Text: Win the intelligence station immediately.The "roll" of Chinese coffee seems to have become a norm: the pace of opening stores of leading brands is fast and fast, and 99** war, almost every day, there are brand official announcements of joint or new product ......However, the volume kings that consumers are familiar with and stay in the focus seem to focus on stores and freshly made drinks. Are there any other ideas worth paying attention to in the ever-changing coffee?
In 2023, Coca-Cola has been praised by Coca-Cola many times, and has its own ideas and has delivered an eye-catching answer sheet in the ready-to-drink coffee track.
In 2018, Coca-Cola acquired Costa for 3.9 billion pounds ($5.1 billion), the largest acquisition in Coca-Cola's history at the time. The acquisition, which is said to have been negotiated in just five weeks, has led to significant growth in Coca-Cola's coffee business five years later.
According to the data in the offline retail monitoring network, in 2023, Coca-Cola's market share will increase by 172% (Coca-Cola currently "officially" sells ready-to-drink coffee brands in China, and only Costa), significantly ahead of other competitors.
Coca-Cola also praised the performance of Costa many times last year, and disclosed in the third quarter report of 2023 that the company's coffee sales increased by 6% globally, mainly driven by the strong growth of Costa coffee in the UK and Chinese markets, and this is the fourth consecutive quarter that Costa has performed well in China and the UK.
As the "new favorite" of Coca-Cola, how does Costa get out of its own way in the ready-to-drink coffee track? Based on the relevant data in the offline retail monitoring network, this week we will read the number of Costa for you.
Overview of the RTD Coffee Track According to the data of Instant Win, among the many beverage categories, the market share growth rate of RTD coffee in 2023 will reach 71%, ranking fourth out of 22 four-level categories. In the analysis of the ready-to-drink coffee category, the first is the case of CR10.
It can be seen that the group CR pattern of the entire category is Nestle ranking first, and there is a fault gap with all other groups. Starbucks and Coca-Cola's Costa, as the leading and representative in-store coffee brands among foreign investors, also ranked first in the field of bottled ready-to-drink coffee.
Second, third, it can be seen that its mind in the field of coffee is still applicable in the field of bottled beverages.
The follow-up ones are Master Kong Holdings, Uni-President, Never Coffee, Yetai, Weiquan, Nongfu Spring and Dongpeng Beverage. Among them, Nevercoffee and Dongpeng can be regarded as "newcomers" in the ready-to-drink coffee category, the difference is that Nevercoffee makes ready-to-drink coffee in a new way of consumption, while Dongpeng hopes to use its successful experience in the energy drink track to also get a place in the ready-to-drink coffee track with the same "refreshing" mind.
In terms of the distribution of categories, it can be seen that the proportion of convenience stores and grocery stores in the beverage category is significantly higher than that of hypermarkets, large supermarkets and small supermarkets, and it is speculated that the purchase behavior related to channels should be more inclined to instant consumption rather than household consumption or hoarding. This is also related to the "refreshing" efficacy of ready-to-drink coffee, which is driven by the need for refreshment, and the consumption motivation of consumers comes from the need for refreshment.
In terms of the regional distribution of categories, it can be seen that the Northeast region has a higher proportion than other regions, which may be related to the less coverage of its chain coffee stores and the weaker mentality of other refreshing beverages. Another noteworthy is that the proportion of bottled ready-to-drink coffee in North, Central, South and East China, where coffee culture is prevalent and the economy is more developed, is not high, and the reason may be related to the development of affordable coffee stores.
In these areas, the coverage rate of chain coffee stores such as Luckin, Cudi, and Lucky Coffee, which is the same as Mixue Bingcheng, is quite high, and the coffee products provided by the stores are low enough, which greatly squeezes the space for bottled ready-to-drink coffee.
For example, the most affordable lucky coffee is 5 for its small red cup series (300ml net cup content) for espresso American, espresso latte and espresso chocolate coffee9 yuan, 69 yuan, 99 yuan, while providing a better coffee experience and greater net content, ** is also basically close to bottled ready-to-drink coffee, so it is easier to become the "first choice" of consumers.
In terms of the composition of the taste selling points of the ready-to-drink coffee category, it can be seen that the latte flavor (coffee + milk) occupies an absolute leading position, and its market share exceeds the market share of all other flavors combined, which shows that the fixed combination of coffee and milk has a deep-rooted influence on our coffee foreign culture, and the second Mocha and American as traditional coffee flavors are less than 10%. Another noteworthy point is that innovative latte-based flavors such as cheese latte and raw coconut latte also occupy a considerable share, which has a certain advantage over traditional flavors such as caramel, hazelnut, and vanilla.
