After KFC’s coffee brand “K COFFEE” entered the instant coffee market with three cold-extract freeze-dried instant coffees, another fast food giant McDonald’s also began to increase its presence in the coffee field.
On November 16th, McDonald’s announced that its brand McDonald’s plans to invest 2.5 billion yuan in the next three years to accelerate its deployment in the Chinese mainland market. It is estimated that by 2023, there will be more than 4,000 McDonald’s in the country. The next day, the McDonald’s official account officially announced the “10 million cups of latte, free drink” event.
One is turning around and attacking the new coffee beverage sector, which is gaining momentum, and the other is optimistic about China’s offline coffee market. Facing the domestic coffee market with a scale of more than 100 billion yuan, the two giants have long been gearing up. From fast-food coffee to specialty coffee, to focus on online freeze-dried coffee, every attack is closely related to the development of the Chinese coffee market.
For the exploration of the coffee field, neither KFC nor McDonald’s has just arrived. The hard work for a long time is nothing more than waiting for a mature time for the coffee market. However, under the large-scale and large-scale design, it seems that the innovation of the chain giants in exploring the new road of coffee and drink is not seen. The old road of fast food marketing is contrary to the stories, appearance and joint activities that the new coffee drink brands pay attention to.
Perhaps the coffee business can bring new growth points to the “KFCs” in a certain period of time, but this is not the truest appearance of new coffee drinks after all.
Follow the trend of snail powder “push the street”, fast food giants have new goals
KFC’s recent new moves are always a little “strange”.
First, on October 13, KFC launched the “KAIFENGCAI” fast-cooking pre-packaged food series products. One of the most eye-catching products was snail noodles. “Unexpectedly, I also had a day of eating snail noodles at KFC”, “You finally started with snail noodles” and other comments put the news on the Weibo hot search list.
Although the popularity is not low, Zinc Scale found through its Tmall flagship store that the monthly sales of “KAIFENGCAI” snail noodles are only 2000+, and there are only more than 200 historical reviews. The price of this product is 45.7 yuan for 3 packs, which is higher than Haohuanluo, Xiluohui and other snail powder brands, and its sales volume is not as good as the latter’s data of 20W+ and 55W+.
As a Dengding Internet celebrity product that was once out of stock during the epidemic, the snail powder brand can be said to have made a lot of money. However, in this environment, KFC, a big brand with many fans, failed to produce impressive results.
Then, KFC made a new move in the instant coffee market. In fact, as early as 2014, “K COFFEE” under KFC entered the domestic freshly ground coffee market, and even achieved sales of 137 million cups in 2019.
But the sales of instant coffee that runs two legs online and offline are flat. At present, this series of KFC products has three flavors: Sida Mo, selected Earl Grey tea and coffee, and Osmanthus Flavor Sida Mo. The price is 24 pieces of 129 yuan, an average of 5.4 yuan each.
Like previous marketing strategies, the poster of KFC’s premium flash cold brew freeze-dried instant coffee printed a photo of Wang Yibo holding coffee. In the product review area, you can also see all the fan messages, “I just bought it after watching Wang Yibo’s endorsement, and the flavor is indeed lacking”, “Come for Wang Yibo, call for K coffee”, “Motor sister just wants to support KFC Spokesperson Wang Yibo”…
Even if the fans’ combat power is extraordinary, the link with the highest sales of KFC’s boutique flash coffee series in the Tmall flagship store is only 8,000+ monthly. Leading brands such as Sandunban and Yongpu, among the new coffee drink powers, have monthly sales of tens of thousands or even 100,000.
Perhaps because the cold-extracted freeze-dried form is no longer fresh in the past two years, or perhaps because KFC failed to achieve a breakthrough in terms of flavor, price, or appearance, the response failed to match the brand’s influence and public expectations. .
KFC cold brew freeze-dried coffee sales are not high
Yum China and LavAzza jointly open flagship store
The coffee market is an obsession of Yum China
Wherever it is lively, you can see KFC everywhere. Although the current exploration of snail noodles and freeze-dried coffee shows some signs of “pumping on the street”, Yum China’s ambition to gain a foothold in the Chinese coffee market has long been revealed.
First, relying on the advantages of more than 6,000 restaurants under the KFC baseline, plus promotional activities such as “28 yuan coffee monthly card”, “big god card 10 yuan a cup”, K COFFEE has some innate conditions when occupying offline fast food coffee, so More than 60 million cups were sold in the first half of 2019 alone, and 137 million cups were sold in the whole of 2019.
”Our main growth categories, including breakfast, coffee, desserts and takeaways, have accounted for more than one-third of sales.” Yum China CEO Qu Cuirong said at the mid-2019 performance conference.
It is not enough to rely on K COFFEE to occupy fast-food coffee. Specialty coffee is also an important branch of the coffee field. Yum China has taken two paths to explore the specialty coffee field. One is the launch of COFFii&JOY brand cafes. The store is equipped with an Italian bar, a hand-made bar, a coffee bean storage warehouse, etc., providing different coffees such as Italian, cold brew, hand-made, etc. Category, non-coffee beverages such as tea and juice are also available, and the price is around 30 yuan.
