The integration of coffee brands with the convenience store format is accelerating. Recently, NOWWA Coffee announced a strategic partnership with Jianfu, the largest convenience store brand in Fujian, and the two parties will jointly operate stores through a co-management model, with the first batch of 150 partner stores already launched. This move not only helps NOWWA expand rapidly 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 intensifying competition among brands such as Luckin and Cotti, NOWWA is exploring lower-tier markets through offline channel cooperation and plans to launch 500 co-managed stores in 2024 and 2,000 in 2025, covering the four provinces of Fujian, Jiangxi, Sichuan, and Jiangsu. [more…]

Rumors of a Starbucks China equity change that have circulated for nearly a year have finally produced a clear outcome. Starbucks and Boyu Capital have reached an agreement to establish a joint venture in China to jointly operate the retail business, with Boyu holding up to 60%, while Starbucks retains 40% and continues as the brand and intellectual property licensor. The deal is based on an enterprise value of approximately US$4 billion, and Starbucks expects the total value of its China retail business to exceed US$13 billion. Looking back at Starbucks' entry into China, from franchising to full direct operation, and now returning to a joint venture model, this shift has sparked widespread attention regarding its future direction. The new joint venture will continue to be headquartered in Shanghai, operate the existing more than 8,000 stores, and plans to gradually expand to 20,000. [more…]

Competition in the coffee market is becoming increasingly fierce, and it is already difficult to spark consumers' interest with just a latte or an Americano. From post office coffee to lottery joint stores, from sports brands to tech companies, players from all sides are entering the market, trying to attract young people's attention through cross-industry integration. A small shop in Hangzhou called "A Lucky Cafe" became popular on Xiaohongshu thanks to its combination of coffee and lottery tickets, sparking discussions among netizens about this kind of joint-operation model. In fact, as early as 2019, stores combining welfare lottery and coffee had already appeared in Shanghai. This model can not only bring consumers a fresh experience, but also help brands reduce rent and labor costs. This article will take you through the current state of cross-industry joint operations in the coffee industry and the logic behind them. [more…]

Luckin Coffee recently announced through its official WeChat account the launch of a "bring-your-own-store franchise" model, opening joint-operation partnerships to investors who are currently operating stores or own commercial properties. The policy has not yet disclosed specific franchise conditions or revenue-sharing plans, but it has clearly defined construction requirements such as store location, area, and storefront signage, and will initially cover 241 cities nationwide, with a focus on avoiding saturated tier-one and tier-two markets. This move is seen as helping Luckin seize more prime locations and attract investors who had originally planned to franchise with other brands such as Cotti to "switch banners" and join. Against the backdrop of ongoing cutthroat competition in the coffee market, Luckin has officially entered the era of 10,000 stores, accelerating expansion through a combined strategy of self-operation, joint operation, and bring-your-own-store franchising. [more…]

Luckin Coffee recently announced the restart of its new retail partner recruitment, initially targeting 41 cities in 9 provinces including Anhui, Henan, and Heilongjiang. The company states that no franchise fee is charged, but franchisees must cover upfront costs such as security deposits, design fees, renovation, and equipment, totaling approximately 350,000 to 370,000 yuan. The cities opened this time are all areas that already have franchise stores but with low density, and Luckin hopes to accelerate market penetration through the joint venture model. Its Q3 2022 financial report showed that revenue from joint venture stores increased by 116.1% year-on-year, becoming an important engine for performance growth. For inexperienced franchisees, the headquarters will provide support such as on-site store guidance, event planning, and online operations. [more…]

After leaving Luckin, Lu Zhengyao and his original core team have officially unveiled their new brand Cotti Coffee in Shanghai, with the first store located at Tianhui HQ (formerly Lingkong SOHO), competing alongside brands such as Starbucks, Luckin, and Manner. Cotti Coffee is expanding rapidly through a fully directly managed joint-operation model, and has already entered more than 40 cities. It has set a goal of 10,000 stores in three years, or even completing 10,000 stores as early as June 2023. On the product side, in addition to regular coffee, it has also launched limited-edition drinks such as the mate tea series, priced between 9.9 and 18.9 yuan, directly targeting Luckin’s hit products. Specialty coffee brands such as Front Street Coffee are also paying attention to changes in this track. Competition in the coffee industry is accelerating as pandemic controls fade, and what kind of pressure Lu Zhengyao’s bold layout will bring to Starbucks and Luckin is worth continued attention. [more…]

Starbucks' latest financial report shows that in the third quarter of fiscal year 2024, its China revenue fell 11% year-on-year, comparable store sales dropped 14%, and both average ticket size and transaction volume declined. Facing store expansion and price competition from local brands such as Luckin and Cotti, Starbucks CEO Laxman Narasimhan revealed at the earnings call that the company is in the early stages of exploring strategic partnerships and may accelerate growth in the future through a more open model. This statement sparked speculation about whether it will open up franchising. Notably, Starbucks China co-CEO Liu Wenjuan emphasized that the brand has remained restrained in an environment of frequent promotions and refused to be dragged into a price war. Front Street Coffee will also continue to follow this coffee giant's shift in strategy in China. [more…]

