Beijing's Never Coffee boutique coffee sells only 9.9 yuan. Is it in trouble or broken?

Since entering the Chinese market, as a refreshing functional drink, the price of fine coffee has been unparalleled. But things seem to be changing. Three years ago, Seesaw, founded in Shanghai, pushed the price of fine coffee to 25 yuan, causing controversy in the industry; now, Beijing's Never Coffee has pushed its fine coffee price to 9.9 yuan in a "spoiler" posture, deliberately provoking the nerves of peers. Is this a prelude to a price war in the coffee industry, or is it a premeditated attempt to break the price cycle?

A catfish has come to the boutique coffee world. This cafe named Never Coffee has been in operation for half a year. It is now the biggest customer of Chinese specialty coffee suppliers. At its peak, it uses 960 kilograms of specialty coffee beans a month--a figure that is usually less than 20 kilograms for an average specialty cafe. Founder Liu Zuofei is a young crossover. After graduating with an American Juris Doctor, he had a brief career as a lawyer. And last year, he managed to sell a juice brand for a good price. Crossers tend to be more barbaric in their attitude to industry rules. They rampage, stirring the pool water of the industry like catfish, wantonly stirring the nerves of their peers. Never Coffee is that. It pushed the price of a cup of fine coffee from the industry price of 50 yuan to 9.9 yuan. The product is simple: with more than 80 points of fine beans, through the filling line, to produce fine coffee that can be heated in a microwave oven. Each set of 6 bottles, there are 6 different flavors such as yejia sherphine and mantenin.

Since its launch in the middle of the year, the product has been surprisingly popular. On the first night of launch, Liu Zuofei's team sold 1950 sets, totaling more than 10000 bottles. This was also far beyond the expectations of the Never Coffee team-they only prepared 100 sets of products. Liu Zuofei told Kamen that the daily sales of Never Coffee are now around 5000 bottles. Counting down, the monthly flow is nearly 1.5 million. This is equivalent to the performance of three Starbucks. II. Starting from the most sensitive price of consumers, 9.9 yuan, this astounding price, was decided by Liu Zuofei after repeated quarrels with his partner Kang Jin. The latter runs two cafes in Beijing all the year round and is now responsible for the product line of Never Coffee, known in the industry as "Master Kang". Long-term experience tells Kang Jin that the reasonable price of a cup of fine coffee is 50 yuan, which is also the industry recognition price. Liu Zuofei disagreed. A long life in the United States made him think more about the price cycle of coffee: it was a lucrative industry. "A cup of fancy coffee without milk costs 4 cents, 22 yuan for small cups and 28 yuan for large cups. Starbucks sells 600 cups of coffee a day at an average price of 30 yuan, 500,000 a month. Excluding operating costs, Starbucks coffee is at least 10 times more profitable."

The more expensive boutique cafes on the market are forced to maintain high prices because of the high operating costs of single stores and the inability to move in volume. The team finally decided to break through the price cycle by starting with the most sensitive price for consumers. Never Coffee is aimed at consumers who have just needed coffee in the market. "There are such a group of consumers in the market, although the base is not particularly large, but it has become dependent on coffee. They have no requirements for the consumption environment, but 30 yuan a cup of coffee is stressful, and they don't want to drink instant coffee. Our products and sales model are aimed at this group." Third, large flow to save low profits In Liu Zuofei's design, the cafe was placed at the end and is not open to the public at present. In order to maintain profits, Never Coffee simply omitted the scene consumption of cafes. The three new stores under preparation also do not have tables and chairs, only provide ready-to-drink take-away, in order to reduce store rental costs. Another method is bulk purchasing. Never Coffee purchases in Ethiopia, Sumatra, Brazil, Honduras, Yunnan and other places, each time in the order of 5 tons, to be transported in containers. Bargaining power for bulk purchases makes it nearly 30% cheaper than independent boutique coffee shops.

Starting from the most sensitive product price of consumers, providing high-quality products with the lowest operating cost, and then capturing consumer passenger flow by cost performance to obtain profits. This is the business logic of Never Coffee. It is worth mentioning that on the third day of Never Coffee's online sales, the model finalized the 3 million yuan angel round investment of "Hongtai Fund" founded by Yu Minhong and Sheng Xitai. Is there a future for fine coffee industrialization? There's a "4321" theory about specialty coffee, which states that the quality of a cup of specialty coffee depends on 40% beans, 30% roasting, 20% equipment, and 10% craftsmanship. Making coffee into canned products and selling them online in large quantities, such a complicated process, how to ensure the quality of fine coffee? Thanks to his familiarity with the juice production line, Liu Zuofei and his partner started with equipment and tried to realize the industrialization of fine coffee. Due to the market gap of related equipment, they had to develop an industrial extraction machine and a semi-automatic filling production line. This set of equipment takes tons as units and covers an area of more than 200 square meters. "Although the appearance is ugly, it relies on a controllable form to ensure the stability of the quality of each bottle of fine coffee." At present, the production line can produce 5000 bottles per day, which is already a bit too much for the growing sales. Liu Zuofei's plan is to import a professional industrial extractor from Japan when sales increase to the next stage, and then find a contract manufacturer to solve the production capacity.

This industrialized coffee product has caused controversy in the industry since its birth. Is this bottled, low-cost, mechanically-produced coffee still a fine coffee? Some colleagues even came to the door to kick the museum, telling their history from bar to baking bean champion, denouncing them as "blind mixing" and "vicious price war". Of course, this new catfish in the boutique coffee world has no shortage of admirers. Zheng Songmao, chairman of Quality Cafe, told Kamen that he paid attention to the young brand Never Coffee as soon as it was launched and was interested in their different model.

Zong Xinkuang, founder of Seesaw, told Kamen that it is a good thing that a team can innovate and try models at the stage where fine coffee is in the Chinese market. But at the same time, both mentioned that whether this model is successful or not, the result still needs to be proved by profits. Liu Zuofei is mentally prepared for this. "I don't know how to make coffee, but I know the market is cruel. The project may die, or it may become a front-runner. But it's worth the effort anyway."

(Source: WeChat:KamenClub Author: Zhang Yiting Lu Wenbing)