As for the average price of ready-to-drink coffee, it can be seen that the average price of products in each month of 2023 has not changed significantly, and the difference between the highest point in July and the lowest point in October is less than 3%. At the same time, the change of the average price of ready-to-drink coffee is not closely related to seasonal changes, and there is no obvious trend in winter and summer.
The "beverage price increase" turmoil that will be in the dust in 2023 will not have much impact on the average price change of the ready-to-drink coffee category, and it is speculated that it may be because the average price of the ready-to-drink coffee category is already 6More than 5 yuan bottles, in all beverage categories, belong to the typical "** grid category", the overall impact of the price increase is limited.
Beverage + Coffee: A Fatal Acquisition Back in 2018, when Coca-Cola acquired Costa, what kind of situation were they facing?
Although Coca-Cola is the king in the packaged beverage industry, the category structure is not so "healthy" - sugary carbonated drinks occupy a large share, under the influence of health trends, as a great company that stands tall enough and sees far enough, it must lay a good foundation for the next hundred years. The four major "addiction" products in the human gene - tobacco, alcohol, sugar tea, tobacco can't be made, it's a bit difficult to cross the border of wine (but later it turned out that it was still done), sugar is almost done, and tea has been done - but there is also "addiction" coffee in the Western world, there is only one line of Japanese Qiaoya coffee, such a large market, there is still one less brand that can do globalization.
Costa, on the other hand, has been making coffee for almost 40 years, and the foundation of the ** chain is very good, but it is relatively limited to Europe. At the time, it was the third coffee chain – but far behind the number one Starbucks and slightly behind McCafe (Win now: McCafé, McDonald's independent coffee brand, but initially mostly co-opened with McDonald's stores). However, McCoffee has McDonald's as its backing in the world, and if Costa wants to continue to grow rapidly, should it also find a reliable partner who is good at global operations?
At this time, Costa's old club Whitbread was interested, and British fellow Zhan Kunjie (immediately won: James Quincey, then & current president and CEO of Coca-Cola) was too familiar with the brand from his hometown to hit it off. It is said that the whole negotiation took only 5 weeks, and all the cash was settled, which can be described as a joy for the guests and hosts.
But things didn't all go smoothly after that, and Costa's stores around the world were hit by the pandemic and experienced many challenges. But it seems that during this period of time, the run-in between Costa and Coca-Cola Company has gradually improved, and gradually found a 1+1>2 model - no longer limited to stores, but to develop more out-of-store coffee consumption scenarios including RTD (Ready to Drink, bottled beverages, hereinafter referred to as RTD) retail and automatic coffee machines, together with Coca-Cola, which has positioned itself as a Total Beverage Companyto create a total coffee company.
After experiencing a low profile during the epidemic, Costa (Chinese famous coffee family) used a "blitzkrieg" in China to hand over an answer sheet that Zhan Kunjie repeatedly praised, especially the feeling of "Concubine Xi returning to the palace". Such praise for nature's "famous teacher". Looking back at Costa's performance in product innovation in 2023, Costa has an impressive performance, according to the data in the offline retail monitoring network, Cosa has exclusive six seats among the top 10 new ready-to-drink coffee products launched in 2023 and ranked in terms of market share.
In fact, there are many brands that will launch new coffee products in 2023, why is COSTA's new products so outstanding?
We found that there are many inspirations for the new flavors of Costa ready-to-drink coffee, such as raw coconut latte, velvet latte, oatmeal latte, cheese flavor, hazelnut flavor, etc., which are very popular flavors in freshly made coffee stores in recent years.
Costa itself has its own stores, and the number of stores is growing steadily. Compared with pure packaged beverage companies that rely entirely on distribution channels, Costa can interact with consumers more directly and efficiently through ready-made stores, and obtain more accurate first-hand insights based on digital systems. Coca-Cola is also the first time Coca-Cola has had a direct-to-consumer business.
But getting first-hand insights is only the first step. Perhaps there is a certain advantage in terms of the initial concept of the product. But it's not just Costa that has such an advantage, coffee chains like Starbucks that have a complete digital system and more stores are actually likely to do better. In fact, in addition to having front-end insights, Costa also has a well-established coffee ** chain and is an expert in coffee itself. After the completion of the acquisition of Coca-Cola, Coca-Cola has repeatedly stated that they value Costa's ** chain rather than stores.
