Why Does Luckin Coffee Need a Second Roasting Plant?
Luckin Coffee signed an agreement with the Kunshan Development Zone on May 10 to build a second roasting facility, after its Fujian Pingnan plant. The new site is expected to roast 30,000 tons of coffee beans a year. Luckin Coffee Food (Jiangsu) Co., Ltd. was established on May 27 with registered capital of USD 40 million.
The plant is an independent investment of roughly RMB 1 billion and combines coffee R&D, roasting production and a sales center. It eases capacity pressure as sales climb and fits Kunshan's push to build a full coffee industry chain base. Its specialty soe coffee beans line has also raised brand awareness of coffee professionalism.
After successfully turning itself around and achieving rapid expansion, Luckin Coffee is continuing to ramp up its supply chain buildout. Following the commissioning of its Fujian Pingnan roasting plant, Luckin chose to set up a second roasting facility in Kunshan, Jiangsu, with an expected annual roasting capacity of 30,000 tons, and plans to pursue globalization as its goal within the next one to three years. The new plant will be independently invested in by Luckin at approximately RMB 1 billion, integrating coffee R&D, roasting production, and a sales center into one. This layout not only relieves capacity pressure but also aligns with Kunshan's trend of building a full coffee industry chain base.
Luckin Coffee's self-rescue and rapid growth in recent years should be evident to everyone. Its marketing team is quite sharp—it seized on consumers' pursuit of novel flavors, set the beverage market ablaze with its coconut latte, and also made the brand image deeply rooted in people's minds.
Beyond flavor innovation, Luckin has also ventured into the specialty coffee SOE series, letting more ordinary consumers come into contact with the concept of "specialty coffee" while raising awareness of the brand's coffee professionalism.
As sales continued to climb and brand trust kept rising, capacity at Luckin's roasting plant began to run tight. Relying solely on the plant in Pingnan, Fujian, if it continues to expand outward in the future, production efficiency may struggle to keep up.
Therefore, since last year, Luckin began planning the site selection for a new plant, intending to build a second coffee roasting facility. After a year of on-site inspections in multiple cities, it finally settled on Kunshan, Jiangsu.
On May 10, Luckin Coffee held a "cloud signing" ceremony with the Kunshan Development Zone. Luckin Coffee Food (Jiangsu) Co., Ltd. will build the Luckin Coffee Kunshan roasting plant in this development zone, integrating coffee R&D, roasting production, and a sales center into one. A relevant person in charge revealed that after the plant is put into operation, its annual coffee bean roasting volume is expected to reach 30,000 tons.
On May 27, Luckin Coffee Food (Jiangsu) Co., Ltd. was officially established, with registered capital of USD 40 million, legal representative Xia Wei, and a business scope including food sales, import and export of goods, domestic trade agency, and more. Shareholder information shows that the company is wholly owned by Luckin Coffee Roasting Factory (Hong Kong) Co., Ltd.
This is another major coffee industry project to land in the Kunshan Development Zone, following Starbucks China's "Coffee Innovation Park" two years ago. Luckin chose this location because Kunshan is making every effort to build a full industry chain base integrating coffee production, R&D, brand sales, platform trading, and logistics distribution. Given this trend, more coffee brands are expected to set up plants here in the coming years.
The person in charge of Luckin Coffee Food (Jiangsu) Co., Ltd. said that after the new roasting plant is completed and put into operation, it will supply the domestic market with fresher, safer, and pollution-free high-quality coffee bean raw materials. It is expected that within the next one to three years, Luckin will aim for global development, strengthen its brand strategy, build a refined global supply chain, deepen technological innovation and talent and informatization strategies, and be committed to creating a world-class coffee brand originating from China.
Luckin's roasting plant in Pingnan, Fujian, was jointly built by Louis Dreyfus Company (LDC) and Luckin Coffee, with a total investment of RMB 210 million and an area of 45,000 square meters. The plant was officially put into operation on April 18, 2021, with an annual coffee bean roasting capacity of up to 15,000 tons.
The new roasting plant in Kunshan, however, is independently invested in by Luckin Coffee, with a total investment of approximately RMB 1 billion. It is expected to be officially put into operation in 2024, and its annual roasting volume will be twice that of the Pingnan plant. At the same time, it will combine coffee R&D and a sales center into a "three-in-one" format, with a floor area expected to be 1.5 to 2 times that of the Pingnan plant. It may also, like the Starbucks Shanghai Roastery, allow consumers to intuitively see the coffee roasting production process.
Image source: Internet
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The above content is compiled by CoffeeHunters, a coffee news website.
