Few Coffee Brands Can Resist Selling Alcohol! Luckin Coffee is No Exception!

Luckin Coffee Joins the Alcoholic Beverage Industry

Following Starbucks, Seesaw, M Stand... now Luckin Coffee is entering the alcohol business too! According to the Tianyancha app, on November 8th Luckin established a new company in Xiamen — Luckin (Xiamen) Catering Co., Ltd., with legal representative Lu Xiaojie and registered capital of 10 million yuan. Its business scope covers catering services; food sales; alcohol operations; and online food sales, among others. The company is 100% owned by Luckin Coffee (China) Co., Ltd.

Public records show Luckin Coffee (China) Co., Ltd. was established on March 28, 2018, with legal representative Guo Jinyi and registered capital of 1.625 billion US dollars. Its scope includes catering services; food sales; online publication sales; publication retail; and construction engineering. Wholly owned by Luckin Coffee (Hong Kong) Limited, it currently holds 62 external investment enterprises, including Luckin Coffee Information Technology (Xiamen) Co., Ltd.

Luckin's move into alcohol hardly looks impulsive. As early as April 11th this year, Luckin Coffee (China) Co., Ltd. began applying for a series of "Luckin Ouqi" trademarks, with international classifications spanning beer and beverages, convenience foods, and food products — all now showing as registered. "Ouqi," for the record, is internet slang for wealth or good fortune.

Coffee Brands Enter the Alcohol Market

Crossover into alcohol is no longer rare in the beverage industry. In April 2019, Starbucks — the world's largest coffee chain — opened China's first Starbucks Reserve Coffee Bar, Bar Mixato, serving alcoholic drinks and pioneering the coffee-plus-bar model there. Alongside coffee, the bar pours wines, craft beers, aperitifs, and classic cocktails.

Starbucks has since opened multiple Bar Mixato locations across the country — Beijing, Shanghai, Chengdu, Wuhan, and more. Clearly, bars have been folded into the brand as a new business format.

Last year, the chain Seesaw opened its first "Good Idea Hub" day-coffee-night-alcohol experience store in Shanghai. M Stand, another Shanghai-born chain, is pursuing the same concept, currently running five day-coffee-night-alcohol themed stores across Shanghai, Shenzhen, and Ningbo.

Even Cotti Coffee — the new venture from Luckin's former chairman Lu Zhengyao — sells more than coffee. It plans an all-day dining concept: coffee and Italian biscuits in the morning, meals at noon, snacks in the afternoon, and alcoholic drinks in the evening.

Other Beverage Brands Enter the Alcohol Market

Coffee isn't alone. In June 2021, Coca-Cola Beverage (Shanghai) Co., Ltd. announced on its official Weibo "Coca-Cola China": "We've started selling alcohol" — billed as the company's breakthrough entry into China's alcoholic beverage market.

Soon after, Genki Forest and Beijing Guanyun Technology Co., Ltd. (associated with Guanyun Baijiu) underwent ownership changes, with Genki Forest (Beijing) Food Technology Group Co., Ltd. added as a new shareholder holding 25.8%. The registered capital rose from 11.0733 million yuan to 13.0539 million yuan — an increase of roughly 17.89%.

Tianyancha data shows that as of October 2022, 1.1 million new alcohol-related enterprises had been registered nationwide that year, with the full-year total expected to surpass last year's and set a new growth record.

From 2012 to 2021, companies with "alcohol" in their name or scope registered 6.22 million new establishments over the decade — an average of more than 620,000 per year, or nearly 1,700 per day.

Challenges of Cross-Industry Alcohol Sales

Whatever the brand, selling alcohol across industries is genuinely hard. Well-known companies draw scrutiny with every move: entering alcohol makes headlines, and so does exiting it. Has Luckin truly prepared for this foray?

Image source: Internet

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