At present, COFFii&JOY has deployed more than 50 stores in 9 cities including Beijing, Shanghai, Hangzhou and Nanjing. Among them, the first-tier markets in Beijing, Shanghai, Guangzhou and Shenzhen account for 33. Yum China’s financial report for the second quarter of 2020 also mentioned that COFFii&JOY has been included in Yum China’s store statistics, and the company will open 800-850 new stores next.
The other way is to establish a joint venture subsidiary with the Italian coffee brand LavAzza, a long-term cooperative supplier, and open a LavAzza flagship store in China. In the coffee category, the LavAzza flagship store includes two major categories: Italian and creative. The per capita consumption is around 50 yuan, positioning it as a more high-end customer group.
In three steps, Yum China aims at the popular fast-moving customer group through K COFFEE, the mid-end boutique customer base through COFFii&JOY, and the high-end customer base through LavAzza flagship store. The three do not conflict with each other, but together support Yum China. Coffee market ambitions.
In addition, because of the popularity of takeaway and healthy eating, the fast-food market has been diverted. Therefore, KFC has also launched vegetarian products and opened a KPRO green restaurant in Beijing, which focuses on salads and first nitrogen coffee.
Now that it breaks into the nowadays extremely hot freeze-dried coffee track, Yum China has hardly missed any turmoil in the coffee market.
For Yum China, a large-scale brand, a high degree of standardization, and an efficient and intensive supply chain are the upward potential for it to quickly achieve a new development direction. But what is obviously a bit weak is that under the big brands, every coffee brand in Yum China has not made a bigger splash. In other words, if the coffee business is to become a bigger sales growth point for Yum China, it needs to be in the giant On his shoulders, he took out a more powerful weapon.
Yum China’s new store openings in the third quarter of 2020
Fast food routines cannot tame new markets
Corresponding to the multiple arrows of KFC, McDonald’s decided to invest 2.5 billion yuan in the next three years to accelerate the deployment of the coffee market in mainland China. McDonald’s predicts that by 2023, there will be more than 4000 McDonald’s in the country.
Through comparison, Zinc Scale found that the upgraded McCafé already has a more independent manual coffee machine and hand-made coffee bar, but it still relies on the McDonald’s restaurant as in the past, and realizes linkage sales with McDonald’s hot food. In an interview with the media, Zhang Jiayin, CEO of McDonald’s China, mentioned whether there will be instant coffee, capsule coffee and other categories in the future. There is no answer for the time being. “Mcafé itself is a sub-brand, and we will absolutely carefully consider where the possibilities are in the future.”
KFC and McDonald’s are indeed fertile ground. According to Aurora survey data, among many coffee categories, consumers drink instant coffee most often, followed by freshly ground coffee. In addition, during the “Double 11” event from November 1st to 3rd this year, the coffee category increased by 1900% year-on-year. Among them, hanging ears, coffee liquid, and capsule coffee increased by more than 5000%. The three-day sales have surpassed last year’s “Double 11″.
“Coffee chains are competing, and the established fast food chains will of course want to get a share. They have a solid foundation in store distribution, operating systems, brand marketing, and business content. Coupled with the impact of the epidemic, their ability to resist risks is poor. Companies with insufficient brand power have been hit hard, and this has also provided new opportunities for chain brands to enter the coffee market.” Nicole, who is engaged in the supply of beverage raw materials, mentioned to Zinc Scale.
But at the same time, she believes that when large-scale chain brands expand their business lines, they will also face the problem of “big tails” due to their oversize. “For the current freeze-dried cold brew coffee top brand Santonban and hanging ear coffee top brand Sumidagawa, these two brands are still in a period of explosive growth while maintaining their leading advantages. Therefore, whether it is for new Brands and the business lines of giants are strong opponents.”
Indeed, the new coffee and beverage brands born with new retail, during the epidemic, contrary to the cold in offline stores, a wave of consumption and traffic swept across. Come. Brands such as Sandton, Sumidagawa, and Yongpu are targeting consumers at a more fragmented time, and they have worked hard on peripheral products or brand culture to greatly increase the possibility of consumers turning into fans.
Personalization and innovation are important means for new coffee drink brands to win consumers. For large chain brands such as KFC and McDonald’s, it is not difficult to diversify attempts in terms of brand power, digitalization, and takeaway business, but personality and innovation It is necessary to form a composite team that not only ensures stable operations, but also enables continuous innovation in products and supply chains.
With the competition in the coffee market gradually entering a fierce stage, new coffee drink brands are catering to the dividends in the new retail scene, speeding up and harvesting new sales growth points, while “KFCs” need to break through store retail through online At the same time, it enhances the stickiness of fans by improving the offline user experience. The two-way linkage is used to increase the layout and gain a firm foothold, instead of consuming its own heat and ending hastily.