Recently, the price war between Lucky and Cudi is in full swing. Some people think that the most affected should be Lucky. But in fact, when affordable coffee became C in public opinion, the advantages of “lucky coffee,” which has always taken low price as an advantage and high quality as the principle, will only be seen by more and more consumers.

Backed by a strong supply chain, Lucky Coffee has become a representative of affordable coffee, and is regarded by more and more franchisees as one of the franchise options worthy of long-term attention.

Also, due to the popularity of the consumption concept of “reverse consumption” and “the rise of domestic goods,” consumers have returned to rationality and are more pursuing quality-price ratio. Consumers will love whoever can provide a good and cheap cup of coffee.

The only way to achieve “high quality and affordability” is to build a strong supply chain

Sina Finance learned from the Michelle Ice City prospectus that in 2017, Michelle Ice City entered the field of freshly ground coffee to create the brand “Lucky Coffee”. This is a chain brand that mainly focuses on freshly ground coffee. It is a coffee brand wholly operated by Michelle Ice City Co., Ltd. Relying on Michelle Ice City's many years of industry experience, “Lucky Coffee” has a complete industrial chain integrating R&D, production, warehousing and logistics, and operation management to protect the production of a cup of high-quality and affordable coffee.

According to reports, in order to guarantee product quality, “Lucky Coffee” uses Arabica coffee beans for all freshly ground coffee. Its high-quality coffee bean products won the Italian International Coffee Tasting Association (IIAC) Platinum Award 1 time and the Gold Award 19 times in 2022 and 2023.

Additionally, Michelle Ice City has built a large-scale coffee roasting factory. Relying on a strong supply chain, “Lucky Coffee” has also achieved “high quality and affordability”. The freshly ground coffee drinks provided to consumers include classic, popular, and innovative products. The price of core products is usually 5-10 yuan.

In recent years, due to the rapid development of prepared dishes and the maturity of the food industry, the pace of increasing the chain rate of restaurants in China has accelerated, and it has officially entered the franchise stage. However, the franchise model has advantages and disadvantages. It requires potential franchisees to have a unique perspective. Short-term development depends on the team, mid-term development depends on the brand, and long-term development depends on the supply chain.

Compared to friends and merchants on the racetrack, “Lucky Coffee” is backed by Michelle Ice City's strong and mature supply chain system, making it the lightest burden among the current domestic coffee brands. According to information, Daka International Food Co., Ltd., a wholly-owned subsidiary of Michelle Ice City, located in Wenxian County, Henan, is the industry's most comprehensive and large-scale manufacturer of food and beverage ingredients. Supply chain assets such as procurement, production, logistics, warehousing, etc. are all absolute industry leaders. Wenxian Daka International Supply Chain has already been taken to the shrine of the industry. And this is where the engine of the giant ship Michelle Ice City is located.

According to the prospectus of Michelle Ice City, its gross margin for Q3 in 2023 increased by 1.3 pct year-on-year. From the perspective of the first disclosure of the prospectus last year, as the scale of trade procurement increased, the average purchase price of most raw material products was declining, and there is very obvious room for cost reduction.

Furthermore, according to a report published by Insight Consulting, in 2022, the scale of the freshly ground coffee industry was 134.8 billion yuan, and it will maintain a compound annual growth rate of 21.2% in the future, while the compound annual growth rate of freshly made tea is 18.3%. Sina Finance believes that the coffee industry is likely to overtake tea in the future.

Data from Ai Media Consulting also shows that in 2025, the size of China's coffee market will reach 1 trillion yuan. This market size can accommodate more high-quality brands.

Finally, from the perspective of team genetics, Lucky Coffee not only relies on the Michelle supply chain, but also on Michelle's mature team. The results of the past 20 years prove that this is almost the most patient team in the country. It took 23 years for Michelle Ice City to break through 10,000 stores; from 10,000 to 30,000, it only took less than three years. Seen from this perspective, it is only a matter of time before “Lucky Coffee” is scaled up.

The coffee circuit has been “playing” for so long, what is the key to victory?

Sina Finance has learned that the business philosophy of “Lucky Coffee”: happy for the near, come from afar; striver-based, customer-centered. In its view, people nearby are happy, and people from afar come naturally. Struggling partners are a fundamental and foundation, and customer satisfaction is the goal and direction of “Lucky Coffee.”

However, this is clearly not an empty statement. The business philosophy of “Lucky Coffee” is reflected in the company's daily operations. It mentions “strivers-based”. “Lucky Coffee” daily introduces various support actions such as free franchise fees, reduced raw material prices, free promotional materials totaling millions, gifts of neighboring Xiaobao cups, inviting popular actress “Ju Jingyi” to endorse popular actress “Ju Jingyi”, and the company takes the lead in communicating with Meituan to reduce the franchisee's rate.

On the coffee circuit, it's not uncommon for companies to “cut chives” and thunder. Under such circumstances, it is even more prominent that “lucky coffee” is one of the high-quality targets worth paying attention to for a long time. After all, it is only a matter of time before Lucky Coffee is scaled up.

In fact, if it weren't for the “price war” between Lucky and Cudi, people would have postponed realizing that Lucky, which once threatened to bid against Starbucks, has undergone a radical transformation in its business strategy. The fourth consumer era is booming. According to media reviews, the two major new consumer trends in 2024 are “reverse consumption” and “the rise of domestic goods.”

As a result, the “price war” also showed players in the industry that consumers are returning to rationality. Sina Finance believes that as a consumer product that is about to be needed, coffee is as price sensitive as milk tea.

In this “price war,” it may seem like there is only a battle between two brands, but in fact, none of the affordable coffee brands have been spared from entering the “price street war.” Some people say that the Riku war hurt Lucky Coffee; others think that within the price, the one with the most capital to eat melons is also Lucky Coffee.

The author believes that from the early takeout subsidy war to the later online car-hailing money war, it seems that the infrastructure circuit will always end in a fierce battle. Meituan won, and so did Didi. The platform company became the winner by throwing money through the front end.

But the consumer circuit doesn't follow the same logic. After all, what consumers are most concerned about is not the brand, but “voting with their feet”. Whoever can provide the best cup of coffee at the best price can get the most market share. As a result, at the end of the coffee circuit, it was still the supply chain, market space, and team genes.