How does a co-managed coffee service model work in stores?

NOWWA Coffee has partnered with Jianfu, the largest convenience store brand in Fujian, to run stores under a co-management model. The first batch of 150 partner stores is already operating. NOWWA plans 500 co-managed stores in 2024 and 2,000 in 2025, covering Fujian, Jiangxi, Sichuan, and Jiangsu, as it seeks lower-tier markets.

NOWWA was founded in June 2019 and now runs more than 1,800 stores across over 160 cities. Through its "coffee+" plan, it shares operations with convenience stores, internet cafes, chain hotels, and bakeries. Sharing an existing site cuts the average startup cost for a coffee shop, since the partner brings supply chain reach and lower operating costs while the brand adds a new category to its floor.

The integration of coffee brands with convenience store formats is accelerating. Recently, NOWWA Coffee announced a strategic partnership with Jianfu, the largest convenience store brand in Fujian. The two parties will jointly operate stores through a co-management model, with the first batch of 150 partner stores already in place. This move not only helps NOWWA rapidly expand by leveraging the convenience store's mature supply chain and low-cost operating advantages, but also adds a new category to the convenience store's diversified operations. Against the backdrop of fierce competition among brands like Luckin and Cotti, NOWWA is exploring lower-tier markets through offline channel cooperation, with plans to open 500 co-managed stores in 2024 and 2,000 in 2025, covering four provinces: Fujian, Jiangxi, Sichuan, and Jiangsu.

Recently, NOWWA Coffee officially announced a strategic partnership with Jianfu Convenience Store. The two parties will carry out joint store operations under a "coffee + convenience store" model, and the first batch of 150 co-managed partner stores is now in operation.

Public information shows that NOWWA Coffee was founded in June 2019, with its founding team coming from senior executives of Ele.me, and is headquartered in Shanghai. As a freshly ground coffee brand, it gained market recognition with low-calorie products and has now established more than 1,800 stores across over 160 cities nationwide.

It is understood that NOWWA Coffee has launched a "coffee+" joint operation plan, aiming to open co-managed stores with partners in different formats such as convenience stores, internet cafes, chain hotels, and bakeries. Under this model, the advantages of both parties can be fully utilized, thereby bringing consumers a more convenient and higher-quality coffee consumption experience.

Public records indicate that Jianfu Convenience Store belongs to Xiamen Jianfu Chain Management Co., Ltd. and is the largest convenience store brand in Fujian Province. In the "National Convenience Store TOP 70" list published by the China Chain Store & Franchise Association in May 2018, Jianfu ranked 14th nationwide and first in Fujian Province with 1,300 stores. At present, its total number of stores is close to 2,000, mainly distributed within Fujian Province, while also having expanded into Jiangxi and Sichuan provinces.

As is well known, for coffee brands, the cost of raw materials such as coffee beans accounts for only a small proportion of total costs, with most operating costs coming from fixed expenditures such as employee salaries, rent, and utilities. This means that if these fixed costs can be effectively reduced, profit improvement will be very obvious. By cooperating with convenience stores, NOWWA Coffee can precisely substantially cut this portion of rigid expenses.

In addition, convenience stores usually have mature supply chain systems and lower operating costs, which allows NOWWA to open new sales points with lower investment while accelerating the speed of investment recovery.

In recent years, the convenience store industry has maintained rapid growth and has become one of the most common business formats. Convenience stores are widely distributed and close to consumers' daily lives, usually with long operating hours and superior locations, and can meet immediate shopping needs.

This convenience provides a good foundation for the diversified operations of convenience stores. In addition to traditional sales of daily necessities and food, convenience stores have continuously entered new areas such as dining and coffee in recent years. By enriching the variety of goods and services, convenience stores can attract a broader consumer group, thereby increasing average transaction value and customer loyalty.

At present, well-known domestic convenience store brands such as 7-Eleven, while providing ready-to-eat food and beverages, have also tried offering freshly ground coffee services in their stores and have received good market feedback. These industry trends indicate that convenience stores operating coffee is completely profitable.

Some market analysts believe that in an environment of increasingly fierce competition in the domestic coffee market, competition among Luckin, Cotti, and NOWWA has entered a white-hot stage. In addition to price wars, expanding into lower-tier markets from multiple dimensions and seeking offline channels are clearly more likely to seize market share.

In this strategic cooperation between NOWWA Coffee and Jianfu, exploring the "coffee+" joint store operation model around convenience store scenarios, it is expected that the two parties will open 500 co-managed stores in 2024 and 2,000 co-managed stores in 2025, covering four provinces: Fujian, Jiangxi, Sichuan, and Jiangsu.

Image source: Internet

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