Soy sauce latte, that’s it?

Jiangxiang Latte is a hit! The topic has even spread overseas, and Luckin Coffee’s marketing strategy has once again gone viral. This article describes the relevant content and I hope it will be helpful to you.

On September 4, Luckin Coffee launched the "Soy Sauce Latte" jointly launched with Moutai. Compared with the "9.9 yuan" coffee on the street, a cup of Soy Sauce Latte is still 19.9 yuan after discount, which is not very surprising for a new product.

But this did not affect consumers' enthusiasm for "explosive purchases" of sauce-flavored lattes. On the day the new product was launched, many consumers in Beijing, Shanghai and other places told Value Planet that on the Luckin mini program, the sauce-flavored lattes in many nearby stores were sold out, and "you can't buy them even if you want to."

Although the sauce-flavored latte is only sold in the Chinese market, the topic has even spread overseas. A wave of "sharing pictures" on Thai social media has aroused the strong interest of Thai netizens to try it. "I really want to try it" and "I hope it can be sold in Thailand", Thai netizens left comments one after another.

The Jiangxiang Latte not only has an amazing traffic influence, but also has the best sales in Luckin Coffee's history. On the first day of the product launch, even though many consumers failed to successfully place orders to try it out, the sales data was still amazing. On September 5, Luckin Coffee announced the first-day sales results of the new Jiangxiang Latte: 5.42 million cups were sold, with sales exceeding 100 million yuan.

This figure broke Luckin's previous single product sales record, but compared with the rave reviews for Luckin's previous innovative products such as Coconut Cloud Latte, consumers' evaluation of the Soy Sauce Latte was polarized this time - those who liked it couldn't put it down, while those who didn't like it said it was hard to swallow.

For Moutai, the partnership with Luckin Coffee is seen as another new attempt to rejuvenate the brand. Last year, Moutai launched the iMoutai online purchase program and cooperated with Mengniu to launch Moutai ice cream. And there are reports that Moutai will also focus on products such as liquor-filled chocolate in the future to further expand the younger market.

Why did Moutai choose the popular coffee brand Luckin? Why does Moutai, which has no worries about sales, also actively expand the young market? After placing an order for the first cup of Maotai latte, where is the "second cup" of Moutai for young people?

Image source: Weibo @Well-known Youth Xiaoxin

1. Wine + coffee, polarized reviews

"How should I put it? The taste of alcohol in the Maotai Latte reminds me of the alcohol my grandma used to apply on my body when I had a fever when I was a child." This is the comment made by consumer Xiao Nan, who placed an order for the Maotai Latte as soon as it was launched to try it out.

That morning, on the way to work, Xiao Nan saw the posters of the new joint product of Luckin Coffee and Moutai that were spontaneously circulated among his colleagues, and his colleagues all expressed their desire to "have afternoon tea".

"For the entire morning, my circle of friends was flooded with various posts showing people checking in for their soy-flavored lattes. I have to say that Luckin's new product has a really great social influence," said Xiao Nan.

So she quickly followed suit and ordered one, and luckily the ordering process went very smoothly. "I only found out later that many places were out of stock that day," Xiaonan said.

A Fei, who works at Beijing World Trade Center, failed to get the long-awaited cup of sauce-flavored latte; Xiao Lou, who lives in Shenyang, even had to queue for two hours on the second day of the new product launch before he could pick up and drink this cup of latte that frequently appeared on hot searches.

However, as one of the first consumers to try the sauce-flavored latte, Xiao Nan was not impressed by its taste. "Maybe it's because I don't like drinking white wine. I think it tastes like melted chocolate with a lot of milk, and I feel a little nauseous and have a stomachache after drinking it."

Maotai lover Linlin also did not give a high evaluation of this sauce-flavored latte. "It tastes a bit like Baileys, you can't taste the coffee flavor, and it will be very greasy if you drink too much."

Xinxin, who chose the hot drink, said: "As soon as I opened the lid, I could smell the alcohol. I took a sip and it felt good, but it didn't taste like coffee. It was more like a flavored drink."

As the popularity of the Soy Sauce Latte soared on the first day of its launch, various doubts also came up: some people suspected that the taste of alcohol in the Soy Sauce Latte was "technology and hard work", and said that this would be Luckin's fastest new product to fail; others questioned whether pregnant women and drivers could drink this cup of coffee.

