Kudi and Manner continuously adjust prices, new entrants still playing the low-price card: By 2026, the coffee industry will enter a "dual-track competition" era

Ask AI · How will dual-track competition affect the coffee market landscape?

Everyday Economic News Reporter: Fan Qianqian Everyday Economic Editor: Dong Xing Sheng

The Chinese coffee industry is emerging from the “involution” of price wars, with Kudi ending its “Unlimited 9.9 Yuan” promotion on February 1, and chain coffee brand Manner also choosing to raise prices on some products.

Recently, Manner Coffee issued a price adjustment notice on its official ordering mini-program, stating that starting April 7, the prices of single-origin bean SOE coffee drinks in stores will increase by 5 yuan per cup. On April 7, the “Daily Economic News” reporter found that the prices had already changed, involving four products, with unit prices rising to 25-30 yuan.

Industry insiders believe that behind this price increase, beyond the surface-level quality upgrade, there are deeper considerations of brand responses to market competition and pursuit of profit growth. Meanwhile, on one side are leading brands Manner and Kudi adjusting prices, while on the other side, newcomers like JD.com and Wallace are still抢占市场 at prices as low as 9.9 yuan or even lower. This also reflects the current segmentation trend in the coffee market: top brands are gradually withdrawing from price wars, while new brands still focus on low prices as their core strategy, signaling a new phase of industry competition.

Price Increase: More Than Just Quality Upgrades, Also Competition Pressure and Profit Strategies

According to Manner Coffee’s official website, it was established in 2015 and is affiliated with Shanghai Yinhe Industrial Co., Ltd. Currently, it has over 2,000 directly operated stores nationwide. Compared to other top brands with thousands of stores, Manner’s store count is relatively small, and its prices are also higher, mainly between 15 and 30 yuan. The reporter noticed that this time, Manner only raised the prices of a few single-origin bean SOE coffee products.

Photo source: Photo by Fan Qianqian, Everyday Economic News

What is a single-origin bean? How does it differ from regular coffee drinks? Coffee industry expert and Chairman of Shanghai Feiyue Investment Management Co., Ltd., Wang Zhendong, explained to the reporter that generally, freshly ground coffee shops use blended coffee beans, which come from different origins. This approach can lower costs while ensuring better and more stable flavors, and also hedge against price fluctuations of single-origin coffee beans.

SOE refers to coffee beans from a single origin. Regarding the reason for SOE drinks, Wang Zhendong said: “Mainly influenced by the trend of specialty coffee. Blended coffee products tend to have monotonous flavors, and consumers want to taste more floral, nutty, and other flavors.” The reporter noticed that Manner’s SOE product detail page specifies the origin, processing method, and possible flavors.

As for the reason behind the price increase of this SOE single-origin bean coffee, Manner Coffee responded to the reporter that the core reason is to use higher-quality coffee beans to provide consumers with a better flavor experience.

Besides quality upgrades, there may also be business logic behind Manner’s price hike. On one hand, in the high-end coffee price segment where Manner operates, Starbucks, Peet’s Coffee, and Blue Bottle Coffee are gaining momentum, with continuous capital moves in recent months. Their target consumer groups value coffee quality more, with price being secondary.

On the other hand, the cost of coffee beans remains high, and Manner may want to tell a better profit story to capital. “The Yangtze River Delta remains Manner’s core market, and there’s limited room for penetration. It’s hard to tell a scale story, so they pursue better profits to differentiate from other brands,” Wang Zhendong said. Data from Narrow Door Catering on April 7 shows that over 55% of Manner stores are in Jiangsu, Zhejiang, and Shanghai.

Industry insiders: Top brands will gradually exit price wars, but low prices remain a key strategy for new brands

The topic of coffee prices has been discussed from last year into this year. Last year, industry insiders mostly debated when the price war in coffee would end. This year, two chain coffee brands have consecutively raised prices, and premium coffee brands like Blue Bottle and Peet’s Coffee are also active. Does this mean the end of the price war?

On February 1, Kudi launched the first shot — ending the “Unlimited 9.9 Yuan” promotion early. But in late March, Kudi and Luckin Coffee both announced “free upgrade” promotions on the same day, increasing volume without raising prices.

“Luckin and Kudi hope to soften the impact of price normalization on consumers by offering larger portions at the same price, so consumers still feel they get good value,” Wang Zhendong analyzed. This also stems from the fact that the main consumer groups for Kudi and Luckin are young people in third- and fourth-tier cities. “For them, coffee and milk tea are not much different, and increasing the cup size to match milk tea aligns with consumer expectations.”

In fact, this also means that for Kudi and Luckin’s consumers, price remains a sensitive factor. That’s why new brands entering the market often adopt low-price strategies to attract customers lost after price adjustments by existing brands.

For example, JD’s Qixian Coffee entered the scene with low prices, mainly between 4 and 9.9 yuan per cup. Wallace launched a promotion at the end of last year offering up to 210 cups of coffee for 9.9 yuan. Additionally, brands like Guming and Chabaidao, which entered the coffee scene from tea drinks, mainly price their coffee products below 10 yuan. In March, Shanghai Auntie also launched a campus coffee subsidy activity offering “7 cups for 9.9 yuan.”

“For new brands, low prices enable rapid growth, which remains an important strategy in the upcoming coffee market,” Wang Zhendong said. For some brands that already command a certain premium, their consumer base is relatively stable with strong customer loyalty, so they will gradually withdraw from price wars.

Daily Economic News