Tea and coffee can meet people's physiological needs for caffeine intake and certain social space needs. The difference between business model and marketing method is not enough to become a competitive barrier between them, and mutual imitation and reference sometimes occur. For consumers in the mainland market, tea drinking habits are more deeply rooted, people are wider, the primary market is bigger, and the degree of product innovation is higher. Taste, innovation speed and even incidental social attributes are the core factors that determine the demand of these two optional consumer goods, and milk tea and coffee shops also penetrate each other in categories.
As we have always emphasized, ready-made drinks are a low-threshold and high-iterative industry, and the core of competition will eventually fall on the level of product strength and brand strength of product construction. The innovation of business model and the change of marketing mode can quickly give birth to new brands in the short term, but in the long run, consumers are still pursuing good products.
We have resumed the succession of the coffee industry, and believe that the main factors to promote the industrial transformation are product strength, supply-side innovation and gradually meeting the demand-side differentiated consumption goals.
Based on the ratio of coffee consumption to per capita disposable income, the number of cups converted by specific consumption intention, and the establishment of coffee-to-tea substitution rate based on the constant total caffeine consumption, the scale of China's freshly ground coffee industry is measured in multiple dimensions. It is estimated that the freshly ground coffee will reach150-500 billion yuan. With the rapid expansion of the number of coffee shops, the consumption habits will accelerate.
We assume that the per capita coffee consumption in Chinese mainland reaches the level of Hong Kong, Taiwan, the United States and Japan to measure the market size of this industry.
The calculation logic is:
1, calculate the per capita consumption amount by the per capita consumption quantity and the average price of a single cup;
2. Expenditure ratio = per capita consumption amount/per capita disposable income;
3. Assuming that the mainland will also reach the proportion of expenditure in various places in the future, the conversion coefficient for each city is:
4. Calculate the per capita consumption amount through the ratio of per capita disposable income and expenditure in each city;
5. Calculate the number of drinks consumed per capita by assuming the price of a single cup of drinks in each city;
6. According to the urban population and per capita consumption, the proportion of coffee expenditure in disposable income in Hongkong, Taiwan Province Province, the United States and Japan is 1. 1%, 0.6%, 1.9% and 1.9% respectively. We believe that the development of these four markets well explains the different stages that the mainland market may experience in the future.
In terms of living habits and cultural traditions, Hongkong, Taiwan Province and Japan are all similar to Chinese mainland. In the past, they mainly drank tea.
However, in the last 20 years, the living habits of consumers in the three markets have evolved in different directions. Desktop milk tea, represented by bubble tea, appeared in Taiwan Province Province, which revived milk tea. Therefore, the development of coffee drinking habits of consumers in Taiwan Province Province is relatively backward.
Although Hong Kong-style milk tea appeared in Hong Kong a long time ago, with the increase of globalization and the gradual aging of the original Hong Kong-style milk tea categories, coffee drinking habits have gradually developed. As the country with the highest degree of westernization in Asia, Japan has no new product form to give new vitality to the tea market, so its coffee consumption habits are close to mainstream markets such as the United States.
Starbucks latte, the mainstream product in the freshly ground coffee consumption market, is selected. Based on the difference between Starbucks pricing level and consumers' psychological expectation pricing, a conversion coefficient of 0.5 is set (that is, half of Starbucks pricing is taken as the average price of freshly ground coffee in this area), and the market price of a single cup in the reference area is converted into a reasonable value.
The disposable income level of first-and second-tier cities is relatively high.
According to Wind's classification standard for cities in each line, we calculated the per capita disposable income of cities in each line (including all urban and rural residents).
According to estimates, the per capita disposable income of first-tier cities (Beishangguangshen and Shenzhen) and second-tier cities reached 60,640 yuan/year and 37,663 yuan/year respectively, far higher than the national average of 28,228 yuan/year.
First-and second-tier cities are suitable for developing ready-to-drink and have demonstration effects, so there are many brands of ready-to-drink products.
Start with first-and second-tier cities. Existing beverage brands, such as Starbucks, Ruixing, Lotus Coffee, Hi Tea, Naixue Tea, Lele Tea, etc. All of them are from first-and second-tier cities.
On the one hand, considering consumers' sufficient purchasing power and fast pace of life, the demand for fresh tea is stronger.
On the other hand, because both entertainment and optional consumer goods have a migration curve from high-tier cities to low-tier cities, that is, the time machine theory put forward by Sun Zhengyi, the fashion and living habits of big cities will gradually shift to low-tier cities with the increase of income level.
