Many people have tried it, too suddenly! Large scale closure of well-known brands

Hangzhou people who love to drink coffee

Perhaps I have heard of Pacific coffee

Although this brand has only a few stores

But it also once became the Chinese market

The second largest coffee chain brand

Second only to Starbucks

However, just recently

Pacific Coffee Exposed for Sale

On one side is the continuously hot coffee track

On one side is the continuous closure of Pacific Coffee

What's wrong with this coffee brand?

Image/@ Pacific Coffee

On August 21st, self media "Food and Beverage Boss Insider" reported that China Resources Entrepreneurship intends to sell coffee chain brand Pacific Coffee, acquired by lemon tea brand Ningji, with an expected transaction amount of 300-50 million yuan.

On the evening of August 21st, a spokesperson for China Resources Entrepreneurship responded to reporters that they would not comment on market rumors. On the evening of August 21st, it was learned that Wang Jie, the founding partner of Ningji, had responded to this matter on WeChat Moments, saying, "We do have an acquisition plan, and the category will be concentrated in the beverage category of chain offline stores, with no size limit. As for whether the acquisition target will ultimately be Pacific Coffee, everything is up to chance."

On the evening of August 21st, a spokesperson for China Resources Entrepreneurship responded by not commenting on market rumors.

Regarding the current business situation of Pacific Coffee, the spokesperson stated that Pacific Coffee is currently the second largest coffee brand in Hong Kong in terms of market share. In recent years, it has actively expanded its food and beverage categories, and the brand has gradually become younger. Last year, it officially launched the Moojoo second brand. In the mainland market, Pacific Coffee has numerous profitable direct operated stores and a wide range of franchise businesses. Through continuous store optimization, Pacific Coffee's profit margin has significantly improved and its profitability is steadily improving.

In the view of Wang Hongdong, the founder of Banbaodian, based on the rumored acquisition price of 300-500 million yuan, the selling price of Pacific Coffee per store is about 1 million yuan, which is not high. He told reporters that from this price, it can be seen that China Resources Entrepreneurship is eager to sell Pacific Coffee.

Large scale store closures

The Pacific coffee around me is disappearing?

Pacific coffee originated in Hong Kong, China

The first store opened in 1992,

2010

China Resources Entrepreneurship, a member company of China Resources Group

In cash of HKD 327 million

Acquired 80% equity of Pacific Coffee

At that time, the number of Pacific Coffee stores in Hong Kong

Almost on par with Starbucks

In April 2011, Pacific Coffee entered the mainland Chinese market and opened its first store in Shanghai. In September 2012, the number of Pacific Coffee stores in mainland China exceeded 100.

From the perception of real life, people find that Pacific coffee is gradually disappearing into the core business districts of big cities. At present, there are 13, 18, 11, and 24 coffee shops in the first tier cities of Beijing, Shanghai, Guangzhou, and Shenzhen in China.

In June of this year, the reporter visited the original site of Pacific Coffee located in the Huaxin Center of Xuhui District. The store has been closed and there are currently no new owners taking over.

In Hangzhou, the reporter searched a certain evaluation website and found that Pacific Coffee, which is still in operation, only has one store at Xiaoshan Airport.

In the past few years

With the continuous emergence of domestic coffee brands

Foreign coffee brands

Continuously entering the Chinese market

In addition, Luckin and others

Continuously lowering the price of freshly ground coffee

The development momentum of Pacific coffee

Obviously not as good as before

In the freshly ground coffee market, people can find more alternatives. In addition to Starbucks and Costa, there are also M stand,% Arabica, blue bottle coffee, etc. If the price drops further, there are Luckin Coffee, Manner, etc.

Pacific Coffee has also made some new explorations, including launching the tea drink brand "Tai Cha" and baking brand LUXE in 2018, and launching the boutique coffee brand Brew Bar in 2019. However, none of these three brands have made significant splash. Currently, Brew Bar has closed its stores, Taicha has one store in Shanghai, and LUXE has only one store in Beijing.

Since the end of last year

Pacific coffee has been exposed one after another

Store closure significantly

According to official data from Pacific Coffee, as of December 2016, there were 457 stores worldwide.

According to data from Narrow Door Restaurant, there are currently 309 Pacific Coffee stores in China, with 265 currently open and 44 currently suspended.

Public information shows that since 2019, the number of new stores opened by Pacific Coffee has been decreasing year by year. In 2019, there were 85 new stores opened, compared to 44 in 2020. By 2023, this number was only 6.

Chinese food industry analyst Zhu Danpeng said, "The biggest problem with Pacific Coffee is that its brand tone cannot support its price positioning. For 30 yuan coffee, people have many choices. Secondly, its scenarios are not very different. The coffee industry has entered a node of internal competition, and Pacific Coffee still adheres to the so-called 'hitting business people' strategy. If Pacific Coffee wants to change and upgrade more than 300 stores simultaneously, it will be too difficult, so the only feasible option now should be to reduce prices."

Who are the possible "acquirers"?

The person rumored to be taking over Pacific Coffee is

Lemon tea brand Ningji

According to the official website, Ningji is a chain tea beverage brand founded on February 8, 2021 in Changsha, Hunan. As of August 21, 2023, Ningji has signed over 1800 stores.

Apart from lemon tea, Ningji has already shown interest in the coffee track. In May 2022, the coffee brand "RUU", fully owned by Ningji, opened its first store in Changsha. However, according to the RUU WeChat official account, as of August, there were only 4 stores of RUU in China.

Regarding Ningji's consideration of acquiring Pacific Coffee, Wang Hongdong believes that Ningji relies on multiple powerful capital. Driven by capital, Ningji is more motivated to run faster and may even go public in the future. Ningji's acquisition of Pacific Coffee can quickly expand its scale in the short term.

Wang Zhendong, Chairman of Shanghai Feiyue Investment Management Co., Ltd., believes that the brand positioning of Pacific Coffee has solidified. When it comes to Pacific Coffee, many people think it is more suitable for business people. If you want to achieve innovation in business models, you first need to change the inherent impression of consumers. In the situation where brand influence has declined, renovating an old brand is even more difficult than building a brand from scratch.

But if Pacific Coffee doesn't make any changes, its profit margin will become very small, with Starbucks, Costa, and M stand positioned at the same price, making it difficult for Pacific Coffee to grab consumers from them.

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