However, the polarized reviews and many doubts did not affect the hot sales of Jiangxiang Latte. On September 5, Luckin Coffee said that 5.42 million cups of Jiangxiang Latte were sold on the first day of its launch, with sales exceeding 100 million yuan.

This sales volume far exceeds Luckin Coffee's once popular product "Raw Coconut Latte". Data shows that the Raw Coconut Latte, which caused consumers to rush to buy and was once out of stock, sold more than 6.66 million cups in the first week of its launch.

Luckin Coffee, which won the business, also won the publicity. Zhu Danpeng, a Chinese food industry analyst, posted on WeChat Moments jokingly that he received more than 50 media interview invitations about Luckin Coffee's sauce-flavored latte on the 4th.

This wave of collaborations not only aroused consumers’ curiosity, but also attracted public relations, designers, and media to join in the fun, becoming Luckin’s “tap water” publicity traffic.

UI designer Xiaohua told Value Planet that designers pay close attention to the packaging, slogans, marketing, etc. of the brand co-branding. "In the past two days, our designer group has also been placing orders to see how the new product design is done. But to be honest, I don't think the overall color, packaging, and stickers are very sincere. Compared with the overall light blue design of Coconut Cloud Latte, the combination of blue and red is a bit stiff, the combination of the hot drink cup sleeve and the cup body is not harmonious, and the stickers' graphics and texts are not very surprising. However, the brand co-branding must greatly respect the red color of the Moutai brand itself, so it is understandable that there is limited room for creativity."

Advertising practitioner Xiao Lou said that this collaboration is a strong alliance with locked resources, and Luckin and Moutai are running in both directions and empowering each other.

"The purpose of this wave of activities by Moutai is obviously to make the brand younger. In today's food market, nothing can impress young people more than creative coffee while maintaining the brand style of Moutai. For Luckin Coffee, this joint venture can reflect its brand influence. Selling products with high brand premium at low prices will help further upgrade its brand." Xiao Lou said.

2. Moutai is more "lively" and younger

The collaboration with Luckin Coffee is not Moutai’s first attempt to become younger, nor will it be the last.

In May last year, Moutai and Mengniu jointly launched Moutai ice cream, which also attracted a lot of public attention.

Ding Xiongjun, Party Secretary and Chairman of Moutai Group, revealed at the 2023 Market Work Conference that Moutai ice cream is expected to achieve revenue of 262 million yuan in 2022. According to Kweichow Moutai's 2023 semi-annual report, the hotel business and Moutai ice cream business had revenue of 220 million yuan.

In July this year, Moutai completed the trademark registration of "Moutai Xiaoka", which led to the outside world believing that it intended to grab a share of the hot coffee market. At the event celebrating the first anniversary of Moutai ice cream this year, Ding Xiongjun also said that Kweichow Moutai will increase the research and development of products such as chocolate with alcohol, alcoholic drinks, bars, and soft ice.

Compared with Moutai liquor which costs tens of thousands of yuan per bottle, young people who cannot afford Moutai have more and more Moutai products to choose from, which shows Moutai's determination to attract younger people.

So, as a product with strong "hard currency" attributes, why does Moutai also target the young market?

There may be two main reasons. The first is that Moutai's sales growth has slowed down in recent years, and the second is that young people's demand and preference for liquor are changing.

Judging from Moutai's financial data, the overall revenue growth rate slowed down from more than 50% in 2017 to the range of 10% to 15%, until the revenue growth rate rebounded to 16.53% last year. This is mainly due to the increase in the sales of Feitian Moutai and the launch of iMoutai. According to data from Zhongtai Securities, iMoutai was launched in March last year and achieved 4.6 billion yuan in revenue by July.

Data source: Eastmoney

In fact, the launch of iMoutai also caters to the shopping habits of young people. As the post-90s generation gradually enters middle age and becomes the main force of consumption, the preferences of Moutai's potential consumer groups are changing.

According to iResearch Consulting, young people aged 18 to 29 have a trend of "focusing on the scene and ignoring consumption" in their demand for liquor. That is, they will order a glass of not very expensive liquor in a high-end restaurant, focusing on the "drinking atmosphere".

