The growth rate of the new tea beverage market has slowed down

In the investment and financing market, it is
becoming more and more difficult for new tea brands to make money.
In this context, lowering the price of main products and opening up franchise business to a limited extent have become the only means
for high-end tea brands to expand consumer groups and improve their own profitability.
Recently, Heytea announced the opening of franchise business, which attracted market attention
.
Some insiders believe that this is a helpless move
for high-end tea brands to accelerate the "downward erosion" of the market share of low-end tea drinks after the rapid decline in stock prices and valuations.
The chain industry can achieve rapid expansion by joining the franchise, but it will also bring sequelae, and the tea brand headquarters should strengthen the management of the franchised stores to ensure product quality and ensure food safety
.

Price dip Market sinks

In the past two years, high-end tea brands such as Heytea and Naixue have all lowered the prices
of their main products.
At present, it is not difficult to find that whether it is Heytea or Naixue, the price of most tea products is within
20 yuan.
This year, the two high-end tea brands have successively launched 9.
9 yuan coffee and tea drink items, further reducing
the consumption threshold.
However, this move has also made the tea brands that were originally positioned as low-end and have taken strong competitive measures
.
Previously, well-known tea brands such as Michelle Ice City and Guming mainly adopted the franchise model and achieved good "results"
in the sinking market.
Industry insiders believe that the gradual decline in the price of high-end tea brands, and even the opening of franchise business and self-lowering "value" to compete in the sinking market will bring more changes
to the already competitive new tea market.

From 2016 to 2021, with the help of capital, the new tea beverage industry entered a golden 5 years
of blindfolded and rapid development.
Among them, high-end tea brands based on the direct operation model have become the sweet potatoes
of investment and financing institutions.
Heytea, which officially changed its name in 2016, is estimated to have reached 9 billion yuan
in 2019.
In 2021, more data shows that its valuation after financing is as high as 60 billion yuan; Naixue's tea, founded in 2015, is currently valued at about 35-40 billion yuan
.

According to public information, at present, the tea brands Nai Xue's tea and Lele tea, which are at the same price as Heytea, are not open to join
for the time being.
Among the milk tea brands that are open to franchise, the joining fees of provincial capitals, prefecture-level and county-level cities of Michelle Ice City are 11,000 yuan, 9,000 yuan and 7,000 yuan respectively, and the total cost is expected to start from 370,000 yuan; Guming's upfront budget excluding store rent and transfer fees starts from 280,000 yuan; Excluding the comprehensive operation service fee, the total cost of Chabaidao is expected to be nearly 300,000 yuan
.

According to the content of the announcement of Heytea, the cost related to the start-up capital is less than 500,000 yuan, which is slightly higher
than that of brands that have opened to join.
In addition, Heytea also requires business partners to provide proof of legal cash or equivalent realizable assets of more than 1 million yuan, and independently invest in stores, and provide reasonable asset flow to prove that the funds come from personal accumulation and not investment by others
.
The reference of the franchise store type provided by Heytea is the stores it has opened in non-first-tier cities such as Zhongshan, Jingjiang and Yichang this year, and the store area is basically within
50 square meters.
Compared with the directly operated stores of nearly 200 square meters, this reference area has obviously made new adjustments to the business partnership model, and also tends to locate
in non-first-tier cities.

Joining can further increase the valuation of the brand

According to the "New Consumer Industry Investment and Financing Trend Report in the First Half of 2022" released by the Moose Consumption Research Institute, a total of 30 financing events occurred in China's coffee and tea drinking tracks, with a total financing of 3.
194 billion yuan
.

Compared with the same period last year, although there was only one less financing event, the total amount of financing decreased by 63.
8%
compared with 8.
845 billion yuan in the same period last year.
In other words, in the investment and financing market, it is
becoming more and more difficult for new tea brands to make money.
In this context, lowering the price of the main products and opening up the franchise business to a limited extent have become the only means
for high-end tea brands to expand their consumer groups and improve their profitability.

According to the "2021 New Tea Beverage Research Report" released by the China Chain Store and Franchise Association, from 2017 to 2020, the scale of China's new tea beverage market revenue increased from 42.
2 billion yuan to 83.
1 billion yuan, and is expected to reach 142.
8 billion yuan
in 2023.
However, the report also pointed out that the market growth rate of new tea drinks in 2021 has slowed down from 26.
1% in 2020 to 19%.

In the next two or three years, the growth rate of the new tea beverage market will slow down to 10%-15% in stages, which shows that the new tea drink has passed the peak period of market growth, and some cities have entered the stage of "excessive competition
".

"At present, the tea market in non-first-tier cities is mainly occupied by low-end brands, and their consumers are relatively more concerned about cost performance, and high-end brands can consider developing new products
for the needs and consumption capacity of non-first-tier markets.
" Li Xinyi, a consultant in the brand retail industry of Analysys, believes that the opening of head tea brands to non-first-tier cities can not only meet the needs of consumers in non-first-tier cities with the help of the head brand effect, but also help the mall effectively attract customer flow, but also make business adjustments
that meet the characteristics of the market.
Industry insiders also believe that compared with the direct operation model, tea beverage enterprises can mobilize social resources more quickly to achieve scale after opening up, thereby helping enterprises obtain higher market share in the same period of competition and further increase the valuation
of brands.
The opening of Heytea to target the layout of non-first-tier cities is also to see the strong consumption potential
of non-first-tier cities, especially the sinking market.

At present, there are nearly 7,000 stores nationwide, mainly distributed in more than 160 prefecture-level cities
in 18 provinces including Zhejiang, Fujian, Jiangxi and Hubei.
"Whether a drink can be popular or not, whether it can form a repurchase, the key lies in the product itself
.
" The relevant person in charge of Guming said that the new product involves the cooperation of R&D team, raw material procurement, logistics supply chain, store training and supervision, and after-sales service, and only by doing a good job in each link can we effectively protect the legitimate rights and interests
of consumers.
Zhu Danpeng, an analyst in the Chinese food industry, said that from the perspective of food safety, the more franchised stores, the more difficult it is to supervise the quality internal control system
.
Therefore, the headquarters of tea brands should strengthen the management of franchised stores in order to ensure product quality and ensure food safety
.

(Luo Chen, comprehensive arrangement)

China Food News (December 05, 2022, Version 07).

(Responsible editor: Luo Chen)