Can Grid Coffee compete in the specialty coffee market?

Yuanfudao's parent company has opened its first Grid Coffee store at the Yintai in88 Mall on Wangfujing Street in Beijing. The brand positions itself as specialty coffee with two lines, classic coffee and pour-over, across 21 SKUs priced mostly from 25 to 30 yuan.

Within 48 hours of its soft opening it sold 1,068 cups, more than 800 of them pour-overs. The company behind it, Beijing Single Origin Coffee Co., Ltd., was registered on December 31, 2021. Competition near Taikoo Li Sanlitun includes Starbucks, %Arabica, and Peet's.

The parent company of education giant Yuanfudao has officially entered the coffee industry. Grid Coffee, wholly owned by the company, has opened its first store at the Yintai in88 Mall on Wangfujing Street in Beijing. Positioned as a specialty coffee brand, it focuses on two main series—classic coffee and pour-over—with prices mostly ranging from 25 to 30 yuan. Within 48 hours of its soft opening, it sold 1,068 cups of coffee, more than 800 of which were pour-overs—an impressive result. However, facing strong rivals around Taikoo Li Sanlitun such as Starbucks, %Arabica, and Peet's, as well as an increasingly fierce competitive landscape in China's coffee market, whether this crossover player from the education sector can successfully transform itself remains to be tested by the market. Front Street Coffee will continue to follow this crossover development.

In recent years, crossing into the coffee sector from other industries has gradually become a trend. Not long ago, the coffee market gained yet another crossover participant from the education industry.

On September 9, a Grid Coffee store located inside the Yintai in88 Mall on Wangfujing Street in Beijing officially made its debut. According to related media reports, the store is currently still in a soft-opening state. The Grid Coffee brand is wholly owned by Beijing Single Origin Coffee Co., Ltd., an affiliated enterprise under Yuanfudao's parent company. This company was registered on December 31, 2021, and most of its management members also come from Yuanfudao's founding team.

Judging purely from the store design, Yuanfudao's first coffee shop adopts a style leaning toward the internet-famous aesthetic, using a highly eye-catching dark green grid element as its brand identity.

From the menu information on Dianping, it can be seen that Grid Coffee positions itself as specialty coffee, mainly covering two major categories—classic coffee and pour-over coffee—with a total of 21 SKUs, mostly priced between 25 yuan and 30 yuan.

Specifically, the classic coffee series is divided into black coffee and milk coffee, priced from 23 yuan to 32 yuan; the pour-over coffee series includes some single-origin coffee beans. Based on differences in roast level and flavor, Grid Coffee has launched a total of 8 pour-over single-origin offerings, priced mainly between 25 yuan and 31 yuan.

As early as August this year, the brand team had already opened a pop-up store near its first location. According to information posted on the Grid Coffee WeChat official account, this attempt produced unexpectedly good results: within the first 48 hours of the soft opening, a total of 1,068 cups of coffee were sold, including more than 800 cups of pour-over coffee.

It should be noted that as of September 9, Grid Coffee had already opened two stores, respectively located in Wangfujing and Sanlitun; in addition, two more stores are in the preparation stage for opening.

In fact, creating a coffee brand and opening stores is not Yuanfudao's first crossover attempt. In 2020, traffic competition among education and training institutions reached a fever pitch; after the "double reduction" policy was officially implemented in 2021, Yuanfudao gradually faded from public view. With the opening of its first coffee store, however, the Yuanfudao brand has returned to people's sight.

Actually, as early as last October, the matter of "Yuanfudao crossing over to sell down jackets" had already sparked widespread discussion. At the time, Yuanfudao responded that Bingyuan Apparel was a consumer company newly invested and established by the group's parent company, operated by an independent team, and unrelated to Yuanfudao's education business.

Regarding the relationship between the coffee brand and Yuanfudao, a Grid Coffee staff member once said in a media interview: "We are an independent coffee brand." This shows that Yuanfudao's transformation adopts a dual-track strategy: on one hand, it continues its original education business; on the other, it advances into the consumer market.

The scale of China's coffee market is continuing to grow, but even so, even if Grid Coffee has caught this ride of development, it still has to face quite fierce competition. Within the Taikoo Li Sanlitun mall alone, its competitors include well-known brands such as Starbucks, %Arabica, and Peet's, not to mention other players across the entire area.

As one of the former giants of the education and training industry, whether Yuanfudao can succeed in its crossover transformation and create greater commercial value still remains to be further observed.

Image source: Internet

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