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

As ordinary consumers, we've grown used to watching coffee and milk tea brands battle it out through collaborations, new launches, price cuts, and endless marketing tricks that keep our daily lives stocked with novelty. Names like Heytea, Nayuki, Starbucks, and Luckin Coffee are burned into our minds, yet few people ever notice the suppliers standing behind these successful companies.

A Wave of Supplier IPOs

Since last year, a string of suppliers to the new-style tea and coffee industry have rushed toward the public markets. Hengxin Life, Tianye Stock, Jiahe Food, Baoli Food, and Sanyuan Bio are all queuing up for IPO listings.

Jiahe Food, founded in 2001, was one of the earliest consumer suppliers to go public. Its major clients include established beverage companies such as Uni-President and Xiangpiaopiao, along with new-style tea brands like CoCo Fresh, Shanghai Aunt, Guming, and MIXUE.

Close behind comes Sanyuan Bio. End consumers may find the name unfamiliar, but the company has specialized in the industrial production of erythritol since 2007. Erythritol is a sugar substitute mainly used as a bulk sweetener in food and beverages. According to Sanyuan Bio's prospectus, Genki Forest is its number one client, and it also supplies erythritol to Heytea, one of the new tea giants.

Juice Suppliers Riding the New Tea Wave

Beyond the companies supplying sugar substitutes, juice raw-material suppliers have also profited handsomely from the explosion of new-style tea beverages.

Tianye Stock, established in 2007, offers raw fruit juices, frozen fruit chunks, and fresh fruit. It listed on the New Third Board in 2015, just before the new consumption boom took off. It wasn't until 2020 that more new tea brands joined its 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. The enterprise may be unfamiliar to many, 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 this company provides. In 2021 alone, Hengxin's annual revenue reached 719 million yuan, on the back of an astonishing 2.1 billion paper and plastic cups sold.

The Broader Supplier Ecosystem

On July 6th, Dexin Food disclosed its prospectus, planning to list on the main board of the Shenzhen Stock Exchange. Its 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 pulled their upstream suppliers along with it. With performance soaring, these companies are quickly 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 - and the suppliers behind them are quietly reaping substantial profits on a collective path to public listings.

Image source: Internet

FrontStreet Coffee Recommendation

The same forces shaping the market also shape what ends up in your cup. Sweetness, in particular, has become a defining target for roasters, and FrontStreet Costa Rica Black Honey shows how far it can be pushed. Costa Rica is famous for honey processing - the fruit is floated and sorted, the skin and pulp are stripped away, and the beans are sun-dried still coated in mucilage. Because that mucilage is loaded with sugar, it oxidizes and darkens as it dries, and black honey, which retains the most mucilage, ferments the deepest and tastes the sweetest. This high-altitude single-origin bean carries floral and fruity notes, so a medium-light roast suits it best, revealing sweet florals, grape, sweet orange, and liqueur chocolate in the cup.

For a heavier, more traditional kind of sweetness, FrontStreet Brazil Queen Estate brings a medium roast with the aroma of roasted peanuts and dark chocolate, a bitterness that fades into a gentle, lingering sweetness - an excellent sign of good aftertaste. Pulled through a moka pot or espresso machine, it delivers fine crema and a thick, mellow body, making both Americanos and lattes especially rich and sweet. And for a bright, layered option, FrontStreet Strawberry Candy Geisha Blend combines Costa Rican honey-processed coffee with Ethiopian beans to build notes of rose, strawberry gummy, and dried blueberry, with balanced grape and citrus acidity and an almond-scented finish.