Can the new flavor win word of mouth?

There are more and more signs that the number of new entrants in the capital-sought-after coffee track is increasing, and in September this year, Xtep (China) Co.
, Ltd.
applied to register three "special coffee" trademarks
.
Previously, Li Ning Sports (Shanghai) Co.
, Ltd.
applied for the registration of the trademark
"NING COFFEE".
On Xiaohongshu, China Post's "Postal Coffee" related notes are as high as 6,000, "Tongrentang Coffee" has received more than 2,400 notes, and when "Taier Sauerkraut Coffee" was launched, the number of Weibo topic views surged.
.
.
A few days ago, iMedia Consulting released the "2022-2023 China Coffee Industry Development and Consumer Demand Big Data Monitoring Report" shows that the coffee track seems to have become the first choice for brand cross-border at present, and consumers have mixed
praise and criticism.

Multi-brand cross-border coffee products out of the circle

From China Post to Xtep, the coffee track seems to have become the first choice
for brands to cross borders.
It is not surprising
that enterprises and capital operate coffee across borders.
Previously, tea brands including Heytea, Naixue's Tea, CoCo, Mixue Ice City, etc.
have long launched their own coffee products, and in August this year, the newly launched coffee brand "Yuanyang Coffee" also opened in
Changsha, Hunan Province.

The cross-border layout of tea and coffee is also quite suitable, and in the eyes of consumers, it is nothing more than adding another category
from the main business.

However, since the beginning of this year, the first post office coffee of China Post has landed in Xiamen, Fujian, and then Li Ning has launched "Ning Coffee"
across borders.
Even fog core technology, which sells electronic cigarettes, has opened a "awakening ON" coffee shop, and Neiliansheng, a long-established brand selling shoes, has also opened a café
in Beijing.

There are also cross-border players who challenge consumers' taste buds and like to innovate
in the coffee category.
Taiji Sauerkraut Fish announced the launch of a brand new product
called "Sauerkraut Coffee" at the end of August this year.
It is understood that the official name of this product is "original sauerkraut latte", and there is really sauerkraut juice in the coffee, and a large stick of sauerkraut
will be included.
Those who like sauerkraut fish and coffee are silent, and many netizens said they can't accept it
.

There is more than one
such strange coffee.
Previously, Tongrentang established a sub-brand Zhima Health, playing the slogan of "punk health" for young people, and launched coffee with traditional Chinese medicine health concepts such as goji berry latte, tangerine peel hawthorn American style, monk fruit American style, and tangerine peel hand punch, it seems that even the goji berries in beer are not so special
.

But fresh is fresh, and consumers are not so much bought by the "big stew" coffee
.
According to the public review "Zhima Health", the number of its stores is only eight in Beijing and Hangzhou, of which seven stores are in Beijing
.

The market scale of 100 billion yuan has entered the fast lane

Why are more and more businesses starting to set up a coffee track? In recent years, coffee, as an imported product, has become a fashion in China and is sought after by consumers
.
Data show that the market size of China's coffee industry will reach 381.
7 billion yuan in 2021 and is expected to reach 485.
6 billion yuan
in 2022.
With the change of public dietary concepts, China's coffee market is entering a stage of rapid development, the rise of new brands is faster, it is expected that the coffee industry will maintain a growth rate of 27.
2%, and the size of the Chinese market will reach 1,000 billion yuan
in 2025.

China's coffee market is huge, growing rapidly, and the competitive landscape is beginning to change, and cost-effective coffee brands and specialty coffee brands are gradually seizing market share
.

With the increase of coffee brand awareness, consumers' loyalty to coffee brands has gradually increased
.
According to the survey data, nearly 60% of the surveyed consumers will buy different flavors of the same brand of coffee, and only 12.
7% of the surveyed consumers will buy the same flavored products
of different brands.

