshot of Dianping
Ji Xu Fresh Fruit Coffee once opened more than 12 stores in Xi'an, but now only one store is included in Dianping......
There are also a number of brands featuring fruit coffee that have undergone business transformation and product structure adjustment, such as:
In March 2023, Shanghai Auntie announced the launch of the coffee sub-brand "Shanghai Coffee Fresh Fruit Coffee", which mainly operates in the form of a "shop-in-shop", with products including classic coffee and specialty coffee. However, when Shanghai Coffee appeared as an independent store in January this year, the brand name had been changed from "Shanghai Coffee Fresh Fruit Coffee" to "Shanghai Coffee Oriental Latte".
In March of the same year, Tianlala's freshly extracted fruit coffee brand "Ka Xiao Tea" opened its first store in Shanghai. But by April this year, the door information of its new store had been changed from Fruit &coffee to Chinese coffee.
A smash hit,
The head brand opens more than 500 stores a year
In the past, fruit coffee mainly appeared in cafes large and small as specialty coffees. As a sub-category, fruit coffee has risen in the form of specialty stores, which can be traced back to 2020, and seasonal fruits and niche fruits such as durian, avocado, mandarin, olive, bara, and prickly pear have all been applied to a cup of coffee.
According to CBNData's "Online Coffee Market Consumer Insight Report", the scale of online "fruit extract" coffee consumers will increase rapidly in 2020. The trend about fruit coffee also spread to offline that year. In the same year, the fresh fruit coffee brand was established, which should not have been represented.
In April 2021, Luckin Coffee's super popular raw coconut latte was launched, which further gave birth to the boom in the fruit coffee market. According to the financial report of Luckin Coffee, as of April 2022, more than 100 million cups of raw coconut latte have been sold in about a year after its launch. In the following two years, the popularity of the fresh fruit coffee track soared. It should not have opened more than 500 stores in 2022, with an average of more than 1.3 stores per day.
△ Image source: Photo by Red Meal Network
Capital also threw an olive branch to the fruit coffee brand. FOR EXAMPLE, FELICITY ORIGIN RECEIVED A 10 MILLION YUAN IN SERIES A FINANCING FROM FUWO FUND IN APRIL 2022; Monster Sleepy: Fresh Fruit Coffee won the million-yuan angel round of financing of Naixue's fund "Beautiful Own Power" only half a year after its establishment.
At the same time, a number of well-known tea brands have also joined the battle, such as Shanghai Auntie, Tianlala and other tea chain brands have launched specialty stores focusing on fruit coffee.
The number of entrants has increased rapidly, and differentiated ideas around fresh fruits have emerged, and fruit coffee has become the focus of creative experiments of major coffee brands and tea brands, and they continue to launch fruit specialty coffee drinks. For example, after Luckin raw coconut latte, it also launched green latte, orange C American, pomelo C American, etc. On the menus of many coffee shops, you can also see durian, avocado, raspberry, cherry, dragon fruit and other flavored fruit and coffee products.
New tea brands are also chasing new ones. Naixue has added fruit coffee drinks to the original product line, and launched creative fruit coffee drinks such as "Big Coffee Lemon", "Big Coffee Avocado" and "Big Coffee Orange"; CoCo can combine green grapes, mangoes, lemons, strawberries, passion fruit and coffee to launch 5 types of fruit coffee.
△ Image source: Nai Xue's official Weibo of tea
As the popularity continues to rise, fruit coffee has become a hot subdivision track.
Fruit coffee specialty reduced to a short-lived business?
In fact, fruit coffee as a product does not have much flaw, but based on the development status of major fruit coffee brands, this subdivision has not run a relatively successful model or brand.
Zhai Bin, a columnist for Red Food.com, said that fruit coffee can exist as a supplementary category on the menu of cafes, but it is difficult to become an independent store. "Last year, I opened a fruit café shop on the first floor of a shopping mall near my house, and I predicted that I would not survive to pay the rent next time. Sure enough, it fell in 3 months. ”
Wang Yugang, a columnist for Red Meal.com, also believes that fruit coffee is not suitable for the form of a specialty store, and the positioning of fruit coffee shop is not established. "Consumers drinking coffee is often a process from fruit coffee, milk coffee to American style, and fruit coffee is more like a transitional role."
