Is coffee a refreshment in China's ready-to-drink market?

Want Want Group's Bond brand has launched a bottled ready-to-drink coffee priced at 3.5 yuan, deepening the company's long presence in the category since it first entered the ready-to-drink coffee market in 1998. The low-price push targets post-pandemic growth in China's coffee market, where local brands keep appearing and competition is intense.

Most Chinese coffee consumers still treat coffee mainly as a refreshment, without settled preferences on flavor or culture, and convenience and speed now shape buying decisions. Millennials and Gen Z dominate consumption, so Bond leans on health positioning, convenience, and esports marketing. Whether a low price alone can break through is the open question.

Want Want Group has made another move in the coffee sector, with its Bond brand launching a bottled ready-to-drink coffee priced at just 3.5 yuan. From being the first to enter the ready-to-drink coffee market in 1998 to now attracting consumers with a low-price strategy, Want Want has been continuously deepening its presence in the coffee arena. Against the backdrop of rapid post-pandemic coffee market growth and an endless stream of local brands, Bond Coffee is trying to carve out a place in the fiercely competitive market through strategies such as health-oriented positioning, convenience, and esports marketing. Front Street Coffee will also continue to follow these developments and bring coffee lovers more industry insights.

When people mention Want Want Group, the first thing that comes to many minds may be that classic commercial scene—Li Ziming from Class 6, Grade 3, with his mother holding two cans of Want Want Milk in her hands. But now, Want Want is brewing more new initiatives in the coffee segment, and its Bond Coffee brand has launched a ready-to-drink coffee product priced at only 3.5 yuan.

China's coffee market is undergoing a phase of rapid growth. Before the pandemic, the larger domestic coffee brands were represented by Starbucks, Nestlé, Luckin, and others. After the pandemic, as remote work became more widespread, consumer demand for coffee continued to rise, and a group of local coffee brands such as MANNER COFFEE,隅田川, and Saturnbird rose one after another, while coffee categories became increasingly diverse. From the once-common 3-in-1 instant mixes to today's drip bags and premium instant coffee powder, these changes all reflect that Chinese consumers' demand for coffee has entered an era of rapid development.

Millennials and Gen Z young people have become the main force in market consumption. Among them, most millennials have already become white-collar workers in office buildings; among Gen Z, one-third have reached adulthood and nearly a quarter have entered high school, and this generation is successively stepping into society and starting their careers. At present, most Chinese coffee consumers' understanding of coffee still remains at the level of refreshment, and they have not yet formed specific needs or awareness regarding flavor and culture.

In addition, convenience and speed have become a new trend in coffee consumption. Even though cafés like Starbucks rely on the "third space" to attract customers, more stores present a grab-and-go model. Compared with offline cafés, ready-to-drink coffee has lower requirements in terms of assets and costs and can fit into various consumption scenarios. The Bond brand is also quite good at getting close to the younger generation. As early as 2019, it targeted the then-hot esports field, increasing exposure in esports circles so that more consumers became aware of this ready-to-drink coffee brand.

According to data released by China Food Network, the market size of China's ready-to-drink coffee reached 14.9 billion yuan in 2021, and it is expected that by 2022, the growth rate of the global ready-to-drink coffee market will exceed that of bottled water and soft drinks.

Want Want Group's involvement in the coffee business can be traced back to the last century. The Bond brand launched latte coffee in 1998 and was one of the earliest brands to enter China's ready-to-drink coffee market. In 2017, Bond launched 240 ml canned iced coffee and latte; in 2020, it launched caramel macchiato and mocha in both 240 ml cans and 145 ml mini packs; in 2021, it launched 125 ml boxed light milk latte and light black coffee, as well as 250 ml bottled light milk latte; in 2022, Bond Coffee launched two new flavors in its light milk series—light milk caramel and light milk mocha.

During a period when the costs of coffee and milk tea were rising, major coffee brands and tea beverage brands raised prices one after another, while Want Want Bond Coffee's low price of 3.5 yuan naturally attracted consumers' attention. In addition, after the pandemic occurred, people became more inclined to choose foods with stronger health attributes, and products labeled low-sugar, low-calorie, and low-fat were more sought after by the public. Want Want Bond also seized this opportunity and launched its light milk series, which likewise carries a "healthy" label, reducing ingredients that have negative health effects, such as excess fat and trans fatty acids, while also making the taste more refreshing.

After being combined with milk, syrup, and other auxiliary ingredients, coffee's original bitterness is greatly weakened, turning it into a bottle of dairy product with a roasted coffee aroma, making coffee products easier for the public to accept. When the consumer budget is relatively limited, among the healthier coffee products available for choice, Bond Coffee at 3.5 yuan a bottle has its own advantages.

Ready-to-drink coffee and freshly ground coffee both belong to the coffee category. Although ready-to-drink coffee is inferior to freshly ground coffee in flavor, in scenarios where only a refreshing effect is needed, the price of ready-to-drink coffee is only about one-fifth that of freshly ground coffee. At present, Chinese coffee consumers' understanding of coffee flavor and coffee culture is not yet deep, and the ready-to-drink coffee market has huge potential. Even the functional beverage brand Dongpeng Special Drink has joined the competition in ready-to-drink coffee, and brands such as Nongfu and Vitasoy have also successively entered the ready-to-drink coffee field.

After reading this, do you think Want Want Bond Coffee at 3.5 yuan a bottle is appealing?

Image source: Internet

Video: Tencent Video (Want Want commercial)

The above content is compiled by CoffeeHunters, a coffee news website.