In the coffee track in 2023, Cudi has received widespread attention. Especially in the second half of the off-season, there seem to be more and more associates who complain about not making money and having no hope of recovering their capital on social platforms.
Affiliate confidence has been frustrated, and the pace of Cudi's surge may be reduced. But China's coffee market is still growing at a rapid pace. According to iResearch**, the size of China's freshly ground coffee market will reach 191.7 billion yuan in 2024, and the share is expected to exceed 85% in 2025.
In this case, can Cudi still turn the tables?
Crisis under stalling
After several years of unbridled growth, the new local coffee force has formed a "l2cm" competition pattern. But unlike Luckin, Lucky Coffee and Manner, the fast and hot Cudi has a special mode.
Compared with the other three chain coffee brands to build a first-class chain while running the scale, Cudi's model is to first tell and copy Luckin's "coffee story" to attract associates to get on the bus, rely on low prices to expand the scale all the way, and then tell the "scale story" to attract investment to build the first chain.
However, when it came to the construction of the first chain, because it was Cudi who "saved the game", the delivery and production time was delayed again and again. **According to public reports, according to people familiar with the matter, Cudi is not a wholly-owned chain base, but relies on brand stories to attract all parties to join the factory policy, and at the same time more in-depth businessmen, "asking" them to participate in the construction of the factory together to become partners.
There is no ** chain to support the scale story of Cudi, which directly leads to the fact that after more than a year of conquering the city, although Cudi has run out of the scale of nearly 7,000 stores, those associates who have invested all their money have gradually realized that Cudi has stalled, and its "unique model" may be difficult to run.
Source: Little Red Book.
There are frequent revelations from affiliates on social networks, and Cudi is often unable to negotiate long-term cooperation, resulting in frequent changes in merchants, so there are always various raw materials and materials out of stock in stores. There was a period of time when Cudi's thick breasts were out of stock, just because the new ** business did not negotiate.
As a result, many affiliates who could not make a profit and had no hope of recovering their capital began to stop losses in time, starting a wave of store closures for Cudi. According to the data of the "Blue Book of Chain Catering Brand Store Development Trends in the First Half of 2023" released by GeoQ, in the first half of 2023, Cudi ranked first in the number of stores opened, but the number of store closures also ranked first, of which the number of stores closed from January to October exceeded 300. At the same time, a person familiar with the matter revealed that in December 2023, Cudi estimates that the proportion of store closures will be 10%-15%.
Douyin blogger "Yang Biao Stone Yang" said that a friend of his opened 10 Cudi, and the current situation is that 3 are profitable, 7 are loss-making, and some stores that have not been opened are no longer ready to open again, and are refunding the franchise fee.
Source: Douyin blogger "Yang Biao Stone Yang".
While the "basic disk" is loosening, the old story of Cudi seems to be losing its appeal to the new forces of society. According to the latest store opening data, Cudi added only 173 new stores in December, or back to the initial period of the brand.
For Cudi, "stalling" could be a crisis. Because the affiliates join Cudi because they are optimistic about the business model of low-cost expansion, but the reality of not making money and making it difficult to recover the cost will only make the affiliates accelerate their escape from Cudi in 2024. This is exemplified by the fact that when Cudi introduced new policies such as human-robot collaboration and the sale of health wine, the joint ventures began to collectively rebel against Cudi.
Source: Little Red Book.
In this case, Cudi's 2024 is even more difficult.
Is there any hope for Cudi to turn around?
The current crisis is essentially a chain problem caused by the lack of ** chain. In this case, will Cudi be able to turn the tables against the wind as long as he steps on the brakes of the hurricane and returns to the construction of the ** chain?
The answer may not be optimistic, the lack of Cudi's ** chain causes problems such as materials can't keep up, new products can't be played, and there are always shortages around.
A practical problem that cannot be ignored is that, according to the titanium ** APP report, or due to the tight capital chain, Cudi's cash flow "roll" will not move, and franchisees will be forced to sell wine. It seems that making up the ** chain is a bit "difficult for a good woman to cook without rice".
A franchisee broke the news that Cudi began to settle with ** merchants through bank acceptance drafts in June. And Lu Zhengyao's "black history" and the recent ** new executor also make it difficult for Cudi to easily get a blood bag in the capital market.
In this case, Cudi's funds** can only be found in associates. But Cudi only runs the scale and does not make products, and the associates who have no hope of recovering their costs are afraid that they will not be able to bring nearly 7,000 stores.
Source: Tiger Sniff.
According to industry insiders, Cudi's average daily cup volume is only 157 cups. Under the average, there are more affiliates with more competition for store locations and slow order times.
At the same time, Cudi has to keep up with the subsidy, resulting in the already not rich health bar is almost exhausted. Some affiliates revealed that if they do not do activities, there will be no sales, and if they do activities, the headquarters needs to give subsidies to maintain breakeven.
At a recent meeting of Cudi's associates, Cudi launched a new wave of subsidy policies in order to allow associates to sell health wine. To spend money to subsidize and stabilize the basic market of associates, Cudi's ** chain is afraid that it will be postponed again.
In addition, the ** chain cannot be achieved overnight, and it takes time, capital and experience to precipitate.
According to an interview with Zhang Chenkai, Executive Director of CIC, coffee beans have three characteristics: long chains, high transaction costs and difficult quality control. From the rough processing of coffee to **, it will go through 8 or 9 links. Coffee producers are fragmented, which means that the integration phase requires a significant investment of money and time, managing the origins and farms, baking and packaging at the right time, and real-time visibility into warehousing and logistics to ensure output quality and distribution efficiency.
According to the Future Business Observer, the East China ** chain base built by Cudi has not yet landed. It shows that the construction of the first chain is a thing that cannot "vigorously produce miracles". What's more, Cudi's method of building a ** chain is like building a "grass platform team", which cannot be called "vigorous", let alone a "miracle".
Under such a reality, Cudi cannot rely on the **chain story to attract new associates to enter the game, and Cudi's store expansion speed in 2024 may continue to slow down or even stagnate. At the same time, it is even more worrying in case there is a wave of store closures.
*: Little Red Book.
As the cost of raw materials rises in the future, it will only be more difficult to recover the cost than it is now. In order to survive, some stores have begun to find ways to "throttle", and they have been cut corners.
Recently, a former employee of Cudi has posted on Xiaohongshu to expose a number of problems in his store, including but not limited to: continuing to use materials after they have expired after they have been opened, mixing items, and cutting corners on drinks.
*: Little Red Book.
Such cases have also been complained about on the consumer side, including but not limited to Cudi's production has become less and less, and the materials are getting worse and worse.
This lack of adequate quality assurance may be the result of some affiliates giving up on themselves after being so disappointed with the brand. If Cudi does not pay attention to it and finds a way to give hope to the associates, but allows such cases to continue to increase, Cudi's brand image will inevitably be damaged, and at that time, it will be difficult to turn around.
*|Girlfriend Finance (ID: Girlfriend-Finance).
Written by |Wang Xiaowang.
Kejihui Zhang Zipeng newsmedia007
Kejihui, a pioneer in finance and technology, a senior content team, and 30 online platforms are synchronized. The accuracy and authenticity of the above content is not guaranteed. The market is risky, and investors should be cautious in their transactions. The subject matter involved does not make any recommendations, and the investment and transaction are carried out at your own risk. ）