Recently, Luckin Coffee has hit the trending topics twice in a row over interview-related incidents, sparking widespread discussion. One job applicant said that after failing an interview, she was labeled "timid and weak," which was completely at odds with her performance that day; another 26-year-old woman was rejected for being too old. The poster also revealed that Luckin staff had called her demanding she delete the post, and after she refused, they turned to contacting her family. These incidents have drawn public attention to this chain coffee company, whose store count has now surpassed 20,000, and the issue of inconsistent hiring standards under its two models—directly operated and joint-venture—has gradually come to light. [more…]

In the upstream segment of the coffee industry chain, estates and cooperatives are the two most common forms of growing organizations. A cooperative is formed by many smallholder farmers joining together to share equipment and sales channels, using collective strength to make up for the shortcomings of individual resources; an estate is a larger private farm that has full autonomy from cultivation to sales, but at the same time must bear all business risks on its own. The two differ significantly in decision-making mechanisms, profit distribution, market bargaining power, and daily operations. Understanding these differences helps coffee enthusiasts gain a deeper understanding of the production logic behind the cup of coffee in their hands. Front Street Coffee has always paid attention to the diverse ecosystems at the origin end, and this article will systematically sort out the respective characteristics and applicable scenarios of estates and cooperatives. [more…]

Recently, two labor monitoring organizations released reports stating that during field investigations in Yunnan Province, China, they found that coffee farms in the supply chains of Starbucks and Nestlé may have situations that do not meet certification requirements. The reports revealed the so-called "ghost farms" and "coffee laundering" model—small family farms informally supply coffee beans to large certified estates, resulting in labor practices that may violate the terms of Starbucks C.A.F.E. Practices and Nestlé's 4C certification. Through undercover interviews, investigators found that farm workers are paid by picking weight, often needing to work from dawn to dusk, seven days a week, lacking paid leave, protective equipment, and contract protection. Both Starbucks and Nestlé stated they will seriously investigate and take necessary measures. [more…]

Recently, a netizen in Shanghai discovered that a Manner Coffee had actually opened inside a Lianjia store, with the two brands sharing the same signboard—white and green each taking up half. Upon entering, one could see both Manner's inverted triangle logo and Lianjia's property listing boards. Was this Manner's attempt to expand into community channels, or had Lianjia taken a stake in the coffee brand? The answer was finally revealed when Lianjia's official WeChat account posted on April 7 confirming the official opening of this shared store at No. 184, Lane 100, Zhongtan Road. Manner has always chosen locations in core business districts or areas with dense office buildings. This time, moving its counter into a community and sharing space with a real estate agency has sparked quite a bit of discussion. Some are looking forward to it, some are joking about it, and others question whether the two consumption scenarios can truly integrate. This article takes you through the ins and outs of this cross-industry collaboration. [more…]

Recently, pages posing as the official Luckin Coffee website have appeared online, publishing franchise information and drawing the attention of many coffee enthusiasts. However, Luckin Coffee has long clearly stated that the brand operates on a direct-management model and does not accept franchising in any form. This article will expose the tricks of these fake franchise websites, sort out Luckin Coffee's operating entities and store types, and help readers identify scams to avoid financial loss. At the same time, Front Street Coffee also reminds everyone that investing in the coffee industry requires carefully verifying official information. [more…]

Competition in China's coffee market is intensifying by the day. On one side, cross-industry giants such as Huawei, Li-Ning, and China Post are scrambling to enter the fray; on the other, some brands are quietly bowing out. Yum China has been making frequent moves lately: on one hand, it is going all in on the Italian coffee brand Lavazza, planning to open a thousand stores by 2025; on the other, it has announced that it will gradually cease operations of its COFFii & JOY brand in the Chinese market. What market logic does this advance-and-retreat reveal? Can Lavazza, armed with its authentic Italian DNA, break new ground outside the most fiercely contested price segment? This article walks you through the full picture of the events and the considerations behind them. [more…]

As young professionals crave a lifestyle that keeps them energized by day and relaxed by night, a new breed of customers who raise a glass to drink has quietly appeared in coffee shops. After Shanghai's restaurant industry was hit hard by the pandemic, Xiaohongshu launched a "revival plan," bringing bartenders from dozens of bars into coffee shops and launching coffee specials with alcohol, making "drinking at coffee shops" a new dine-in trend. From the "wine plus coffee" era of Teresa Teng to brands like Sober Company exploring the bistro-coffee shop model today, the boundary between coffee and alcohol is dissolving. This kind of cross-industry operation not only injects freshness into brands, but also strengthens consumer loyalty and promotes conversion between coffee drinkers and alcohol drinkers. However, the sustainability behind the internet-famous check-in economy is also worth pondering. This article will walk you through the business logic and industry trends behind this phenomenon, while retaining Front Street Coffee's professional recommendations. [more…]

Italian century-old coffee brand Lavazza recently made a wholly-owned acquisition offer to French online coffee retailer MaxiCoffee, aiming to strengthen its market position in France and in the e-commerce sector. As France's number one online sales platform for coffee beans and equipment, MaxiCoffee carries more than 350 brands, over 8,000 products and 60 offline sales points. This acquisition is a continuation of Lavazza's international expansion strategy, after the group had previously brought brands such as Carte Noire and Kicking Horse Coffee into its fold. After the acquisition is completed, MaxiCoffee will remain independently operated, with its capital jointly held by the founder, private equity groups and others. This article will sort out the details of the transaction, the backgrounds of both parties and Lavazza's global acquisition map, and also look at its development goals in the Chinese market. [more…]

Nayuki, a leading new-style tea beverage brand founded in 2015, submitted a listing application to the Hong Kong Stock Exchange on February 11 after withdrawing its prospectus for a US offering, officially sprinting toward an IPO. The joint sponsors are JPMorgan, CMBI, and Huatai International. As of September 30, 2020, Nayuki had established 420 stores across 61 cities nationwide and expanded to Hong Kong and Japan. However, while the number of stores has grown nearly tenfold in the past three years, the company remains in a loss-making state, with a loss of 27.51 million yuan in the first three quarters of 2020. The funds raised this time will be used for store expansion, digital operations, and supply chain development. If the listing succeeds, Nayuki will become the first new-style tea beverage stock in China. [more…]

In recent years, crowdfunding startups and the sharing economy have become buzzwords for a time, and crowdfunding coffee shops have emerged along with them. Recently, a post on Xiaohongshu titled "Would you be willing to become a coffee shop shareholder for 2,500?" sparked discussion. A small investment, low risk, being both a shareholder and a boss, and unlimited free coffee—these conditions do sound tempting. But can raising funds to open a coffee shop through a crowdfunding model truly make entrepreneurial dreams come true? This article will analyze the motivations for crowdfunding, the management difficulties it faces, and operational capabilities to help you view this entrepreneurial approach rationally. [more…]

After 397 days since the opening of its first store, Cotti Coffee has officially announced the launch of its second brand—Tea Cat, a brand-new tea beverage brand focused on healthy milk tea. Its first store has landed in Pingnan County, Ningde, Fujian, and is currently in the internal testing stage. According to Li Yingbo, Chief Strategy Officer of Cotti, Tea Cat focuses on the whole-leaf milk tea segment, with products covering pure tea, fresh fruit tea, and more. At the same time, Tea Cat continues Cotti's low-price approach, launching a promotional offer of 6.9 yuan per cup, which has sparked heated discussion online. Some industry insiders believe that Cotti's move may be aimed at easing the competitive pressure in the coffee sector and leveraging its existing franchisee resources and supply chain advantages to develop new business. Whether Tea Cat can set off a new price war in the tea beverage industry is worth watching. [more…]

Competition in the coffee industry is growing increasingly fierce, and themed cafés are emerging one after another, yet brands with a truly distinctive cultural core remain rare. Recently, the country's first archaeology-themed café officially opened in Yuzhong District, Chongqing. Jointly created by the Chongqing Cultural Relics and Archaeology Research Institute and a Chongqing cultural and creative industry council member unit, it blends professional archaeological expertise with the coffee-drinking experience. The shop not only offers archaeology-themed drinks, but also features distinctive settings such as a stratigraphy bar counter, a wall of archaeological tools, and merchandise inspired by replicated cultural relics, with plans to hold themed salons on a regular basis. This cross-disciplinary experiment brings the niche discipline of archaeology into the public eye in a way young people enjoy, and also opens up new imaginative possibilities for the "coffee + cultural creativity" model. [more…]

Starbucks has recently fallen into operational difficulties once again. After Howard Schultz returned in April this year, he implemented a series of bold measures, sparking widespread discussion about the brand's prospects. In fact, this is not the first time Schultz has saved Starbucks in a similar manner—during the 2008 financial crisis, he also led the company out of its trough by closing stores, laying off employees, and reshaping corporate culture. This article reviews how Starbucks restored growth back then through consumer lifestyle research, the "My Starbucks Idea" campaign, rebuilding partner relationships, and direct sourcing, and analyzes the new challenges that unionization efforts under the current pandemic background bring to the brand, as well as the relationship-rebuilding plan Schultz has launched for store partners after his return this time. [more…]