Re-open the development process of hi-tea, 20 17, hi-tea mixed (hi-tea hot wheat), hi-tea black (hi-tea black gold shop), hi-tea powder shop, hi-tea day dreamer plan and other shop forms. Originated from loving tea and loving tea, provincial capitals are basically used as flagship stores to establish brand image.1
According to the development path of Starbucks' expansion in American cities in the early 1990s, it gradually expanded from big cities such as San Diego, Boston, new york and Houston to small cities, instead of gradually filling and exploring new areas after entering new areas.
The core of this ready-to-drink development model lies in the high demand for the influence of ready-to-drink brands, rather than digging deep into supply chain efficiency and human coordination to improve operational efficiency.
Considering the existence of time machine effect, the life rhythm of each line city is slightly different, so we adopt different conversion coefficient assumptions for each line city.
Taking the per capita expenditure ratio of Hong Kong as an example, assuming that the per capita coffee expenditure ratio of first-tier, second-tier, third-tier, fourth-tier and below cities can reach 80%, 70%, 60% and 50% of the coffee expenditure ratio of Hong Kong respectively, the average annual coffee expenditure of each city is 522 yuan, 283.5 yuan, 199 yuan and 82 yuan respectively.
According to the population and per capita consumption of each city, we calculated the potential market size of coffee industry in each city. The per capita coffee expenditure of urban residents in the first, second, third and fourth tier and below accounts for 80%, 70%, 60% and 50% of disposable income respectively.
For Taiwan Province Province, China, which has the closest habit of drinking tea, we think that the market size of coffee industry in Chinese mainland can be conservatively estimated to be about 65.438+0.40 billion, and the space is 654.38+0-2 times.
The non-alcoholic beverage market in China can be divided into tea, coffee and other beverages.
According to the retail consumption value, the non-alcoholic beverage market in China has increased from 900.7 billion yuan in 20 15 to12,01600 million yuan in 20 19.
Driven by the increase of disposable income and continuous product innovation, the non-alcoholic beverage market in China is expected to grow from 1 134 billion yuan in 2020 to1856.7 billion yuan in 2025, with a compound annual growth rate of 10.4%.
Coffee shops have a large space and a big tap (Starbucks), but China has a stronger habit of drinking tea, and the tea market is much bigger than coffee. Under the background of the rise of new tea brands in China, the gap is widening.
Tea includes finished tea and other tea products such as tea, tea bags, tea powder, instant tea and so on.
Naixue's tea prospectus shows that according to the retail consumption value by 2020, tea accounts for more than 35% of China's non-alcoholic beverage market, and the total size of China's tea market has increased from 256.9 billion yuan in 20 15 to 4 107 billion yuan in 2020, with a compound annual growth rate of 9.8%. Among them, the store new tea113.6 billion, and the compound growth rate will reach 24.5% in the next five years.
In terms of retail consumption value, China's coffee market will reach 65.5 billion yuan in 2020, accounting for 5.8% of the total non-alcoholic beverage market in China in the same period, and it is expected to grow to 65.438+447 billion yuan in 2025, most of which will be contributed by freshly ground coffee. In FY 2022, the number of Starbucks stores in China is expected to reach 5,000.
Tea is a traditional drink in China culture. In 1980s, foam tea was born in Taiwan Province Province. Black tea was mixed with creamer to make milk tea, and the famous snack powder source in Taiwan Province Province was added.
Around 20 15, a new tea was born. With the diversification of tastes and the introduction of more ingredients, the overall quality of milk tea has been improved. New tea refers to a Chinese drink made of high-quality natural ingredients such as high-quality tea, fresh milk and fresh fruit, combined with more diversified tea bases and ingredients. New tea stimulates the rapid growth of China tea market.
By 2020, about 60% of the total consumption of ready-made tea market in China will come from ready-made tea shops, which can be divided into three categories according to the average selling price of tea drinks:
(a) high-grade ready-made tea shops (ASP is not lower than 20 yuan, such as hi tea, Naixue tea and Lele tea).
(2) Mid-range ready-made tea shops (ASP is between 65,438+00 yuan and 20 yuan, such as Modern China Tea Shop, coco, Diandian, Gu Ming and Happy Lemon).
(3) Low-end ready-made tea shops (ASP is less than 10 yuan, such as Mi Xue Bing Cheng). The total consumption value of fresh tea products in high-end fresh tea shops in China increased from 800 million yuan in 20 15 to 129 billion yuan in 2020, with a compound annual growth rate of 75.8%.
