Why does Luckin Coffee destroy unsold co-branding packaging?

A Luckin Coffee employee posted photos of a store destroying leftover co-branded packaging overnight, with bins full of unused cup sleeves and takeaway cups. Staff say stores must cut up and discard remaining campaign materials under surveillance before each new co-branding launch, a rule that drew criticism over waste and environmental impact.

People familiar with the matter say the destruction may be required by the licensing period granted by the co-branding partner, since continued use after expiry could trigger breach-of-contract compensation. The episode highlights a wider materials management and intellectual property compliance dilemma as co-branding campaigns multiply across the specialty coffee sector.

Recently, a Luckin employee posted on social media images of a store destroying co-branded packaging overnight, with trash bins full of unopened cup sleeves and takeaway cups, quickly sparking discussions among netizens about waste and environmental protection. According to the employee, on the eve of the end of each co-branding campaign, stores must cut up and destroy remaining materials under surveillance, including items such as the red panda keychains from a previous Chengdu Tourism co-branding. Some netizens compared this with Cotti Coffee's approach, arguing that continuing to use expired packaging materials both reduces waste and surprises customers; others with knowledge of the matter pointed out that the destruction may be forced by the licensing period granted by the co-branding partner, and using them beyond the period could lead to breach-of-contract compensation. Behind this controversy lies the dilemma of materials management and intellectual property compliance amid the co-branding boom.

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Recently, a Luckin Coffee employee posted a daily record on social media, attracting a large number of netizens to watch and discuss.

Judging from the post and the attached photos, the employee was handling paper bags, cup sleeves and takeaway cups left over from the brand's previous co-branding campaign with intangible cultural heritage. For many frontline Luckin employees, such a scene may not be unfamiliar, but the trash bin stuffed full of cup sleeves and cups still made many users uncomfortable, and they left comments saying "too wasteful" and "not environmentally friendly at all."

According to the employee's description, on the night before every switch to a new co-branding campaign, Luckin stores must destroy and discard all remaining packaging materials and merchandise from the previous campaign under surveillance cameras. For example, with the limited-edition merchandise from the brand's previous co-branding with Chengdu Tourism, on the closing night of the campaign, some staff threw unsold red panda keychains, badges and the like straight into the trash.

The discarding of co-branding materials this time was the same. Many employees reported that even if these packaging materials designed for the campaign theme had never been unwrapped, according to the company's rigid requirements they could only cut a slit in the takeaway cups and cup sleeves with scissors to make them unusable, and then throw them into garbage bags.

Regarding Luckin's practice of disposing of expired co-branding materials, many netizens found it unreasonable. They mentioned that Cotti, which also frequently collaborates with popular IPs, has no similar rule, and most stores continue using stock packaging materials after a co-branding campaign ends until these expired materials are completely used up.

In users' view, allowing stores to continue using expired materials not only avoids waste but also brings customers a little surprise. Some customers said they found it both interesting and unexpected to receive limited-edition packaging from three different IPs, and thought the store was making the best use of what it had.

In addition, many people thought that since stores have so much stockpiled limited-edition packaging, they could simply give it to customers who want it before the campaign ends, or place it in a prominent spot in the store for customers to take themselves, which would both speed up material consumption and win consumer goodwill.

However, netizens familiar with the inner workings of co-branding pointed out that the reason Luckin forces stores to destroy expired co-branding materials is very likely a requirement from the co-branding partner.

They explained that co-branding collaborations between brands mostly involve issues such as intellectual property and portrait rights. Generally speaking, the co-branded party authorizes the merchant to use character images, brand logos and other elements during the campaign period. Once the authorization period agreed by both parties is exceeded, if offline stores continue using campaign limited-edition packaging materials, the brand may have to pay breach-of-contract compensation for violating the agreement.

Therefore, many people said that rather than letting stores continue using expired materials at the risk of breach of contract, it is better to destroy them directly. They said bluntly that although the destruction scene shared by employees does look very wasteful, "the amount of compensation for infringement is much more than this cup."

Image source: Xiaohongshu

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