In addition to this, Costa also has Coca-Cola as a professional partner for RTD bottled products. Coca-Cola showed great ambitions for the RTD coffee business at the beginning of the acquisition of Costa, and launched Coca's RTD products non-stop in 2019, just after the acquisition was completed.
To sum up: coffee is not as good as Coca-Cola can make bottled drinks; I can make packaged drinks, and I don't have a costa to make coffee.
According to the relevant data in the offline retail monitoring network, among the top 20 ready-to-drink coffees with market share, Costa Coffee has adopted a very interesting pricing strategy: in the PK with well-known brands, Costa's single product pricing is slightly higher than that of retail coffee brands such as Master Kong and Nestle, but it is significantly lower than Starbucks, which also crosses over from in-store coffee to bottled ready-to-drink coffee. If you look at the unit price per 100 ml, costa 2The unit price of 33 yuan per 100 milliliters is even lower than that of a certain Nestlé product.
Such a pricing strategy not only retains Coca-Cola's cheap and big-bowl style, but also maintains the mental difference of the coffee brand in the store, which is inseparable from Coca-Cola's experienced control in pricing and channels.
In fact, even this pricing is still profitable for Coca-Cola: in Coca-Cola's current product portfolio, ready-to-drink coffee itself is a high-unit price category, and compared with other types of beverages that often start at 330ml and 500ml, Costa specifications are smaller, and the product and operating costs are lower. Compared with traditional carbonated drinks and fruit juices that face more cost pressure, ready-to-drink coffee may be able to give Coca-Cola more "room for development" and "imagination".
In the channel construction and product display of COCA, Coca-Cola also gave COSA a lot of assistance. In many convenience stores, Costa is basically in the most conspicuous position on the shelves or freezers, and the family is neatly lined up and the cards are full. In addition, Coca-Cola also has a professional retail manager to manage the retail channel of Costa RTD products, and launch products with different capacities, packaging and flavors for different channels.
At the same time, Costa has not let go of its old business and further accelerated the pace of global store opening. Stores have always been the most important position for the operation of the Costa brand. After Coca-Cola's acquisition of Codra, Costa's two CEOs, Jill McDonald and Philippe Schaillee, both came from a restaurant or coffee background, and Costa still has a very clear control of the main business. Ouyang Qingqiu, president of Costa China, also said that in his plan, the number of Costa coffee stores will sprint to more than 1,000 in the next few years.
In addition to more stores and a faster pace, Costa is also trying to diversify its operations, such as more and more Costa coffee vending machines and more flexible smaller stores (similar to the SFTARBUCKS NOW series of stores, which provide coffee service in a smaller area and provide a smaller "third place"). In the increasingly volatile coffee market, it is becoming more and more difficult to "eat all over the world". But this gentleman from England, as the Total Coffee Company, is using more diverse ammunition to seize his position.
Good love is a cliché for mutual achievement, and the history of drinking coffee in Western countries is even longer, from the popularization and portability of coffee brought by instant coffee, to the rise of coffee chain stores represented by Starbucks, and then to the widespread spread ...... specialty coffee cultureOver the past 100 years, the evolution of the coffee industry has been relatively clearly divided into different stages, the so-called several coffee waves; Brands and consumers also have relatively more time to adapt and achieve each other.
But China's coffee market has condensed these changes in just a few decades. On the one hand, there are many coffee brands and coffee products with their own characteristics, and at the same time, they are flocking to the Chinese market, where per capita coffee consumption is not high. But on the other hand, the huge consumer base and a large number of consumers who are still a blank slate for coffee show unprecedented curiosity, exploration and inclusiveness, and everyone has an opportunity.
Coca-Cola's acquisition of Costa is like a much-anticipated wedding, with a background that matches you. But the days to come will require both sides to operate well, and what Costa has achieved in the Chinese market today is that both Costa and Coca-Cola are doing themselves well, and both companies are developing around their respective visions
Costa – Total Coffee Company, continues to meet consumer demand for coffee. The Coca-Cola Company, Total Beverage Company, continues to meet consumer demand for beverages. In fact, such cases are not uncommon in a "heavy" industry like coffee: Nestle and Starbucks established the Nestle Starbucks Alliance; JAB has successively smoothed the upstream and downstream of the coffee industry, from PEET'S Coffee began to build an entire coffee empire.
In these successful cases, we have seen that it is important for partners to adapt and run in with each other, and the "cost reduction and efficiency increase" acquisition to optimize financial indicators is also effective, but more importantly, it is more important for the other party to do what they are good at without worries.