The Intense Competition in Coffee and Tea Markets Is Enriching Their Suppliers!

As ordinary consumers, we've grown accustomed to watching coffee and milk tea brands fiercely compete with each other through collaborations, new product launches, price reductions, and various marketing tactics that enrich our daily lives. While major brands like Heytea, Nayuki, Starbucks, and Luckin Coffee have long been deeply embedded in our consciousness, few people notice the suppliers behind these successful enterprises.

The Wave of IPOs Among Suppliers

Since last year, multiple suppliers of new-style tea beverages and coffee have been rushing to go public, including Hengxin Life, Tianye Stock, Jiahe Food, Baoli Food, and Sanyuan Bio, all queuing for IPO listings.

Jiahe Food, established in 2001, was among the first consumer suppliers to go public. Its major clients include well-known beverage companies like Uni-President and Xiangpiaopiao, as well as new-style tea brands such as CoCo Fresh, Shanghai Aunt, Guming, and MIXUE.

Following closely is Sanyuan Bio. While end consumers might find this name somewhat unfamiliar, the company has specialized in the industrial production of erythritol since 2007. Erythritol is a sugar substitute primarily used as a bulk sweetener in food and beverages. According to Sanyuan Bio's prospectus, Genki Forest is their number one client, while they also supply erythritol to Heytea, one of the new tea giants.

Juice Suppliers Riding the New Tea Wave

In addition to companies providing sugar substitutes, juice raw material suppliers have also made substantial profits amid the explosion of new-style tea beverages.

Tianye Stock, established in 2007, offers products including raw fruit juices, frozen fruit chunks, and fresh fruits. Tianye Stock was listed on the New Third Board in 2015, but this was just before the new consumption boom. Until 2020, more new tea brands joined Tianye Stock's client list, with Nayuki becoming its second-largest customer. In 2021, just four brands—Nayuki, ChaBaiDao, Yi Dian Dian, and Shanghai Aunt—contributed 56.49% of its operating revenue.

This May, Hengxin Life submitted its prospectus to apply for a listing on the ChiNext Board, planning to raise 828 million yuan. Many people may be unfamiliar with this enterprise, but well-known brands such as Luckin Coffee, Staples, Amazon, Heytea, Starbucks, Yihe Tang, McDonald's, Dicos, MIXUE, Manner Coffee, Burger King, CoCo Fresh Tea, Guming, and DQ all use the paper and plastic food service products provided by this company. In 2021 alone, Hengxin's annual revenue reached 719 million yuan, selling an astonishing 2.1 billion paper and plastic cups.

The Broader Supplier Ecosystem

On July 6th, Dexin Food disclosed its prospectus, planning to list on the main board of the Shenzhen Stock Exchange. Dexin Food's main products include beverage concentrates and flavored syrups, making it one of the raw material suppliers for coffee and tea brands such as Luckin Coffee, Starbucks, and Nayuki.

The rapid development of new-style tea beverages has driven the fast growth of upstream suppliers. With soaring performance, these companies are rapidly entering the capital market. While Nayuki calls for breaking even and Heytea hovers at the IPO threshold, new consumer products face fierce competition in the terminal market. Meanwhile, the suppliers behind them are reaping substantial profits and embarking on a collective path to public listings.

Image source: Internet

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