In a strategic business move, Luckin Coffee, China’s answer to Starbucks, entered into an alliance with the country’s top liquor brand, Kweichow Moutai. This marked a significant moment in the retail world, with Luckin being the first Chinese coffee retailer to form such a partnership with the liquor behemoth.
Coinciding with the announcement of this collaboration, Luckin unveiled its inaugural alcoholic coffee beverage named Jiangxiang Latte. The drink made waves across the nation, becoming an instant online sensation. As soon as it hit the shelves of Luckin outlets, it witnessed unparalleled demand, leading to long lines in stores and extended waiting periods for online purchases.
The latte has a unique blend, with each serving incorporating Moutai, renowned for its high alcohol content of 53%. However, the actual alcoholic strength of the Jiangxiang Latte remains relatively mild, under 0.5%. This blending created a taste that many described as aromatic, capturing the essence of Moutai yet being gentler than traditional liquors. The subtlety surprised many, with several customers commending the refreshing twist.
However, like all new innovations, the Jiangxiang Latte had its share of critics. Some coffee aficionados, such as Pei Yin, a young Beijing resident, expressed a lack of enthusiasm for the alcoholic touch.
Keeping up with the promotional spirit, Luckin set the price of Jiangxiang Latte at an affordable 19 yuan (approximately $2.62). Special incentives, like collectible stickers, were introduced for those buying multiple cups. The overwhelming response was evident as some locations reported stockouts mere hours post-launch. Adding to the product’s fame, it grossed over 10 million yuan in just four hours during a live session on the popular video platform Douyin.
Conversations around the latte dominated China’s digital realm, especially on the prominent social media platform, Sina Weibo. Over 110 million views and innumerable discussions were recorded in a short span. Still, amidst the appreciation, a growing concern arose about the potential implications of driving post-consumption. Reports of users feeling lightheaded post-consumption intensified these worries. Addressing the public’s anxiety, Luckin advised certain groups, including minors, pregnant individuals, drivers, and those allergic to alcohol, to choose non-alcoholic options.
For context, regulations specify that blood alcohol levels exceeding 20 mg/100 ml are categorized as driving under the influence.
On the financial front, Luckin Coffee has been witnessing an upward trajectory. Their second-quarter net revenue reached a staggering 6.201 billion yuan, indicating an 88% growth year-on-year. This impressive figure surpasses Starbucks’ financials for the same period.
Interestingly, Kweichow Moutai’s exploration into non-traditional segments isn’t novel. Aiming to resonate with the younger demographic, Moutai had earlier paired up with Mengniu to develop an ice cream infused with its signature liquor. This venture too experienced immense success, selling close to 10 million units within a short period.
READ MORE: