Who is buying ice cups for 4 yuan?

Why do so many consumers choose to buy expensive ice cups? This article will show you the market situation of ice cups. This article is also recommended for companies or individual business owners.

"3.5 yuan for an ice cup? Are you robbing me?!"

When Jennie first saw an iced cup at the 7-11 convenience store downstairs from her company, she was full of questions. "Thinking back to when I was in school, I always ordered a 'large iced latte without ice' in order to get the so-called bargain at Starbucks. In my opinion, ice cubes are a negative asset. Of course, if you want ice cubes, you can just ask the Starbucks clerk for half a cup of ice. Who would have thought that one day I would need to spend money to buy ice? You know what, this cup of ice is really expensive."

At Lawson, an ice cup containing 160 grams of ice cubes is priced at 3 yuan. This is already a relatively low price for ice cups in convenience stores in first-tier cities. At 7-11, supermarket-owned and Nongfu Spring ice cups are both priced at 3.5 yuan; at Hema, homemade ice cups are priced at 4.9 yuan; and at FamilyMart, the advanced version of the large ice ball-shaped ice cup is sold for 8.9 yuan each.

Spending a few dollars on a cup of ice seems to be a luxury and unnecessary thing in the impression of most people in the past. This also seems to be incompatible with the current main theme of consumption downgrade. But in fact, ice cups are indeed a necessity for many people in summer.

Photo by "New Consumption 101"

Seeing the number of ice cups in convenience store freezers "thriving", and her colleagues going to Lawson to buy ice cups more and more often, Jennie gradually began to accept its existence.

The turning point came on a tiring morning during a working day. When Jennie urgently needed a glass of life-saving water and had a bag of freeze-dried coffee powder in her hand, the ice cup in the convenience store naturally came to her mind.

Pour a bag of freeze-dried powder into a full-ice cup, and in a few seconds, a cup of iced American coffee is ready. After one sip, the heat wave dissipates and the tiredness disappears.

From questioning the ice cup to accepting the ice cup, Jennie slapped herself in the face while joining the ice cup party.

Is ice cup a good business? How did the consumerism of ice cup emerge? What will the major brands compete for in the ice cup market in the future?

1. It’s not an IQ tax

Putting aside the price factor, ice lovers never think that ice cups are a waste of money.

"Drinks with ice and drinks without ice have completely different tastes. Even drinks without ice are not the same as those with ice cubes." Jennie's statement represents the feelings of most people: it is not a waste of money to say that ice cubes can make drinks taste better.

Take the most familiar cola as an example. The combination of ice and water can keep the cola at 0 degrees. Research data has shown that carbonated beverages taste best when the temperature is kept at 1-4 degrees Celsius. At the same time, ice cubes can slowly release the overflow of carbon dioxide in cola, which means that cola with ice cubes is more carbonated. On the contrary, ice cola without ice can easily turn into a bottle of sweet, gasless sugar water as the temperature rises, and the taste is self-evident.

So is there a difference between ice cubes? Yes.

"Ice cubes frozen in ice trays are full of bubbles and melt in ten minutes, while ice cubes frozen by machines do not melt for an hour. The 8.9 yuan ice balls sold by FamilyMart are usually used to drink whiskey, and they are indeed thick and durable." Jennie is now an ice expert. "The ice in beverage shops is also uneven. People generally say that the ice in Mixue Ice City melts very quickly. Starbucks' ice cubes are particularly magical, they are hollow ice. Many people complain that most of the ice drinks in Starbucks are ice cubes, but according to their staff, because it is hollow ice, the actual amount of ice cubes is not as much as it looks. The advantage of hollow ice is that it can be better integrated with the beverage, which has a bonus effect on the icy feeling."

Buying an ice cup and adding a box of milk to make a latte is sometimes not cheaper than just buying a cup of Luckin Coffee for 9.9 yuan.

But this does not prevent young people from tinkering with their lifestyle. The existence of the ice cup allows consumers to add a sense of ritual and DIY fun when drinking happy water, which is indeed in line with the current young people's demand for a sense of life experience.

