"Coffee-Only" Coffee Shops Rushing to Diversify? The Need for Multi-Faceted Café Operations

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Have you ever noticed the changes in coffee shop operations over the past two decades?

In 1997, UCC Coffee entered mainland China, sparking a trend in coffee shop operations. UCC's entry pioneered the first generation of coffee shop business model: "coffee + light meals." By providing Chinese-style meals that people were most familiar with, they gradually guided the public to focus on coffee.

However, the heavy-flavored meals seemed to dominate, so when Starbucks entered mainland China in 1999, they eliminated these heavy-flavored light meals and replaced them with sandwiches, bread, and other light foods. This introduced Western dining habits, positioned coffee as a sophisticated, premium beverage, and formed the second generation of coffee shop business model.

The second-generation coffee shop business model persisted in mainland China for over a decade and became a reference template for many subsequent coffee shops. It wasn't until after 2015, when specialty coffee culture swept through, that many coffee shops began pursuing a purer coffee culture. Increasingly, coffee shops adopted a coffee-only model, forming the third generation of coffee shop business model—the specialty coffee shop.

When this business model first emerged, some questioned whether such a pure approach—selling only coffee without light meals or desserts—could survive in the market. At that time, many coffee shops and coffee brands were full of confidence in this specialty model... However, eight years later, everyone seems to have returned to the essence of coffee shops, gradually forming the fourth generation of coffee shop business model: specialty coffee + light meals.

Why, after all this evolution, have coffee shop operations returned to the first generation? Because the needs of mainstream consumers have never changed. All beverage consumption is something people consider only after satisfying their hunger. In fact, observing coffee shop business models nationwide and even globally, successful coffee shops with good reputations are invariably those with diversified operations. Of course, there are single-operation coffee shops that achieve great success, but they represent a very small percentage and are typically concentrated in central areas of major cities.

For smaller cities, coffee is merely another beverage for mainstream consumers. To attract customers to choose their brand among numerous beverage options, diversified operations become extremely important.

A few days ago, an article mentioned that many coffee shop owners in Shanghai are discussing how to modify their business scope, change licenses, and other topics, hoping to transform from coffee-only establishments into coffee + light meals + alcohol venues, creating a model that can operate throughout all hours. Some netizens believe that coffee-only shops can survive because more and more people are embracing purity, so why not continue to persist? Others think that for coffee-only shops, survival is luck, failure is fate, so compromising with reality is the correct choice. In today's market oversaturated with single-operation coffee shops, operators are once again considering how to provide more choices to attract consumers to their brand.

The English word "café" originally meant "Community Access For Everyone"—creating a space where people gather and communicate is the original meaning of a coffee shop.

People who come to coffee shops might be seeking specialty coffee, might need coffee beverages, might need food, or might need the ambiance... Only by satisfying more customers' needs can there be more long-term development. In today's fiercely competitive market, people are gradually understanding that how to survive, how to more quickly build good reputation and loyal customers for the brand and coffee shop, is what matters most. Image source: Internet

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