Mode thinking: why did Starbucks become a money printer?

Professional barista communication, please pay attention to coffee workshop (Weixin Official Accounts cafe_style )

Introduction: About Starbucks, we have shared in the ten-fold series of Dianshi. From 2009 to today, Starbucks has increased tenfold. White horse disease + excellent management = golden opportunity to invest. Starbucks 'first wave of tenfold opportunities is the money from performance reversal (recovery of same-store growth after 2009, strategic adjustment of the company).

Starbucks has a ten-fold chance of making money in the second wave of mobile payment technology innovation. Good business model + replicability = high valuation premium. Today, we think more about Starbucks from the perspective of business model, and the research on our catering industry can also be inspired.

Starbucks is a money printer.

Let's start with a simple comparison between Starbucks and McDonald's, the world's two largest restaurant chains.

As of October 2016, Starbucks had 12711 self-owned coffee shops and 12374 franchised coffee shops worldwide, generating net revenue of $21.3 billion and net profit of $2.8 billion in fiscal 2016. Since net profit growth has external factors, we look at Starbucks 'growth through simpler revenues. The company's revenue grew from 13.2 billion yuan in 2012 to 21.3 billion yuan in four years. Let's compare Big Mac McDonald's, which has 5669 self-owned restaurants and 31230 franchised restaurants worldwide, bringing in revenue of US $24.6 billion and net profit of US $4.6 billion in 2016. McDonald's revenue has declined over the past few years, from $27.4 billion in 2014 to $24.6 billion in 2016.

Starbucks relies on 25085 coffee shops, which is already similar to McDonald's, which has 36899 restaurants, in terms of revenue, while Starbucks currently has a market value of 93.5 billion and McDonald's 125.3 billion US dollars.

If we feel intuitively, we can also find Starbucks powerful. Last year my friend Larry. Ray wrote an article: The second-class dog party Holy Land Gold Costa closed down. In fact, Lujiazui closed not only the national gold Costa, but also Jinmao's cat feces coffee.

Starbucks alone, more and more open, seems to be the only coffee shop that can make money. So what does Starbucks rely on to become a money printing machine?

The heart of the restaurant business model: efficiency

I think the core of the restaurant business model is efficiency, efficiency of the floor and efficiency of the time. Let's talk about time efficiency first. Many times I often find that restaurants that have been queuing on weekends have closed down in a few years. Later, in-depth research found that many restaurants only have business on Friday nights and weekends, and no one goes to them at ordinary times. So from the time period of a week, many restaurants are not very efficient.

What we found was that most restaurants couldn't accommodate both the needs of office workers and weekend family and friends. Salad shops in office buildings, for example, tend to line up only at noon, but on weekends starting Friday night, there is little business. There are also many restaurants in large shopping malls, which are crowded on weekends but usually empty. And many restaurants rely on rapid turn-over rates to turn over customers.

So how to fill up the time and increase the turnover rate of the restaurant becomes particularly important. We see many restaurants offering afternoon tea packages to improve the worst traffic period between lunch and dinner. Other restaurants rely on a higher turnover rate to improve efficiency. The most typical is the sea bottom fishing hot pot, an average of four times a night, even at 11 o 'clock to queue up.

Another efficiency is the efficiency of plateau effect, that is, to achieve maximum revenue with minimum area. If it is also 4 million yuan revenue, through 30 square meters to obtain this revenue, far more efficient than 100 square meters restaurant. For example, Zhou Heiya, which we recommended before, can still earn an annual income of 3 - 4 million yuan through a small shop of about 10 square meters, reaching the average level of KFC in China. There is also the recent fire of wedding tea. Annual income can reach more than 10 million yuan, this kind of flat effect is very high, can lead to Xi tea in rent more expensive, traffic more places to rent stores.

A few days ago, Tianfeng retail analyst Zhang Lufang made a calculation of Xi Tea People's Square Store. According to the annual income of 27 million yuan in a single store, the flat effect reached 270,000 yuan/square meter, and the cost could be recovered in 3-4 months. this efficiency is far higher than that of the shops in laifu.

Starbucks: A Born Good Business

Starbucks coffee is inherently good business in terms of product categories, and of course this has something to do with the innovation of its founder Howard Schultz.

The earliest coffee was a cheap drink sold at McDonald's, Dunkin Donuts. Howard Schultz pioneered the concept of "third space", making Starbucks coffee a high-profile beverage by building Starbucks physical stores. Starbucks is highly efficient, both in terms of time efficiency and efficiency. The average price of a cup of coffee is between 25 and 30 yuan, which is equivalent to the price of a McDonald's package. But Starbucks stores are much smaller and more frequent than McDonald's. And Starbucks time period is basically full, whether it is morning, noon, afternoon will be bought.

