Why Sports Brands Keep Crossing Into Coffee

Xtep (China) Co., Ltd. has applied to register three Te Coffee trademarks and three XTEP COFFEE trademarks, covering catering and accommodation, convenience foods, and advertising and sales, per Qichacha records. The filings follow Li-Ning's Ning Coffee launch, making the sportswear maker the latest non-food company to stake a claim in the coffee market.

Cross-industry moves into coffee have become routine. As of August this year, the coffee industry recorded 14 financing events in 2022, and entrants span tea beverage chains, traditional Chinese medicine brands, education companies, and tech giants. Tea and catering firms were the earliest group, with Qu Xiaomian affiliate Tongue Technology also filing for COTTI and COTTI COFFEE marks.

Following Li-Ning's launch of Ning Coffee, another sporting goods company has begun to stake out a position in the coffee market. Information from Qichacha shows that Xtep (China) Co., Ltd. has applied to register multiple coffee-related trademarks, covering categories such as catering and accommodation, convenience foods, and advertising and sales. In recent years, from tea beverage brands to time-honored traditional Chinese medicine brands, and on to education companies and tech giants, there has been an endless stream of cross-industry forays into coffee. Is Xtep's move this time a continuation of its idea of innovating the in-store experience, or is it intended to open up an entirely new business territory? This article will sort through Xtep's coffee layout moves and review typical cases in recent years of brands from various industries crossing into coffee.

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Brands across industries have expanded into innovative businesses through cross-industry coffee ventures, again and again breaking past the boundaries of consumers' imaginations, and now the coffee sector has gained another cross-industry contender from the sports industry.

According to recent search results on the Qichacha App, Xtep (China) Co., Ltd. has already submitted registration applications for 3 "特咖啡" trademarks and 3 "XTEP COFFEE" trademarks. The international classifications involved include catering and accommodation, convenience foods, and advertising and sales. At present, these trademarks are all in the application and registration stage.

Statistics show that as of August this year, the coffee industry saw a total of 14 financing events in 2022. More and more companies are crossing industry boundaries and pouring into the coffee track, and this phenomenon of cross-industry coffee operations seems to have become commonplace.

The earliest group of cross-industry players were catering and tea beverage companies. For example, Tongue Technology (Beijing) Co., Ltd., an affiliate of Qu Xiaomian, also submitted registration applications for multiple "COTTI" and "COTTI COFFEE" trademarks. In the tea beverage sector, brands such as Heytea, Naixue Tea, CoCo, Mixue Bingcheng, and Chayan Yuese have also successively launched their own coffee products or coffee sub-brands.

Later, even century-old traditional Chinese medicine brands joined the ranks of opening coffee shops. Tongrentang launched "Punk Wellness Coffee." As a time-honored traditional Chinese medicine brand with more than 300 years of history, Tongrentang's cross-industry move this time was described as both "bold" and "innovative." Extending from a pharmacy to a coffee shop appears on the surface to be a cross-industry experiment, but behind it are also competitive pressures and development demands.

Cross-industry cases have also appeared in the education sector. Grid Coffee, a coffee brand invested in by the parent company of Yuanfudao Group, has already entered a trial operation phase with its first store in Beijing Wangfujing. On the sports enterprise side, Li-Ning previously launched the cross-industry "Ning Coffee."

It is fair to say that Li-Ning can be regarded as the "veteran" of this wave of sports brands making coffee. In April this year, Li-Ning applied for the "Ning Coffee NING COFFEE" trademark. During the May Day holiday, when Li-Ning's first store in Xiamen opened, Ning Coffee appeared at the same time, though it adopted a "bundled distribution" model, offering it only as a gift rather than selling it externally. Customers who spent 499 yuan or more in the store could receive a free cup of Ning Coffee. This move looked quite sincere, but some netizens joked, "500 for one cup, I can't afford to drink it."

So far, Ning Coffee has appeared one after another in multiple Li-Ning stores in Xiamen, Guangdong, Beijing, and other places, with a product line covering nine drinks, including Raw Coconut Latte, Classic Ning Americano, Classic Ning Latte, and South African Oat Latte.

Li-Ning told the media, "We hope to enhance customers' comfort and experience while shopping by optimizing in-store service. Providing coffee service in stores will be an innovative attempt by Li-Ning targeting the consumer experience link at retail terminals."

In addition, Huawei Technologies Co., Ltd. also applied in May this year to register the trademark "A Cup of Coffee Absorbs Cosmic Energy"; Post Coffee, backed by China Post, has also begun trial operation... Judging from past cases, most major brands doing cross-industry coffee rely on their store advantages to strengthen their appeal to young consumer groups and attempt to break fixed consumer perceptions.

As a newly entered player, Xtep, this physical retail giant, has in fact already made moves in the coffee sector. In July this year, the official WeChat public account "Pu'er Tea Coffee" of the Pu'er Tea and Coffee Industry Development Center published a post titled "A Coffee Shop in the Space Museum! Manya Coffee Xtep Store Will Open on July 16," which introduced the cross-industry cooperation between the Pu'er Xtep children's store and Manya Coffee.

The reason major brands are currently eager to rush into the coffee track is that making coffee is similar to opening milk tea shops in the past couple of years—the barrier to entry is not especially high, the supply chain system is already mature, and service providers can offer a full set of equipment and product solutions to help merchants quickly achieve standardized operations. However, standing out in an increasingly competitive coffee market is no easy task. Whether Xtep, a brand enterprise whose main business is clothing, shoes, and hats, can grow into a "rising star" on the coffee track remains to be seen by consumers.

Image source: Internet

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