1. Mixue(蜜雪冰城) Doubles Down on Lucky Cup with Major Investment
The parent company of Mixue(蜜雪冰城) outlined a substantial investment roadmap for its coffee chain, Lucky Cup, during a recent performance briefing. The plan for 2026 prioritizes revenue per store over rapid unit growth, with a sharp focus on penetrating high-tier cities.
To support this strategy, the company has allocated CNY 500 million in subsidies for franchisees, an additional CNY 300 million for brand marketing and digital upgrades like its mini-program, and CNY 200 million for store equipment and technological enhancements. This initiative is part of a larger strategic investment of CNY 1.8 to 2.0 billion, which will also see CNY 1.4 billion dedicated to an in-depth overhaul of its domestic supply chain, signaling a long-term commitment to operational efficiency.
2. Nayuki(奈雪的茶) Reports Narrowed Losses Amid Store Portfolio Restructuring
Nayuki(奈雪的茶) released its 2025 annual results, revealing a strategic recalibration of its store network. The company reported total revenue of CNY 4.33 billion, a 12% decrease year-over-year, while its adjusted net loss narrowed significantly by 73.8% to CNY 240.5 million.
The financial results reflect a clear shift in physical footprint: the number of directly operated stores dropped by 165 to 1,288, while franchise locations increased modestly by 13 to 358. This data underscores the brand’s ongoing transition towards a more asset-light operational model to improve its bottom line.
3. Luckin Coffee(瑞幸咖啡) and Blue Bottle(蓝瓶咖啡) Launch Strategic Product Innovations
In product news, Luckin Coffee(瑞幸咖啡) introduced “A Whole Fresh Coconut,” a limited-edition item commemorating the fifth anniversary of its Coconut Latte. With only 1.88 million units available exclusively for in-store pickup, the launch leverages scarcity to drive immediate foot traffic.
Separately, Blue Bottle(蓝瓶咖啡) announced a notable collaboration with Nespresso, the premium capsule coffee brand under the Nestlé group. The partnership will yield a co-branded coffee machine and two exclusive coffee blends, bridging the gap between specialty café culture and the high-end home brewing market.
4. Selective Store Closures Point to Ongoing Market Rationalization
Several brands executed strategic store closures this week, signaling a continued focus on optimizing location profitability. Heytea(喜茶) closed its first store in Xiangtan, which opened in 2023, though it continues to operate four other locations in the city.
Similarly, COSTA COFFEE shuttered a location in Tianjin’s Hedong district, while Tim Hortons closed a store in Huizhou. These moves suggest a broader industry trend where brands are carefully pruning their portfolios to focus resources on higher-performing locations.
5. COSTA COFFEE Launches New Flavor Series Amid Portfolio Buzz
COSTA COFFEE introduced two new product lines to energize its spring menu. The new offerings include a Lemon Basque-inspired series, featuring a Spanish-style latte and a milk tea, alongside a Waxberry Longjing tea series, which includes an Americano and a jasmine-infused tea blend.
This product push comes as international investors circle a major stake in its parent company’s premium water business. Reports indicate that private equity firms CD&R, KKR, and PAI have advanced to the next round of negotiations to acquire a 50% stake in the division housing Perrier and SanPellegrino, a deal that could value the business at approximately EUR 5 billion.
6. Marketing Activity Diverges as Brands Compete for Consumer Mindshare
February’s marketing data revealed a clear divergence in promotional intensity among major tea chains. Auntea Jenny(沪上阿姨) led the pack with 10 distinct marketing campaigns, followed by NO YEYE NO TEA(爷爷不泡茶) with nine, while CHAGEE(霸王茶姬), YH.Tang(益禾堂), and LINLEE(林里) each executed seven.
This high level of activity at the top contrasts with quieter periods for other brands, highlighting how operators are using aggressive, frequent promotions to maintain relevance and drive sales in a crowded market environment.