It is estimated that the compound annual growth rate of 32.2% will further expand to 52.2 billion yuan in 2025.
From 2020 to 2025, according to the consumption value of existing tea, the growth rate of high-end existing tea shops is expected to continue to exceed the average growth rate of other existing tea shops, accounting for about 24.8% of the total consumption value of existing tea in existing tea shops in 2025.
By September 30, 2020, there were about 340,000 ready-made tea shops in China, and the average selling price of ready-made tea was 13 yuan, among which there were about 3,200 high-end ready-made tea shops (accounting for 9.4%), and the average selling price was not lower than that of 20 yuan, of which 2,400 were chain brands (defined as stores with more than 1 shop nationwide). The format of high-end ready-made tea shops is relatively concentrated. By September 30, 2020, according to the retail consumption value, the market share of the five major market participants * * * accounted for more than 50%, hi tea accounted for about 25.5%, and Naixue accounted for about 17.7%.
According to the prospectus of Naixue, as of September 30th, 2020, Naixue has the widest coverage among high-end ready-made teas in China, with the highest ASP, reaching 43.3 yuan per order, while the industry average ticket price is 35 yuan.
Among the existing tea drinks, the high-end is the form of basic tea and fresh fruit, represented by hi tea and Naixue, and the prices of fresh tea, fresh milk, fresh cheese, fresh fruit and fresh fruit are above 20 yuan.
Xicha and Naixue have relatively high product barriers because of the high cost of raw materials and high pricing, at the cost of "reducing gross profit margin and increasing management difficulty".
Mid-range is a desktop milk tea with a high degree of standardization, mainly made of COCO and a little bit, with more tea bags and milk powder and less fresh fruit. The price is 8- 15 yuan. It has entered the stage of joining and expanding, which is a choice for large base groups.
At the low end, powdered milk tea is mainly distributed in the sinking market, mainly in the honey snow ice city. With the expansion of joining, there are tens of thousands of shops in the sinking market.
However, it is precisely because the market business is sinking and the market requires low pricing, so it is decentralized in the form of joining.
The target consumers have decided that the tea of brands such as Mi Xue Bing Cheng is weak in viscosity, which is the demand for instant drinking. Products are difficult to distinguish, but large-scale can not enhance consumers' brand awareness.
In other words, Mi Xue Ice City competes with other low-end brands in the form of joining.
According to the "2020 New Tea Research Report" jointly issued by China Chain Store & Franchise Association and Ali New Service Research Center, the existing tea can be divided into three stages from the perspective of product development.
Chain tea drinking period (before 20 15): The existing tea drinks developed rapidly, and many national chain brands were born, including Happy Lemon, COCO and Little Point.
During the period of 1.0 (20 15, 20 19), the consumption of chain tea was upgraded: the typical feature was that fresh fruits, dairy products, grass and other ingredients were added to the drinks, which emphasized the value of the drinks and made them look good and delicious. The new concept of tea was born, including hi tea, Naixue tea and other brands. At the same time, more diverse consumption scenes (Naixue tavern, Naixue DreamWorks, Xicha Laboratory Store, Xicha Hot Wheat Store and Lele Tea Factory) appeared, which extended the consumption time.
The upgrading period of chain tea consumption is 2.0 (from 2020): the tea market segment is further developed on a large scale, and the head tea brands are distributed in second-and third-tier cities; From product innovation to product diversification (drinks, baked goods, retail products) and digital channels (small programs are more convenient to place orders, online retail platforms), in addition to the further expansion of head brands in high-end tea drinks, brands such as Xicha and Naixue are gradually standardized and copied in different places.
According to the White Paper on New Tea in 2020 published by Naixue Tea and CBNData, the number of new tea consumers will officially exceed 300 million in 2020. More than 80% of new tea consumers buy at least once a week, and 80% of consumers have high brand loyalty. From the perspective of consumer groups, the post-90 s and post-00 s account for nearly 70% of the market, and the proportion of male consumers has increased. In 2020, more than 40% new tea consumers will be men.
Takeaway will expand the service scope of the store to an area within 2-5 kilometers. The retail consumption value of ready-made tea products sold in all terminals (namely, third-party platforms, WeChat and Alipay applets and self-operated applications) will increase from 700 million yuan in 20 15 to 28.4 billion yuan in 2020, with a compound annual growth rate of 107.6%, accounting for about the retail consumption of ready-made tea products in China in 2020. It is estimated that the compound annual growth rate of 3 1.8% will further expand to 1 129 billion yuan in 2025.