Sen Sen, a consumer born in 1995, is a typical example of the "atmosphere group". "To be honest, I don't really know much about the flavor of sauce-flavored liquor or the craftsmanship of liquor. If I'm giving it as a gift, I'll of course choose the best brand within my means. But if I'm drinking it myself, I'd rather go to an open-air restaurant and drink some slightly alcoholic 'sweet drink', which will relax me and not make me feel sick."

Young consumers like Sen Sen are not uncommon. From the statistics of online sales of liquor from Q2 2021 to Q1 2022, it can be seen that Maotai-flavor liquor is still the largest flavor type in online sales, but the online sales growth of low-alcohol and niche flavor types represented by Fengxiang, Fuyuxiang and Mixed Xiang almost exceeds that of Maotai-flavor liquor.

Image source: iResearch

Therefore, in order to cater to the changes in consumer demand and consumption scenarios, Moutai still needs to market to the younger generation. In addition, catering to the development of technology and the times, the upgraded marketing model is also a way for Moutai to expand its sales channels.

Moutai's traditional sales channels are mainly self-operated stores and offline agents, which are inconsistent with the online shopping habits of young people today. Moutai's youth-oriented products can be launched online one after another, so as to reach young consumers and further expand sales channels.

3. Where is the “second cup” of Moutai?

The slogan of Maotai-flavored latte is "Young people's first cup of Maotai", so will young people order the "second cup of Maotai"?

When asked why he doesn't buy Moutai, Xiao Nan explained: "There are two aspects. For my own drinking, it's because I don't like the taste of white wine. For gifts, if I don't buy base wine, it's always a little bit off for elders, and they pay attention to the year, etc. On the one hand, it's easy to buy the wrong one, and on the other hand, the cost is also very high. It's better to choose some slightly niche wines. For example, I spent 1,200 yuan to buy a bottle of Yamazaki at a dinner party invited by an elder. Japanese whiskey has been popular in recent years, and the price is affordable for gifts, and there are not too many details."

Vivian is also confused. "As a post-90s, I don't know much about wine, especially white wine. When it comes to gifts, Moutai is of course the first choice in terms of brand. But my concern is that the elders and leaders I give it to may know more about Moutai than I do. If I buy something that is not so exquisite and has a low cost-performance ratio, it will give people the impression that I am showing off my skills before an expert. So, it's not that I don't want to give it as a gift, but I'm a little afraid to do it."

Xiaonan and Vivian's views seem to represent the impression of some young people on Moutai. In their minds, Moutai is more of a gift or even a financial product than a beverage.

"Either buy a bottle of Moutai to collect, or buy a Moutai stock to hold for a long time." In the minds of young people, Moutai seems to be increasingly detached from the essence of "wine."

From the perspective of returning to the essence, Moutai's current marketing seems to be insufficient. From coffee to ice cream to chocolate, they are all lower-priced products that are easier to reach young consumers. They can increase the frequency and channels for young people to reach Moutai's brand and products, but they may not necessarily make young people really interested in Moutai itself.

"Wine is not just a drink, it's also a culture," Xiao Lou said. "For example, as a Northeasterner, we still know the old Snow brand even though it's not widely promoted on the market, because we've heard adults talk about how they used to drink the old Snow brand since we were little."

Xiao Lou said that more than a decade ago, people were popular drinking red wine, and in recent years people have started drinking craft beer. However, most consumers who followed the trend actually have little understanding of the craftsmanship and taste, and they value the social attributes more.

In terms of its social attributes, Moutai gives young people the impression that it is more associated with business and high-end scenarios, rather than relaxed and entertaining consumption scenarios, which reduces the possibility of young people choosing Moutai.

Therefore, Xiao Lou believes that in addition to the current creative products, Moutai can also try to launch new products with small packaging, lower prices, lower alcohol content, good looks and easy to spread. "Because Moutai's problem has never been a lack of popularity, but a lack of young wine products."

In the early stages, co-branding may seem more beneficial to partners, and the gross profit margin of innovative products is not as good as that of base liquor, but brand rejuvenation is a long-term task that requires persistence, and old brands can only last if they capture the minds of the next generation of young consumers.

Author: Salad Sauce, Editor: Machi

Source: Public Account: Value Planet (ID: ValuePlanet), discovering company value and telling capital stories.