Master Kang climbs to the "petty bourgeoisie" Starbucks ready-to-drink coffee market against unification

Master Kang's beverage empire has fallen again, and Master Kang, who has always been famous for its price, has climbed to Starbucks, a "petty bourgeoisie". Yesterday, Starbucks Coffee Company and Kang Shifu announced that Starbucks will be responsible for product development and brand development, while Starbucks will be responsible for the production and sale of Chinese mainland ready-to-drink coffee products. This is also the case that after establishing a strategic alliance with Pepsi to expand the category of carbonated drinks and their fruit juices, Master Kang has once again developed the category of ready-to-drink coffee through cooperation.

Compete with old rivals in the field of coffee

At present, Starbucks ready-to-drink coffee is produced by US factories, and Chinese consumers can buy Starbucks bottled "Starbucks Frappuccino" instant coffee in more than 6000 places, including Starbucks stores, supermarkets and convenience stores. At the same time, Starbucks operates more than 1500 stores in nearly 90 cities in China, making China Starbucks' fastest-growing market outside the United States.

According to this cooperation agreement, Master Kang will bring all Starbucks ready-to-drink coffee product lines to the Chinese market and strengthen the innovative ability of localization. The two sides plan to produce and market existing and new Starbucks bottled "Frappuccino" ready-to-drink drinks in China in 2016. It has also been revealed that after that, more innovative products will be launched and Starbucks ready-to-drink products will be extended to more sales outlets and cities.

According to the industry, Master Kang ranks among the best in China's packaged drinking water, tea, fruit juice drinks and other categories, but has not previously set foot in the ready-to-drink coffee market, and its products have always been known for their price. This climb to Starbucks will further enrich Kangshi's beverage product portfolio in the Chinese market. At this point, Master Kang will once again "go to war" with his old rival in the field of ready-to-drink coffee.

Changes are brewing in the instant coffee market

China's ready-to-drink coffee and energy drinks market is currently worth $6 billion and is expected to grow by another 20 per cent over the next three years. After the whole beverage industry bid farewell to the golden age of high growth, instant coffee, which is still a fast-growing minority beverage, is becoming a new favorite in the industry. Just last year, after the collapse of its cooperation with Nestl é, Coca-Cola, which once abandoned the mainland ready-to-drink coffee market, made a comeback and announced the official launch of its own brand of "Joya" instant coffee to China.

At present, several brands with high market rate of ready-to-drink coffee in China are Nestle, Uni-President Yaha, Wangwang Bond, Wei Quan Bernarzon and so on, while other brands such as China Resources Hot Coffee often appear in the southern market. As one of the earliest coffee drinks to enter the Chinese market, Nestl é accounts for more than half of the market share of ready-to-drink coffee, followed by Uni-President Yaha with a strong channel network. In most areas, the battle for instant coffee is still concentrated between Nestl é and Unification.

Zhu Danpeng, a researcher at the China Food Business Research Institute, believes that the addition of the two beverage giants Coca-Cola and Kang Shifu, as well as the combination of Starbucks' brand power in the high-end consumer group and Kang Shifu's channel strength, will play a positive role in the rise of ready-to-drink coffee, a minority beverage category, and subvert the whole ready-to-drink coffee market. Editor: Rao Dan

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