The entry threshold of tea industry is low and the competition is fierce. In 2020, under the influence of the epidemic, head brands will accelerate the opening of stores, and the market concentration will be further enhanced. From 2020 to the last feasible date of the prospectus, Naixue opened 189 stores.
According to the company's public data, as of June 5438+February, 2020, the number of newly opened stores in Naixue increased by 20% compared with the same period last year, and the number of newly opened stores in Xicha increased by 3 1% compared with the same period last year.
Head brand optimizes services and products, and is committed to digitalization and new retail. Since 2020, the degree of online digitization has increased. Digitalization is reflected in the formation of a digital team, digital information drives product innovation and optimization, and relies on big data site selection to improve efficiency.
With the help of digital tools, the new tea party can get customer feedback in a short time, and optimize and adjust the products, or launch new products in the current season.
The refined operation of members can improve the stickiness and repurchase rate of users. Tea enterprises collect user data and opinions through pre-purchase, point redemption and exclusive price evaluation channels to optimize the user experience. At the same time, set customized tastes through your own small programs or apps, and refine and precipitate user data.
Naixue Tea launched its membership system in September 2009+2065438. As of the latest feasible date, the number of registered members is 29.2 million. By September 30, 2020, about 49.4% of Naixue's orders came from members, and the total number of active members increased from 2 million in Q4 of 20 19 to 5.8 million in Q4 of 2020. By the fourth quarter of 2020, 29.8% of the active users are re-purchasing members (25.6% in the fourth quarter of 20 19).
Brand strength is reflected in retail products and peripheral products. In February 2020, Naixue's tea Tmall flagship store was launched. In March 2020, Xicha Tmall flagship store was launched, and in July 2020, Xicha JD.COM self-operated flagship store was launched.
New tea brands put retail products, snacks, soft drinks and tea retail gift boxes on the shelves to broaden consumption scenarios.
The consumption scene of coffee is working days, and new tea itself is social and leisure (mostly in shopping malls, with better passenger flow on weekends and holidays, while Starbucks is mainly in CBD area in China, with better working days). For example, the peak time of tea consumption in the whole day is from 2 pm to 4 pm, and the peak time of ordering food in a week is weekend/Thursday/Friday. With the penetration of Naixue pro store and Tea Go store into the CBD area, and the expansion of sales scope to baking, coffee (like tea providing American and latte), packaged water and snacks, and even wine, the consumption time and scenes are expanded, and the working scenes are increased, from afternoon tea to breakfast and overtime nights.
The retail consumption value of cross-selling goods in high-end ready-made tea shops in China is expected to increase from about 2.2 billion RMB in 2020 to 654.38+0.0 1 billion RMB in 2025, with a compound annual growth rate of 35.4%.
Naixue's seven new stores will become specialty stores. Instead of the existing baking, the central chef/supplier will uniformly distribute baking products, make small shops, mainly focus on tea, locate high-flow areas, such as high-end shopping centers, office buildings and residential centers, integrate coffee/baking/tea/retail, and intelligently arrange equipment to improve operational efficiency;
Judging from the ticket price, Naixue is obviously higher than the first-tier cities (48 yuan vs.43 yuan) in second-tier and below cities. According to the calculation that 73% of the income is tea and 27 yuan has one cup, second-tier cities and below have 1.7- 1.8 cups of tea per order, which is significantly higher than that of first-tier cities. In addition, luxury and tonality, petty bourgeoisie decoration, wider storefronts and mild and bright light. Naixue's encrypted stores in the first/new line may be different from those below the second line, focusing on different store types, providing fast and accessible tea shops for busy working groups and providing social "third space" for areas with longer leisure time and lower rent.
The star single product effect is obvious. By September 30, 2020, Naixue's three best-selling teas were domineering cheese strawberry, domineering orange and domineering cheese grape.
The total contribution to the existing tea sales is 25.3%. The annual sales champion of Xicha for many years is succulent grapes. Xicha small bottles continue the brand potential of Xicha, mainly bottled sugar-free soda, and the most popular taste is grape flavor.
The brand of head-made tea strengthens the emotional connection with consumers through cultural output, and transmits the brand culture. Nai Xue invited different artists to present their works of art on the teacups through the Cup Art Museum, conveying the idea that Nai Xue is full of art of life, and conveying the idea of beauty and self-strength through public welfare activities and joint names in 2020.