At present, most of China's coffee consumers are concentrated in first- and second-tier cities, accounting for more than seventy percent
of the total consumer groups.
However, in first- and second-tier cities, coffee shops are blooming everywhere, and coffee brands must not only maintain the original customer source, but also prevent customers from turning to the embrace of new tea drinks, after all, in user portraits, coffee and new tea labels are very similar - "youth", "first- and second-tier cities" and "middle and high income"
.

With the development of China's economy, the consumption level of third- and fourth-tier cities continues to increase, the number of cafes has gradually increased, the future coffee market will gradually shift to third- and fourth-tier cities, third- and fourth-tier cities "small town youth" become coffee consumption potential stocks, with the awakening of coffee consumption awareness of relevant groups, the coffee consumption market in third- and fourth-tier cities needs to be further explored, and the sinking market gives brands the opportunity to create a new brand matrix
.
In this regard, iMedia suggested that coffee companies customize new categories for customer groups and establish deep links with consumers in the sinking market; Expand new scenarios and enrich the life fragments of sinking users to increase market share
.

How crossover players can get a head start

The coffee market in first- and second-tier cities is gradually becoming saturated, competition is slowly entering a white-hot stage, and the sinking market of the third and fourth tiers has brought unlimited opportunities
to coffee companies.
At present, brands such as Starbucks and Luckin have begun to sink into third- and fourth-tier cities, and have begun to open more stores and launch affordable coffee to attract potential consumers
.
The cross-border players with capital advantages have chosen first-tier cities to explore the market
.

So, in the face of such a competitive coffee market, why do cross-border companies choose to enter the market?

According to Li Ning, who officially entered the coffee track, opening "NING COFFEE" is to improve the comfort and experience of customers when shopping by optimizing in-store services
.
Providing coffee service in the store will be an innovative attempt
by Li Ning for the consumer experience of retail terminals.

It is not only Li Ning who has such ideas, but also clothing brands such as Arket and Ralph Lauren, which have previously cross-border coffee layout, and their brands do coffee business not to open the coffee business, but to complete brand marketing
through coffee.

National fashion brands such as Li Ning and Xtep have just completed their brand transformation and urgently need to further expand their young consumer groups, and the coffee business has become an important carrier
.

For the new youth group that has become the main consumer force, cross-border seems to be a very interesting thing, and brands that have observed this phenomenon have catered to it, IP co-branding, cross-border cooperation, "circle for alliance", social media grass, private domain operation, etc.
have become important means for
brands to guide this group.

Unlike brands such as Li Ning who laid out coffee business to expand consumption scenarios, China Post and "Ape Counseling" chose to list
the coffee business separately.
Post office coffee is a new thing at first glance, suitable for dissemination on social media, it is easier to obtain consumers' sense of novelty, and thanks to the social nature of coffee shops, more consumers are willing to bring three or five friends to check in
.

But cross-border is not easy, cross-border is just a marketing innovation, mainly plays a role in attracting attention, but consumers will not always pay for curiosity, "temporary Internet celebrity" is difficult to provide long-term support
for brand building.

According to the survey data, liking the taste of coffee is the main factor for the surveyed consumers to drink coffee, accounting for 54.
4%.

It can be seen that consumers still pay attention to the quality of
coffee products.
In addition, more and more companies pay attention to store design and consumer experience, and the overlapping factors of "cross-border" and "co-branding" can certainly make consumers get a better experience, but to ensure customer retention, we must start with coffee quality
.

Consumers in the first-line market still have a lot of room for development, and it is the main battlefield for major brand competition, which is also destined to have many brands participate in the layout
.
The tonality of the new tea brand is largely in line with coffee users, and the customer group has natural advantages, which is also the starting point
for tea brands to enter the coffee market.
It remains to be seen
whether the cross-border entry of brands such as China Post, Sinopec and Tongrentang is a vane for consumption upgrading, or whether it is cross-border and short-lived.

(Luo Chen comprehensive arrangement)

China Food News (October 31, 2022 Version 07)

(Editor: Luo Chen)