Why Industrial Coffee Suppliers Are the Quiet Winners

While Heytea, Nayuki, Starbucks and Luckin compete on collaborations, new products and price cuts, the suppliers behind them are heading to public markets. Companies including Jiahe Foods, Sanyuan Biology, Tianye Shares, Hengxin Life and Dexin Foods are lining up for IPOs, selling sweeteners, juice, cups and syrup to brands such as Uni-President, Mixue Bingcheng, Genki Forest and Luckin.

Jiahe Foods, founded in 2001, is one of the earliest consumer suppliers to list, serving CoCo, Guming and Mixue Bingcheng. Sanyuan Biology has produced erythritol since 2007, with Genki Forest as its largest customer, and also supplies Heytea. Fruit juice and packaging suppliers profit the same way. In a crowded market, the industrial coffee supply chain captures steady margin as terminal brands fight over consumers.

While Heytea, Nayuki, Starbucks, and Luckin are fiercely battling in the consumer market—rolling out collaborations, new products, and price cuts in turn—it is actually the ingredient and packaging suppliers behind them that are quietly making a fortune. From Jiahe Foods to Sanyuan Biology, from Tianye Shares to Hengxin Life, and on to Dexin Foods, a group of new-style beverage supply chain companies is collectively sprinting toward the capital market. They serve well-known brands such as Uni-President, Xiangpiaopiao, CoCo都可, Mixue Bingcheng, Genki Forest, Nayuki, and Luckin, achieving soaring performance through products like sugar substitutes, fruit juice, paper cups, and syrup. This article will outline the listing landscape of these low-key suppliers and reveal the real path to riches for upstream companies amid the new consumption wave.

As ordinary consumers, we are long accustomed to watching coffee and milk tea brands compete with one another—collaborations, new launches, price cuts, a constant stream of news that also adds plenty of conversation fodder to daily life. Names like Heytea, Nayuki, Starbucks, and Luckin are deeply ingrained in people's minds, yet the suppliers behind them rarely receive attention.

Since last year, a number of suppliers to new-style tea and coffee brands have been rushing toward IPOs, including Hengxin Life, Tianye Shares, Jiahe Foods, Baoli Foods, and Sanyuan Biology, all queuing up to enter the capital market.

Founded in 2001, Jiahe Foods is one of the earliest consumer suppliers to go public. Its major clients include well-known beverage companies such as Uni-President and Xiangpiaopiao, as well as new-style tea brands like CoCo都可, Shanghai Auntie, Guming, and Mixue Bingcheng.

Close on its heels is Sanyuan Biology. Ordinary consumers may be unfamiliar with this name. Since 2007, the company has focused on the industrial production of erythritol—a sugar substitute mainly used as a bulking sweetener in food and beverages. According to Sanyuan Biology's prospectus, Genki Forest is its largest customer, and it also supplies erythritol to the new tea giant Heytea.

In addition to sugar substitute companies, fruit juice ingredient suppliers have also profited handsomely from the explosive rise of new-style tea.

Founded in 2007, Tianye Shares offers products including raw material juice, quick-frozen fruit chunks, and fresh fruit. The company was listed on the New Third Board in 2015, but at that time it was still on the eve of the new consumption boom. By 2020, more and more new-style tea brands appeared on Tianye Shares' customer list, with Nayuki becoming its second-largest customer. In 2021, just four brands—Nayuki, Chabaidao, Yidian Dian, and Shanghai Auntie—contributed 56.49% of its operating revenue.

In May this year, Hengxin Life submitted a prospectus to apply for listing on the ChiNext board, planning to raise 828 million yuan. Many consumers may be quite unfamiliar with this company, but the brands everyone knows—Luckin Coffee, Staples, Amazon, Heytea, Starbucks, Yihetang, McDonald's, Dicos, Mixue Bingcheng, Manner Coffee, Burger King, CoCo都可 Tea, Guming, DQ—all use the paper and plastic tableware provided by this company. In 2021 alone, Hengxin Life's annual revenue reached 719 million yuan, selling as many as 2.1 billion paper cups and plastic cups.

On July 6, Dexin Foods disclosed its prospectus, planning to list on the main board of the Shenzhen Stock Exchange. Dexin Foods' main products include beverage concentrates and flavored syrups, and it is one of the ingredient suppliers for coffee and tea brands such as Luckin Coffee, Starbucks, and Nayuki.

The rapid development of new-style tea has driven the rapid growth of upstream suppliers. Soaring performance has pushed these companies to accelerate their entry into the capital market. Nayuki cries out for recouping its investment, Heytea hovers at the threshold of listing, and new consumer brands face red ocean competition in the consumer market—yet the suppliers behind them are raking in profits and embarking on a collective path to listing.

Image source: Internet

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