Head brand attaches great importance to brand maintenance. Xicha was originally named Imperial Tea. Due to the increasing number of counterfeit shops, the founder officially changed the name of "royaltea Royal Tea" to "HEYTEA Hi Tea" on 20 16, and personally wrote letters to consumers to explain the brand story and continue to carry out anti-counterfeiting rights protection.
Head brand is the export standard of the industry. Before 20 19, there was no unified industry standard for tea industry. On June 9, 2020 165438+ 10/kloc-0, China Chain Store & Franchise Association, together with new tea brands such as Naixue and Xicha, formally established the CCFA New Tea Committee and established the new tea industry standard.
Ready-made drinks need good products+good models.
Good products-stable taste+high frequency, stable taste needs standardized production process and staff training, and every McDonald's coffee machine should concentrate on learning and assessment; The new frequency needs R&D investment. Starbucks has a new frequency of 1.5 weeks, Naixue has a new frequency of 1.2 weeks on average.
A good model-having brand power to talk about rent, low dependence on manpower, having the financial resources to build a baking factory on raw materials, or having a stable upstream order.
Head brand uses its own scale advantage to promote the standardization and scale development of supply chain, and at the same time, deeply cultivate and control the upstream of supply chain to ensure the supply of high-quality raw materials, thus ensuring the stability and unity of product taste.
In order to ensure the taste of the beverage, Xicha began to develop its own strawberry varieties in 2020. On the one hand, cultivate and develop new strawberry varieties, on the other hand, choose the most suitable area and build your own strawberry base.
At the same time, Xicha selected high-quality teas from Guizhou, Yunnan, Guangxi and Taiwan Province provinces, and finally produced classic teas such as Luyan, Jinfeng and Sijichun. And the production of organic tea in Guizhou's self-built organic tea garden.
Naixue set foot in the supply chain from the beginning, built his own tea garden, orchard, garden and central factory, developed his own supply chain system, digitized the whole process from supplier to production, automatically matched the best materials for stores, and realized the integration of store and warehouse inventory management.
(1) mode: comparison between single restaurant mode and single tea shop mode.
Where is the tea business?
1. Small shop+fast turnover, low trial and error cost, high floor efficiency (manpower is saved after the order is digitized).
2. Gross profit is not lower than catering, the supply chain is simpler (especially the scale increases the number of suppliers), the most difficult thing is fruit, others are bulk trade goods, and the supply of fruit is also being optimized;
3. Weaken chefs, get started faster after systematic training, and the store is better standardized. There are customized cheese machines and tea makers for liking tea; At present, tea making, sugar pulling, cheese beating and fruit cutting are gradually replaced by machines/suppliers.
4. Consumption scenarios are more diverse. A major pain point and consumption of food enterprises are mainly concentrated in the afternoon market and evening market, but tea can extend the consumption scene to breakfast, afternoon tea and even midnight snack, further improving the efficiency of the dining table.
5. Fashionable westernization and petty bourgeoisie are attractive to young people, attracting better employees and younger customers;
6. Strong compatibility (+baking+retail are all good formats)
(B) the embodiment of brand tension, sinking space
Naixue's prospectus shows that in 18-20, the daily sales of second-tier cities exceeded those of first-tier cities and new first-tier cities unaffected by the epidemic, indicating that second-tier cities are not inferior to first-tier cities in terms of optional consumption ability of petty bourgeoisie fashion attributes, and in 2020, under the influence of the epidemic, first-tier cities showed greater resilience.
By the third quarter of 2020, the average daily sales of first-tier cities/new first-tier cities/second-tier cities/other cities will decrease by 6300/9200/20200/65438+9400 respectively compared with the same period of last year.
The growth rate of new tea shops in first-and second-tier cities has slowed down, showing a trend of sinking to third-and fourth-tier cities.
According to the White Paper on New Tea in 2020, among the leisure dining formats of 50,000 square meters shopping centers in first-and second-tier cities nationwide, new tea brands account for 25%, and the number of stores opened accounts for 3 1%. With the increase of the penetration rate of new tea in shopping centers, brands began to try to open stores in CBD or community.
With the slowdown in the growth rate of new tea shops in first-and second-tier cities, the proportion has dropped significantly, showing a trend of sinking to third-and fourth-tier cities; Consumers in first-and second-tier cities are the main consumers of online new retail products, accounting for more than 60% of consumers.
Food safety risks, the epidemic has repeatedly brought about a reduction in eating out, brand aging, and the sinking of new stores is less than expected.
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Author: Huachuang Securities King
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