Scenes + surroundings, a differentiating tool for coffee brands

Nowadays, with more and more new brands entering the market, competition in the coffee field is becoming increasingly fierce. If coffee brands want to cater to the needs of young people, they must differentiate their brands through innovative scenarios and products. This article analyzes the development model of coffee brands in detail. Those who are interested can take a look.

In the past 2022, the coffee market was in a hot state. With more and more emerging brands entering the market and the strong crossover of "giants" from other fields, the competition in the coffee market has become increasingly fierce.

As the share of the coffee market continues to be divided, capital has begun to treat investment in coffee brands more cautiously. According to data from New Consumption Daily, a total of 28 coffee brands received financing in 2022, with an amount of approximately 1.27 billion yuan (12 rounds of undisclosed amounts), and the amount of financing fell by about 80%.

Amid fierce competition, many coffee brands have begun to expand their business boundaries. From small pubs to trendy peripherals, a series of fancy products and marketing methods have attracted consumers' attention.

01 Drinking during the day and drinking at night, “morning and evening” control young people

"Coffee in the morning to keep alive, alcohol at night to help you sleep" is the lifestyle of many young people today. This makes the combination of coffee and alcohol a supplement to business growth and gradually becomes the second growth curve of coffee brands.

The first move of Tims after going public was to open two Tims "Coffee & Beer" stores in Shanghai. In addition to its original coffee products, the new stores also offer 31 types of beer and snacks.

Wang Zhendong, chairman of Shanghai Feiyue Investment Management Co., Ltd., said in an interview: "The fundamental reason why Tims adopts the model of coffee during the day and wine at night is that the effective business hours of coffee shops are relatively fixed every day, so they hope to extend the effective business hours by selling light meals and wine products, thereby increasing store revenue."

Ultimately, Tims hopes to meet diversified needs in a multi-time manner and gain new traffic dividends. At night, consumers tend to consider the impact of caffeine and do not buy coffee products, so there are few pure coffee shops that are open at night. The addition of alcoholic beverages not only enriches the product range but also improves the efficiency of coffee shops.

The target audiences of both daytime coffee and nighttime drinking are young people, but they meet the needs of the same audience at different time periods. For example, young people need to refresh themselves during the daytime at work, and need to relax after get off work at night, so this business model just meets the different consumption scenarios of young people. The combination of the two is an efficient exploration of new needs of existing consumer groups.

However, this seemingly simple increase in the number of product skus is the result of two completely different supply chains and environments. It is very difficult to ensure the synchronous operation of these two business formats.

First of all, the "Daytime Coffee, Nighttime Bartender" business model requires more compound talents. Making coffee and bartending are two completely different framework systems. Under the "Daytime Coffee, Nighttime Bartender" model, both bartenders and baristas need to be "multi-talented", but there are not many people who can switch between the two positions.

Secondly, coffee and wine are both experiential consumption with themes, rather than simple catering consumption. Coffee shops pursue warmth and comfort, while taverns are relatively private and romantic places. The two are completely different in creating store environments. If you simply pursue the increase in the number of products while ignoring the adjustment of the environment, it is difficult to ensure the user stickiness of target consumers. After all, they can choose more professional and atmospheric taverns.

More importantly, many professional coffee brands do not have a beverage supply chain system, and even if they do, it is difficult to standardize their products. Take Starbucks as an example. The taste and quality of the brand's coffee products are the same in every store. If you want to open a pub, you need to be able to replicate products on a large scale, which places very high demands on the product supply chain and the bartenders in each store, and it is almost impossible to achieve.

Overall, the model of day coffee and night wine has its own unique advantages in product expansion and revenue growth. However, due to environmental differentiation, lack of talent, incomplete supply chain and other issues, the brand still needs to balance the relationship between the two business models and avoid blindly following the trend.

02 Coffee peripherals, breaking into the lifestyle of young people

For coffee brands, making peripheral products seems to be an easier and more cost-effective option than building new scenes and opening up supply chains.

In the production and drinking of coffee, many hardware products are used, the most common of which include cups, hand-brewed pots, etc. The production of these products is not difficult, and it is easy for brands to reach cooperation with relevant OEM factories. In addition, coffee represents a lifestyle for young people. At present, coffee peripherals have gradually radiated to other living spaces. Products for pets, homes, travel and other scenarios have also become the direction for coffee brands to create peripherals.

For coffee brands, creating peripheral products has two core advantages: one is to derive a new product line and increase the brand's revenue; the other is to convey the brand's life philosophy and attach importance to the publicity and marketing value of peripheral products. In comparison, the latter is obviously more important.

A typical example is Starbucks. From designing its own coffee cups, kettles and other products, to creating phenomenal IPs such as the "Cat Paw Cup", to launching card bags in collaboration with trendy brands such as DIESEL, Starbucks peripherals have penetrated into the hearts of consumers and become a profound brand symbol.

Now when you open the Starbucks app or WeChat applet, you will find that there are already hundreds of products in the "Coffee Lifestyle" section. Consumers can choose to have their products delivered to their homes or pick them up in-store. It has become a complete and independent product line. The most popular product in the Starbucks Douyin flagship store is not coffee but cups. Peripheral products have actually brought sales and revenue to the brand.

The picture shows a screenshot of the Starbucks Douyin flagship store

At the same time, peripheral products can help consumers generate and trigger brand memories. Even if consumers are outside of the consumption scene, at home or in the office, a peripheral product with brand culture will constantly remind consumers of the brand's existence, allowing consumers to feel the brand's value in their daily lives and shorten the distance between consumers and the brand.

Of course, there are still some factors that brands cannot ignore when creating product peripherals.

First of all, the quality of the product must be up to standard. After consumers purchase peripheral products, if the peripheral products themselves have good quality, they can arouse consumers' favor and trust in the brand, thereby establishing awareness of the brand's quality. On the contrary, if the products created by the brand have quality problems, the user trust that the brand has built over a long period of time will gradually disappear, affecting the brand's main business, which is not worth the loss.

In addition, the continued popularity of peripheral products is inseparable from the promotion of various channels. In terms of communication content, brands can leverage marketing to give peripheral products unique meanings and form a unique product IP for the brand.

For example, Blue Bottle, a brand known as the "Apple of the coffee world", has a unique blue bottle logo that has become the brand's iconic IP. There are a lot of product exposure and evaluation content about the brand on Xiaohongshu and Weibo. Coffee cups, canvas bags, brand books and other peripheral products have become collectibles for brand fans, and many consumers will choose to collect all the series of products. User stickiness and brand culture have already been formed.

The picture shows a screenshot of the Blue Bottle applet. Source: Internet

Most coffee brands create peripheral products to bring added value to the brand through creative means, so that the brand can penetrate into the daily life scenes of young people. In the process of creating peripheral products, the brand should incorporate creativity and ideas based on the aesthetics of young people and the brand culture, so as to enhance the brand's value recognition and strengthen the brand influence.

03 Differentiation of scenarios and products is the key

Nowadays, competition in the coffee industry is becoming increasingly fierce, and brand differentiation through innovative scenarios and products has become the focus of coffee brands.

Whether it is expanding the business model or creating peripheral products, the way for coffee brands to explore the second growth curve is to create more life-like scenes and products, so as to enter the lives of more young people.

Brands need to re-examine their development strategies, discover their own uniqueness, avoid following trends, and build brand power based on their products in order to differentiate themselves in the involuted coffee market and seize a certain market share.

Author: Dake

Source: Marketing Kanke (ID: yingxiaokanke), a public account of Clour, focusing on new media, social media, platforms, brands, and KOL marketing case analysis