This is indeed a major feature of the domestic coffee market, compared with the sour and bitter classic coffee, the sweetness of the fruit and the multi-flavor fruit coffee are added, which enhances the palatability of the coffee and lowers the threshold for consumers to try. In other words, fruit coffee is a means for coffee brands to educate the market.
The co-founder of NOWWA Coffee has said that the users of Hey Tea and Nai Xue are actually coffee users, and consumers are more in pursuit of "coolness" in taste and habits under the education of the new tea brand.
While fruit coffee specialty stores are shrinking, closing stores, and transforming, chain coffee brands such as Luckin, Cudi, Starbucks, and Nova are still continuing to launch fruit coffee products. For example, since 2024, Starbucks has launched products such as Golden Roasted Ice Shaken Peach Oolong, Strawberry Cheese Flavored Mousse Concentrate, Pineapple Lemon Power Raw Coffee, and Light Gold Raw Coffee. Luckin Coffee has also launched a variety of fruit coffee flavored drinks such as Chu Orange Latte, Little White Pear Latte, Iced Raw Coconut Latte, and Lemon C American; In March, Luckin Coffee also announced that the sales volume of Orange C series fruit coffee products exceeded 100 million cups.
△ Image source: Luckin's official WeChat public account
The intensification of competition in the coffee market has also weakened the advantages of fruit coffee as a market educator to a certain extent, resulting in a direct impact on fruit coffee shops.
On the one hand, the coffee market products continue to roll in, in addition to fruit coffee, there are also a variety of different flavors of "sweet coffee", such as tea coffee, oat milk coffee and other products, consumers' choices are more diversified.
On the other hand, the "9.9 yuan" price war is constantly squeezing the living space of middle-waist coffee brands, and the new entrant fruit coffee brand is in the middle of it.
In February 2023, Cudi Coffee announced the launch of the "Coffee Carnival in 100 Cities and 1000 Stores", with more than 70 products starting at 9.9 yuan. In April of the same year, Luckin Coffee announced that it would place a 9.9 yuan coupon in the Luckin store around the newly opened Cudi. Later, brands such as Tims and Starbucks also joined the fray. On life service platforms such as Meituan, Ele.me, and Douyin, it is not uncommon for Starbucks to cost 15 yuan a cup and Tims to 9.9 yuan a cup at an average price.
△ Image source: Photo by Red Meal Network
In April, Cudi announced that the current store subsidy policy would be extended until December 31, 2026. This means that the price war in the coffee market will continue.
In the fruit coffee brand, in addition to the number of stores that should not have more than 100, most of the rest are a few or more than 10, which have neither volume advantage nor brand awareness, and in the face of fierce and cruel business wars, the pressure on fruit coffee brands can be imagined.
In addition, the coffee track is also accelerating the reshuffle. According to Qichacha data, as of April 15, 2024, there are 128,800 existing coffee enterprises in the country, of which the number of new enterprises in 2023 will be close to 40,000. This means that more than 30% of the existing coffee companies will be established in 2023.
While new players continue to pour in, old players keep quitting. According to Qichacha data, in 2023 alone, more than 11,000 coffee companies will fall.
In general, although there is still a need for palatable coffee products in China for market education, fruit coffee is not the only product with this function. The scale expansion of the top players and the high-flying price war are constantly squeezing the living space of the subdivision of fruit coffee.
"The trend of coffee and milk tea is the trend, but the end game is still undecided. Nowadays, under the superposition of a series of factors such as consumption downgrade, serious involution, cross-border competition, and the Matthew effect, there is less and less room for innovation and trial and error for small and medium-sized brands, and this feature is especially obvious in fruit coffee brands", Zhai Bin analyzed.