酱香拿铁之后瑞幸又出新品，咖啡卖酒真是好生意？After the sauce flavored latte, Luckin Coffee has released a new product. Is selling coffee and alcohol really a good business?

A few years ago, Luckin Coffee's launch of sauce flavored latte sparked a heated discussion in the market, becoming the most popular internet celebrity at the time. However, alcoholic beverages disappeared afterwards. Recently, Luckin Coffee is once again focusing on alcoholic beverages. Is selling alcohol as a coffee brand really a good business?

1、 After the sauce flavored latte, Luckin Coffee has released a new alcoholic product

According to a report by Interface News, several netizens recently posted on social media that Luckin Coffee plans to launch multiple alcoholic special drinks such as "Scarlet Moonlight", which has attracted attention.

On May 11th, according to Jiupai Finance, a staff member at a Luckin Beijing store confirmed to reporters that two special alcoholic beverages will indeed be launched on May 18th, which will contain 15 milliliters of alcohol and cannot be sold to minors. In terms of specific production, the salesperson stated that alcohol blending does not require additional equipment, and the overall process has more than ten steps, with a production time of about 3 to 5 minutes. It is reported that this beverage only supports offline self pickup purchase.

Public information shows that the base of "Scarlet Moonlight" is blended with coffee liquid, grapes, lychee, and jasmine tea, with cherry blossoms and jasmine clouds covering the top, and strawberry powder embellishment. It is divided into two versions: alcoholic and non-alcoholic. The alcoholic version contains London Dry Gin with an alcohol content greater than 0.5% vol and is priced at 15.9 yuan/cup.

According to the Terminology and Classification of Beverage Liquor (GB/T 17204) implemented in 2022, beverage liquor can be divided into three categories: fermented liquor (such as beer and wine), distilled liquor (such as Baijiu and whiskey) and formulated liquor. Among them, beverages with an alcohol content exceeding 0.5% vol belong to the category of alcoholic beverages and need to be managed as alcoholic beverages.

This is not the first time Luckin has launched alcoholic beverages. On September 5, 2023, Luckin Coffee and Maotai jointly launched the "Sauce flavored Latte", with a retail price of 38 yuan/cup and a promotional price of 19 yuan/cup. The first day sales of this product exceeded 5.42 million cups, with sales exceeding 100 million yuan, breaking the single product record.

According to the official product introduction, the "Maotai Latte" contains 53 degrees of Kweichow Moutai wine, and the alcohol content is less than 0.5%. The store clerk emphasized that drinking Maotai flavor latte would not affect driving, but those with alcohol allergies should be careful to use it, and this Baijiu flavor thick milk is only for stores, not for sale.

2、 Is it really a good business for coffee brands to sell alcohol?

Recently, Luckin Coffee has been causing trouble again. After winning the championship of sauce flavored latte, Luckin Coffee did not stop its footsteps of "coffee+wine" and once again launched a new product of alcoholic beverages. Many people are asking: Is selling coffee and alcohol really a good business?

Firstly, this is not Luckin's first foray into the alcohol market. Looking back at the heyday of the sauce flavored latte market in the past few years, it can be said to be phenomenal. A cup of coffee priced less than 20 yuan made countless young people who never drink Baijiu taste Moutai for the first time. That wave of marketing not only set a historical high for Luckin Coffee's daily sales, but more importantly, it validated a core hypothesis: the combination of coffee and alcohol has a huge demand in the Chinese market.

The success of sauce flavored latte has laid a very solid foundation for Luckin Coffee's layout in the alcohol market. It addresses two key issues: firstly, are consumers willing to add alcohol to their coffee? The answer is yes, and very yes. Secondly, do consumers buy coffee brands that produce alcohol? The answer is also affirmative, because Luckin's brand tone is inherently youthful and trendy, which naturally aligns with the concept of "slightly tipsy".

So, when Luckin Coffee launches a new alcoholic product again, it's not an adventure, but a "go with the flow" with data support, user base, and brand endorsement. The author has always emphasized that the smartest approach in the business world is not to bet on a new direction every time, but to replicate and magnify already validated models. Luckin Coffee, who has made sauce flavored latte, clearly understands this.

Secondly, selling coffee and alcohol is the key to breaking through time constraints. The penetration rate of the domestic freshly ground coffee industry continues to rise, and the industry as a whole has bid farewell to the high-speed growth period of incremental expansion and entered a mature development stage of stock competition. The density of top brand stores is approaching saturation, and the traffic increment brought by new stores continues to narrow. Industry competition has shifted from "grabbing new users and expanding new stores" to "mining existing value and filling scene gaps". This is the industry situation that all coffee chain brands must face, and it is also the inevitable trend of industry iteration and upgrading.