Starbucks stores have comfortable seats, but mainly take out. This is also one of the core patterns of many catering bull stocks: Take Out. Only by increasing the take-out business can the restaurant's efficiency be greatly improved.

Historically, those large-market catering enterprises, on the one hand, are global chains, on the other hand, they have strong Take Out attributes. These include McDonald's, Burger King, Wendy's, American pizza giant Pizza Hut, Domino's pizza, and Chipotle's chicken burrito. At the same time, we saw the collapse of Costa Coffee downstairs last year, which was too poor. Although most of the time there are a lot of people sitting inside, very few people Take Out. Larry Ray's article at the time even said that there were many "second-class dogs" like the author who sat dry and drank water in a bear market. Another closed Jinmao downstairs cat poop coffee is also, every time there is almost no one, let alone take out. However, the shop area is much larger than Starbucks on the second floor of Jinmao, and Pingxiao and the latter are far from comparable.

Coffee itself is a good drink. Food and beverage is very important point is consumption frequency, if there is high-frequency consumption attribute, even if rely on the original consumer group, can maintain very good cash flow. Many people are addicted to coffee and drink a cup every day. Some things are seasonal or cannot be consumed too frequently. Such as crayfish, spicy hot pot and so on. Starbucks, based on the frequency of coffee consumption, has increased user stickiness through star cards and mobile payments, bringing Loyalty Program to its extreme.

In fact, over the past few years, many restaurants in the United States have been heavily involved in mobile payment models, with Starbucks accounting for more than 90% of U.S. payments at its peak. Panera Bread and Domino's Pizza both obtain more accurate user data through mobile payment and solve the problem of users waiting. Since mobile payments for these companies are done in their proprietary apps, the data quality is higher. Unlike most mobile payments in China, they are done in Alipay and Weixin Pay.

Essential conditions for becoming a giant: chain, standardization, branding

In fact, chain, standardization and branding are one. For any restaurant giant, if the product cannot be standardized, there is no way to chain promotion.

We see many good restaurants with a strong craftsman spirit, but there is no way to standardize. All rely on the master's personal craftsmanship passed down from generation to generation. For example, sushi restaurants in Japan, barbecue restaurants, some snack bars in China, etc. At the same time, many ultra-high-end restaurants will not be standardized and chained at all, serving niche groups as business models. These can live well, but never become restaurant giants.

Starbucks standardized coffee, McDonald's standardized hamburgers. Everywhere in the world, coffee and hamburgers taste the same. Today, more and more people around us value this standardized meal. In the past, when we went to third-and fourth-tier cities for business, we often wanted to try local snacks. Later, it was discovered that eating McDonald's had the highest safety index, because many times local snacks were also "nibbling dad". Even today, when we go out to dinner with our wives on weekends, we prefer to eat at restaurants that we have eaten countless times because we have full expectations about the food and service inside.

Especially in China, the linkage model will be dominant and leave a smaller and smaller time window. We saw the rise of restaurant chains in the United States in the 1980s (Starbucks was also launched at that time). Today, the barriers to these chains are still deep. After the decline in nominal GDP growth, it will become more and more difficult to build restaurant chains in the future, and people's consumption and eating habits will not change as much as they have in the past 20 years. The chain created now will become the leader in the subdivision field in the future.

Finally, of course, the brand. How do you think Starbucks tastes better than Costa? What's the difference between McDonald's and Burger King? Even where is the real difference between Coke and Pepsi?

Brand premiums can be important. Of course, a strong brand is based on excellent products, standardized and chain models, and a series of thoughtful customer service. As for Starbucks, we see that it has begun to decaffeify, and the company will gradually transform itself from a coffee roasting company to a healthy food company.

Investment Inspiration: Where's the Next Starbucks?

China is entering the era of chain catering, and efficiency, time efficiency and frequency of consumption have become important factors in shaping Starbucks in the future. Personally, milk tea is still a good business in China. The consumption frequency can be very high, the flat effect is very good, and the unit price of customers is actually higher than many restaurants.

That's why everyone's talking about wedding tea, a little bit. And the milk tea industry has established a certain brand, we often see a little overcrowded, and next to Coco milk tea empty. This is also one of the reasons why Xicha has gained a valuation of more than RMB 1 billion. A little bit is not open to join at all.

Other aspects, Chinese fast food, noodle chain also has a relatively large growth space, the problem is that the time period is difficult to smooth, basically still rely on lunch and dinner time. Zhou Black Duck's current market value space also has great growth, platform effect and time period efficiency are very good, category SKU is few, easy to manage.

In the next five years, Chinese chain restaurants will come out of many giants, just like the 1980s in the United States, laying the foundation for the next consumption wave.