The Current State of Fresh Ground Coffee Market: New-Style Tea Brands Enter the Coffee Race

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The New Tea Beverage Market Competition

Today's new tea beverage market competition has long expanded from within the industry to beyond. New tea brands entering the coffee market no longer seems surprising. First, ChaYanYueSe launched its coffee brand and opened 5 coffee stores simultaneously. Later, HeyTea entered the boutique coffee chain Seesaw and Minority Coffee.

Recently, the coffee chain brand Monster Tired, which has been circulating on social platforms, announced that it has completed millions of yuan in angel round financing, with the investor being Nayuki, which has the same market positioning. As early as the end of 2020, Nayuki launched a new store format "Nayuki PRO" and introduced 7 boutique coffees, which meant that Nayuki had officially begun to layout its coffee business since then. In September this year, Nayuki invested in AOKKA Coffee and opened its first offline coffee store in the first Nayuki Life store.

However, when it comes to new tea brands crossing over into the coffee market, CoCo都可 can be considered the "pioneer" among new tea brands entering the coffee track. As early as 2014, it had already cooperated with coffee service organizations to begin laying out its coffee business, and in January 2015, it opened its first coffee store at Shanghai's Wujiaochang Fudan University, focusing on affordable and reasonably priced creative coffee.

Since then, major brands have successively entered the coffee market. New tea beverages seem to be staging a cross-border battle with coffee, which is becoming increasingly fierce. Mixue Ice City & Tea, Shuyi Xiancao Coffee, 7FenSweet, and other tea brands have all launched their own coffee products and brands. In August this year, ChaYanYueSe's newly launched coffee brand "YuanYang Coffee" opened its first 5 stores, officially entering the coffee market.

However, long before ChaYanYueSe entered the coffee category, Mixue Ice City had established the brand "Lucky Coffee" primarily in its headquarters of Henan Province, focusing on attacking the coffee market and officially opening franchise operations. HeyTea had also launched its own coffee products on the menu as early as 2020. In 2020, it also collaborated with boutique coffee brand %ARABICA to hold multiple joint pop-up stores in Shanghai and Guangzhou, further integrating milk tea and coffee elements. In July 2021, HeyTea invested in boutique coffee brand Seesaw Coffee, and in June this year, it also invested in Minority Coffee.

Coffee Market Growth Data

According to data from iiMedia Research, in 2021, China's coffee market size was approximately 381.7 billion yuan, and it is expected to reach 485.6 billion yuan in 2022, with consumers exceeding 300 million. At the same time, China's coffee market size is expected to rise at a growth rate of 27.2%, far higher than the global average growth rate of 2%. It is projected that China's market size will reach 1 trillion yuan by 2025.

Against this backdrop, more and more cross-border players are entering the market. Tianyancha App shows that from 2020 to 2022, the number of companies cross-border entering the coffee track has climbed significantly, from 2 cases in 2020 to more than 10 cases in 2022. Cross-border enterprises come from all walks of life. In addition to catering enterprises, they include large enterprises such as China Railway and China Post. Their joint participation has contributed to the popularity of the coffee track. As of mid-November, the number of financing rounds for coffee brands in 2022 reached 13, accounting for nearly 80% of the total financing for the entire coffee track.

New Tea Brands Entering Coffee Market

For some fiercely competitive new tea brands, entering the coffee brand market may play a greater role in occupying the coffee market and brand promotion. Industry insiders say that whether it's to seize a first-mover advantage early in the coffee track or to find a second growth curve, entering the coffee market has become an "optimal choice" for new tea brands. Coupled with the current booming and rapid development prospects of the coffee track, numerous potential consumer groups exist, and the coffee market still has a high ceiling. New tea brands are naturally trying to get a share of this "pie."

The entry of new tea brands not only provides ideas for coffee product innovation and marketing strategies but more importantly, they have already accumulated sufficient strong experience and advantages in standardized operations of tea stores, large-scale expansion, and supply chain integration. How new tea brands will drive the coffee market, let's wait and see!

Image source: Internet

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