The residual value of coffee?

China, which has a strong tea culture, has broad coffee consumption potential and is becoming the largest coffee consumption market in the world. Data show that in the next 10 years, China's coffee consumption market is expected to reach 1 trillion yuan. By 2030, China's coffee consumption market may reach 20, 000-3 trillion yuan, and the mature Chinese coffee consumption market should be 30-4 trillion yuan.

Although China currently drinks only three cups of coffee per person per year, less than 1/200 of the French, the huge market potential has attracted fierce competition from many coffee giants. Curiously, where does the petty bourgeoisie price of coffee come from compared to the rarity or price of tea? How to measure the market value of coffee? How much does "latte factor" occupy in daily life? And who drank the surplus value of the coffee?

The counterattack of imported products

In China, coffee consumption, with an average annual consumption of RMB 70 billion and a growth rate of 15 per cent, is stimulating the international market, which is growing at just 2 per cent a year.

According to historical records, as early as 2000 BC, the Ajiao people of Ethiopia had already picked and grown coffee on the tropical highlands of Kafa province. In ancient Arabia, the birthplace of modern coffee, stories about shepherd boys and sheep who ate coffee beans are very popular. It was not until someone fried the coffee beans, crushed them, boiled them with water and added sugar that they became a mellow drink.

In 1615, the world's first coffee shop was established in the port of Venice in the Mediterranean Sea. Thus leading the trend of modern coffee culture. From the discovery of coffee in North Africa and Arabia to the popularity in Europe in the Middle Ages, coffee gradually developed to the popularity in North America and Europe in modern times. At the beginning of the 20th century, a French missionary brought the first batch of coffee seedlings to Binchuan County in Yunnan Province, which announced that coffee took root in China.

Before the 1990s, coffee was not well known to the Chinese people. with the deepening of China's reform and opening up and the large-scale invasion of Western culture, coffee, the "vanguard of imperialist culture", gradually entered the lives of the Chinese people. Starbucks, a famous coffee brand, was introduced to China in 1999, and it is not surprising to say that this move has changed the beverage culture of a generation of Chinese.

In China, coffee consumption, with an average annual consumption of RMB 70 billion and a growth rate of 15 per cent, is stimulating the international market, which is growing at just 2 per cent a year. As a result, coffee, the ancient Arab culture, went smoothly in the birthplace of tea culture in the world. Starbucks has previously vowed to make China its second-largest market by 2014, with 1500 stores operating in more than 70 cities by 2015.

On November 26, 2012, Starbucks officially opened its 100th store in Beijing in Blue Harbor, while the concept of black apron barista swept in. Coffee trees zigzag from the wall, round and plump coffee fruit, roasted Arabica coffee beans. The cafe, which is dominated by the new art style, once again shows the owner Howard Schultz's ambition for the Chinese market.

It is worth mentioning that the Blue Harbor Business District alone has five open cafes and one coffee shop under construction. On the one hand, there is a constant controversy over the price of coffee, and on the other hand, all kinds of cafes are in full bloom. Is there really a profit blind spot between price and value?

"this price does not just include a cup of coffee," said Wang Jingying, president of Starbucks China. From coffee beans 7000 kilometers away to coffee cups within 10 feet, the value of coffee is a process experience. "it includes not only the product itself, but also our store partners, and how they communicate with our customers, and even educate and spread our coffee culture. This is the value of this.

Price and value

If you, like the author, are used to buying a latte of more than 30 yuan on your way to work every day, you must be muttering to yourself: if, as reported by public opinion, the cost of a cup of coffee is only a few yuan, who on earth is the person who made a fortune from it?

In Beijing, there are three kinds of mainstream coffee shops, one is international chain coffee shop, the second is domestic chain coffee shop, and the third is local independent shop. The best-selling types of coffee include American coffee, latte, cappuccino and mocha. The price is basically about 20 yuan per cup of American coffee, and the average price of the latter three is about 35 yuan per cup. So what does a cup of coffee cost?

Where we can see, there are coffee beans, milk, syrup, snacks, and out of sight, there are manpower, water and electricity, and rent.

"the rent in the business district determines the price of coffee." Sun Yu, founder of Beijing Fish Eye Coffee, calculated such an account: take the typical business district in Beijing as an example, the rent is between 2730 yuan and 30 yuan per square meter per day, and according to the average store area of 60 square meters, the average monthly rent is between 50,000 yuan and 70,000 yuan. Another important cost is staff wages. The income level of coffee practitioners is obviously not comparable to that of bartenders, but the monthly income of 2000 to 3000 yuan per capita is also recognized by the industry. If calculated according to the size of six employees in a store, the cost is basically controlled between 12000 and 20000 yuan.