"I was reluctant before, but now I think it's just a few dollars. If spending a few more dollars can add a little embellishment to life, the cost of getting happiness is actually very low and worth it." Jennie smiled, "What I'm drinking is not an ice cup, but happiness."

2. Next stop: Internet celebrity

Perhaps we can be more optimistic about the future development of ice cups.

Judging from the experience of Japan and South Korea, the booming development of the ice cup industry in China is a foregone conclusion.

According to relevant data from Zhiyanzhan Industry Research Institute, in Japan, the annual consumption of disposable ice cups in convenience stores has reached 2.57 billion cups, and its popularity even surpasses bottled water; in South Korea, ice cups were on the best-selling product rankings of the three large convenience store chains CU, GS25, and 7-11 from 2020 to 2022, and the product with the highest sales ranked second.

In 2019, ice cups finally arrived in China as an imported product. The Chinese market, with a population several times that of Japan and South Korea, is waiting for its strong accumulation to take off.

Ice cups are typical complementary goods in economics. They can be paired with any beverage to promote sales of other items. Coffee, juice, sparkling water, beer, cocktails...almost all the beverages you can think of can be presented in a colorful form in an ice cup. Any beverage added to an ice cup will not feel out of place.

This versatility also means the diversification of consumption scenarios . The attribute of "you can have a cup anytime, anywhere" makes the ice cup, like daily beverages, not restricted to the fixed-point and fixed-quantity model of three meals a day, which becomes the biggest guarantee for its purchase frequency.

Thanks to the merchants' creative ideas, the ice cup industry has evolved into the "ice cup +" industry.

On the Hema menu, cold brew ice cups are quite popular. Add water to make Americano, and add milk to make latte. In addition, there are grape juice, passion fruit juice ice cups, etc. In the future, people's definition of ice cups will not be limited to "a cup of ice", but will extend to more possibilities.

On a track that is not too crowded, what is the most important thing to do in the present?

The answer is: channel.

According to the White Paper on Consumption Trends of Ice Products and Cold Drinks in Instant Retail, ice products and cold drinks are growing faster in instant retail channels and are expected to become iconic categories. In terms of consumer purchasing habits, 45% of respondents most often buy ice products and cold drinks in convenience stores, and "fast" and "keeping ice cold" are two important factors for consumers to choose instant retail.

According to Oliver Wyman's estimates, if the momentum of iced food and beverages at ambient temperature and the increase in instant retail penetration can continue, the market size of iced products and drinks in the instant retail channel is expected to exceed 63 billion yuan in 2026, doubling in four years.

Although this data includes more than just ice cups, it also indirectly proves that ice cups are expected to make a breakthrough in the instant retail channel and achieve a leap in volume. In other words, whoever can occupy a larger share in convenience stores will have the hope of occupying the minds of consumers first.

Whoever controls the channels controls the world. In this regard, the advantages of big brands are obvious.

Nongfu Spring was the first to take action.

In May 2023, Nongfu Spring applied for a patent for a label (ice cup). Compared with the plain-looking convenience store ice cups, Nongfu Spring's ice cups look white, plump, solid and cute. Obviously, Nongfu Spring has put a lot of thought into the ice cups. After the drink is mixed in the cup, the ice cubes are just right on the iceberg drawn on the cup, and the layers of drinks separated by ice cubes have a poetic and landscape feel.

From the perspective of traditional channels, Nongfu Spring imitated the joint sales model of Wahaha, and then gradually developed its own key customer system and secondary distributor system to facilitate the brand to further penetrate the market. In terms of direct sales customers, Nongfu Spring has also won national or regional supermarkets, chain convenience stores, e-commerce platforms, etc. It is not difficult to copy decades of experience to the ice cup category.

In addition, from the product point of view, Nongfu Spring has launched edible ice in addition to ice cups. In other words, both To B and To C customers have become Nongfu Spring's target customer group. In this way, the future channels will not be limited to instant retail, but will form a multi-dimensional system like drinking water.