From the perspective of consumption scenario structure, traditional coffee consumption has strong temporal limitations, forming obvious consumption gaps. For a long time, the core consumption scenarios of coffee have been focused on morning commuting, morning office work, and afternoon tea. It is a typical daytime functional beverage with core values of refreshing, relieving boredom, and adapting to the needs of the workplace and daily life. In the evening and nighttime leisure consumption period, it is almost a vacuum zone for coffee products. A large number of offline stores experience a sharp decline in customer flow during the evening period, and fixed costs such as store rent, equipment wear and tear, and labor costs continue to be consumed, resulting in a serious shortage of resource utilization. For chain coffee brands that heavily rely on store floor space efficiency, the singularity of time periods and scenarios is the core pain point that restricts their profit growth. Therefore, we often see many coffee shops starting to neglect their customers in the afternoon and almost unable to find them at night.

Luckin Coffee's layout of alcoholic coffee is essentially filling the gap in the scene with product innovation, achieving the maximum utilization of store resources around the clock. By relying on the existing network of thousands of offline stores, there is no need to add new venues, restructure the supply chain, or build new teams. With product formula iteration, it is possible to enter the nighttime tipsy consumption track, activate idle store time resources, and significantly improve floor area efficiency and profitability. This light asset, low-cost, and highly adaptable business upgrade model perfectly meets the transformation needs of coffee companies in the existing market and has strong commercial feasibility.

Thirdly, the preference of young people for slight drunkenness is an important root cause. The current market consumption trend is also that young people like to be slightly drunk and do not like high Baijiu, which is also an important window period for coffee enterprises. The current main consumer groups, Generation Z and young white-collar workers, are undergoing profound intergenerational changes in their drinking habits. The traditional business banquets and high Baijiu culture are gradually ebbing away, and are replaced by the pursuit of relaxed, self pleasing and low alcohol "slightly drunk economy". Young people no longer need to socialize by getting drunk, but are more inclined to seek a low burden way to relax after work or on weekends.

The combination of coffee and alcohol precisely hits this consumption pain point. The aroma of coffee can neutralize the spiciness of alcohol, and the addition of alcohol endows coffee with a leisurely and social attribute. This "light alcohol" beverage not only retains the fashion sense of coffee, but also meets the needs of young people for a slight drunkenness at night. For Luckin Coffee, this is the best window to enter the nighttime social scene for young people. Whoever can lead the way to occupy the mindset of "affordable, convenient, and delicious slightly tipsy drinks" will be able to occupy a place in the future nighttime economy. In addition, most young people are also the main customer group for coffee nowadays, so the deep integration of mild drunkenness and coffee has given Luckin Coffee more feasible space to launch alcoholic beverages.

Fourthly, 'early C and late A' is indeed an important direction for the diversified development of the market. In the long run, "early C and late A" is indeed an important direction for the diversified development of the beverage market. Luckin Coffee's attempt to enter the market again is a difficult exploration to transform the explosive marketing model into a normal mode. We must soberly recognize that there is a huge business gap between occasional phenomenon level explosive products and normalized profit pillars. The success of sauce flavored latte is largely driven by the curiosity brought by scarcity, and this emotional consumption has strong unsustainability. Once the novelty fades, the real challenge for Luckin Coffee is how to make it a daily habit for consumers to buy alcohol in coffee shops.

The test of normalized operation is no longer marketing creativity, but the fundamental skills of the hardcore supply chain: the shelf life of alcoholic beverages is completely different from that of coffee ingredients, how can cold chain logistics coordinate? Selling alcohol at night requires matching different store lighting, music, and even the language of service personnel. How to standardize the scale of thousands of stores? At a deeper level, there is a physiological conflict between coffee and alcohol. How to achieve a product mix that combines the flavor of coffee with a slightly tipsy sensation, without causing consumers to experience a disconnect, requires strong product development and iteration capabilities.

At the same time, how to achieve organic unity in the services of both is actually a huge challenge. Traditional coffee ordering and production can be done in one go, but the production of alcoholic beverages is not so easy. Let's not talk about it, many people have turned cocktails into works of art, and the difficulty of bartenders is much higher than that of coffee. At present, many of Ruixing's coffee shops are saying that they are not allowed to sell alcohol to minors. This alone is enough to make coffee shops headache. Since orders are so busy, it is not easy to consider how to judge the age of consumers. Now many stores have complained about Ruixing's creative department.

Therefore, Luckin's new launch is a watershed from marketing to sustainable operation. Whether it can convert traffic into retention and turn internet celebrities into long-term success still needs time to test.

(Image source for this article: UNsplash)

Source: Beijing Number

Author: Jiang Han's Perspective