In addition, there are also piecemeal costs such as commercial utilities, intermediary fees, cleaning fees, and so on. "compared with these, the cost of coffee itself is negligible."

If the above data are added together, the average monthly fixed cost expenditure is about 100000 yuan. So, in all cafes, whether Starbucks, Costa or fisheye or must help, these costs are amortized to every cup of coffee. If calculated according to the price of 30 yuan for a cup of coffee, the first 100 cups of coffee a day are filled in the cost. "if you want to have a relatively flat running water, selling at least 200 cups of coffee a day, the actual effective business hours are from 12:00 to 10:00, even if it is 10 hours, 200 cups of coffee, a day, selling an average of 20 cups an hour, each cup is made for 2-3 minutes, the coffee machine must be running at full capacity during effective business hours."

The reporter learned in the interview that foreign business circles are different from China, and they usually plan an area to rent individual niche shops at leasing prices different from expensive brands and chain restaurants, so as to enrich the business categories of the business circle. In China, the admission standards for all first-tier business areas are almost the same. In Beijing, for example, the rent of a shop in Sanlitun is even higher than that of Ginza in Tokyo, so if you want to run a coffee shop independently in a "good location", the price is unshakable.

The rent is Xiao he

The number of coffee houses can continue to increase, but the number of attractive locations is limited. This means that the owners have the upper hand in the negotiations.

It's like the doors that open and close in the movie "time Planning Bureau": calculate the time from the bathroom to the subway station turnstile; grasp the train schedule so that you can choose the right platform and change trains in the shortest time; race against the clock to calculate the time and distance of lunch to arrange a rare and pitiful rest gap. People shuttling back and forth causes traffic jams and rush hours, and businesses around the world are taking advantage of this opportunity to make money.

In undercover Economics, there is a description of the price of coffee: to figure out who makes most of the money, just think on both sides of the negotiating table: there are at least six competing companies on one side. on the other side is an owner who has an ideal location for a coffee shop. As long as those companies are allowed to compete with each other, the landlords will be able to determine the terms of the contract and force one of them to pay a high rent, which will offset most of the profits they expect. The number of coffee houses can continue to increase, but the limited availability of attractive locations means that owners have the upper hand in negotiations.

This passage has obviously answered our above question.

In contrast to Starbucks' pre-emptive voice, Costa, another coffee chain, chose to cooperate to circumvent rent barriers. In 2008, Hualian Kashijia was established by 50% each of British Whitbread Group and Hualian Group, responsible for the development and operation of Beijing, Tianjin, Shandong, Liaoning, Jilin and Heilongjiang and other northern regions. Hualian Group uses 70 large supermarkets and department stores as well as 10 shopping malls to provide Kashijia with a fast passage.

Even relying on the industry name of Hualian, Kashijia can easily get the exclusive right to stay in large and high-end shopping malls. Take Beijing as an example, since the opening of the first store in Beijing on August 8, 2008, Hualian Kashi has developed 43 chain stores in three years.

Also taking advantage of the strength is the Pacific Coffee chain from Hong Kong. In 2010, China Resources acquired an 80 per cent stake in Pacific Coffee from Chevalier Fanya with a cash transaction of HK $327 million. After the acquisition, it is fully handed over to its wholly-owned subsidiary, China Resources Vanguard, to take care of it. Pacific Coffee has benefited a lot from the latter's channel advantages. Tang Guojiang, CEO of Pacific Coffee, said frankly that China Resources Entrepreneurship is a strong backing of Pacific Coffee, and its accumulated awareness of retail over the years is of great help to Pacific Coffee's understanding of the domestic retail environment.

Independent cafes, on the other hand, seem less calm, and there are not a few people who struggle with tycoons, costs, prices and personalities. In fact, the current market environment in China is considered to be not conducive to the sustainable growth of cafes. Sun Yu said, "many people put opening a coffee shop and spending in a coffee shop into a concept, which is completely different. There are a lot of trivial things about opening a coffee shop, which is not as beautiful as it is shown in TV dramas. Don't regard the coffee shop as your own living room, which ignores the nature of the coffee shop. (by Liu Cong / tr. by Phil Newell)