Currently, in the market, besides Nongfu Spring, Lawson ice cups and 7-11 self-operated ice cups are all under the banner of convenience stores, but they are all backed by food companies, and no big brand can compare with Nongfu Spring. From this point of view, Nongfu Spring's keen sense of business opportunities has once again put it at the forefront of the market.

3. Battle of Big Brands

Although the importance of channel distribution is still the top priority at present, in the era of extreme cost-effectiveness, consumers' demands for ice cups in the future will be the same as those for all retail consumer goods: quality, taste, appearance and price are all indispensable.

Let's first look at quality control, which is divided into two parts: first, whether the ice can melt at a slower rate; second, whether food safety can be guaranteed.

From the perspective of taste and appearance, if we believe that ice cups have the potential to become internet celebrities, then these two points are unavoidable considerations and will also be the watershed between future brands.

How to develop an ice cup that consumers are willing to post Vlogs on social media? The answer to this question will not only determine whether the ice cup SKU can go viral, but also help the brand establish its position in the ice cup industry.

The coffee ice cup needs to be rich and smooth; the juice ice cup needs to have a higher fresh juice content; whether the ice cup is cute and dramatic enough is a test of the brand's R&D capabilities. As for the health attributes of the ice cup, they also need to be put on the agenda.

In South Korea's CU convenience stores, fruit tea bags and hazelnut American coffee in the form of sugar substitutes provide a suitable model for Chinese companies. Ice cups may be able to grab a portion of the coffee or milk tea market share.

CU convenience store fruit ice cup, picture source: Xiaohongshu @魔王久久

The popularity of drinks and cups is similar.

Looking back at how Luckin Coffee turned things around, the emergence of the raw coconut latte played a big role. The oversized straw cups of 1000ml or more represented by the Stanley brand have also been popular on the Internet recently, thanks to the girly color matching and oversized cup size. The future of the ice cup industry also needs the birth of a hit product.

The topic turned to netizens' biggest complaint about ice cups - they are expensive.

Is the ice cup expensive? Frankly speaking, the price of the ice cup is not very friendly. If you calculate that the ice cup costs 4 yuan, you can buy two bottles of 500ml mineral water. The ice capacity in the ice cup may be less than 200g. But such a comparison seems unfair, ice is not the same as water, and the production of ice cups requires even higher costs and safety levels than water.

In fact, there are a lot of substandard ice cubes on the market. For example, tea shops use ice cubes that are either made by filtering water themselves with an ice maker or ordered directly from manufacturers. However, if it is a small tea shop, it is hard to imagine that they would spend a lot of money on water filtration, and if they are not large-scale, it is unlikely to order ice cubes directly from manufacturers. In this way, the problem of excessive bacteria is difficult to solve.

At present, my country has not yet issued national mandatory standards for edible ice. If this market segment is to develop healthily in the long term, the introduction of national standards will be an indispensable part.

On the other hand, the current high price of ice cups is also caused to a certain extent by the imbalance between supply and demand.

For example, as "nature's porter", Nongfu Spring does not worry about water sources, supply chains and economies of scale. It only needs to refine its ice-making process to have a good chance of developing a second growth curve.

This has undoubtedly given strong inspiration to other drinking water brands. I believe it is only a matter of time before brands such as Wahaha and Yilibao quickly follow suit and share the cheese.

When all the giants enter the market, a price war will be inevitable in the new competitive landscape. By then, the ice cup will no longer be the "ice cup assassin". As for the other players, they will once again be caught in an all-out war from the price of the roll to the quality, taste and appearance of the roll.

The current domestic ice cup industry is still a blue ocean, but the huge market demand will ignite competition in the entire track at the fastest acceleration.

And when Nongfu Spring takes the first-mover advantage in the ice cup market as a big brand, other companies will inevitably catch up driven by a sense of crisis of falling behind.

The price war for ice cups is about to begin.

What form will the first truly popular ice cup take and which brand will it be born in? Let's look forward to it together.

Author: Koala is a Deer; Editor: Ge Weiwei

Source: New Retail Business Review (ID: 1089053)