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Written by | H.H
Edited by | Yang Yong
Source | Hydrogen Consumption Production ID | HQingXiaoFei
The days of specialty coffee are becoming increasingly difficult.
On March 4th, Luckin Coffee's major shareholder, Dazeng Capital, officially won the bid for Blue Bottle Coffee, and will acquire Blue Bottle Coffee's global offline store business for no more than $400 million once the transaction with Nestlé is completed.
As the &#34;Apple of the coffee world,&#34; Blue Bottle Coffee has targeted the high-end market with strict standards since its inception, making it a coveted destination for many coffee enthusiasts. However, due to its slow expansion pace and high operating costs, coupled with the declining specialty coffee market, Nestlé, eager to slim down its business, has put it up for sale.
For the acquirer, Luckin, acquiring Blue Bottle Coffee can achieve better complementary advantages. After all, although its scale is already large enough, the trend of increasing revenue without increasing profits has begun to emerge under the influence of the 9.9 yuan price war and delivery subsidies. Blue Bottle Coffee's high-end influence in the industry can undoubtedly help Luckin push upward.
But in this era where the ready-made coffee market is becoming increasingly cost-effective, is the path of specialty coffee still viable?
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What is Blue Bottle Coffee?
When the news of Luckin's major shareholder acquiring Blue Bottle Coffee was exposed, many people's first reaction might be: What is Blue Bottle Coffee?
This is understandable, as to date, this specialty coffee brand revered by countless coffee enthusiasts has only 15 stores in China, mainly located in cities like Shanghai, Shenzhen, and Hangzhou. Even globally, Blue Bottle Coffee has only 140 stores across six countries and regions, making it stand out in a ready-made coffee market that often boasts thousands of stores.
Public information shows that Blue Bottle Coffee was founded in 2002. At that time, the founder, Freeman, a clarinetist, was dissatisfied with many commercial coffees on the market, so he sold ready-made coffee using a roasting machine in his garage.
In its early stages, Blue Bottle Coffee primarily attracted consumers with its unique taste and sufficiently fresh coffee beans, opening its first offline store in San Francisco in 2005. Unlike the unavoidable competitor Starbucks, Blue Bottle Coffee only used coffee beans roasted within 48 hours in its early days, and did not provide internet access in its stores, nor did it encourage working in coffee shops.
Despite this, a ready-made coffee brand with a blue bottle as its logo has still garnered a large number of loyal consumers with its unique business philosophy and product positioning even higher than Starbucks, earning the title of &#34;Apple of the coffee world&#34; in Silicon Valley
Between 2012 and 2025, Blue Bottle Coffee received investments from several well-known institutions, including Morgan Stanley. With the support of capital, it began to expand into overseas markets.
In 2017, perhaps due to the underperformance of its coffee business, international food and beverage giant Nestlé acquired 68% of Blue Bottle Coffee for $500 million. In the following eight years, the number of Blue Bottle Coffee stores worldwide grew by less than 100, maintaining a slow expansion pace. It wasn't until 2022 that it opened its first offline store in mainland Shanghai, and it is now under the ownership of Luckin Coffee's shareholder, Dazhong Capital.
Objectively speaking, the reason Blue Bottle Coffee has become a coveted brand for countless coffee enthusiasts is largely related to the brand tone established at its inception.
<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OsseC8gtoXaEqe52Ec_3JV0e3rFLKcUeqLySy0tudvsb8AA/641?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OsseC8gtoXaEqe52Ec_3JV0e3rFLKcUeqLySy0tudvsb8AA/641"/>
Source: Blue Bottle Coffee WeChat Official Account
By using only freshly roasted coffee beans within 48 hours and favoring historical buildings like old warehouses for its stores to create a sense of scarcity, along with unique and aesthetically pleasing store designs and atmospheres, Blue Bottle Coffee, with its limited number of stores, has gradually become part of the top tier of specialty coffee brands.
In simple terms, while ensuring quality and service across various experiences, Blue Bottle Coffee has told a more upscale story aimed at the specialty coffee market, filling a market gap distinct from Starbucks.
However, this unique specialty philosophy of Blue Bottle Coffee has, to some extent, limited the brand's growth potential. After holding the brand for several years, Nestlé, as an international food and beverage giant, has found it increasingly difficult to maintain the patience it had at the time of acquisition, especially as it seeks to streamline its business.
Data shows that in 2005, Blue Bottle Coffee achieved global revenue of $250 million, and even though a cup of coffee costs over 40 yuan, it was still operating at a loss. The core reason lies in Blue Bottle Coffee's almost obsessive brand philosophy, which results in significantly high store operating costs.
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What is Luckin's intention?
Since its establishment in 2017, Luckin Coffee's growth rate has been astonishing.
On February 26, Luckin Coffee released its financial report for the fourth quarter and the entire year of 2025. By 2025, the total number of Luckin stores worldwide officially exceeded 30,000, with a net increase of 8,708 stores for the year; total revenue reached 49.288 billion yuan, a year-on-year increase of 43%, and net profit was 3.6 billion yuan, a year-on-year increase of 21.8%.
Although its global market revenue still lags behind international giants like Starbucks, Luckin has already achieved a significant lead in the domestic ready-to-drink coffee sector. So, why would such a ready-to-drink coffee giant choose to acquire what appears to be a small but beautiful Blue Bottle Coffee?
<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OjQK_IqZ3XR5_3BvDjFOhnCTGXXooARXttpUU1V0azPqoAA/1000?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OjQK_IqZ3XR5_3BvDjFOhnCTGXXooARXttpUU1V0azPqoAA/1000"/>
Source: Luckin Coffee Official Weibo
From the perspective of its own development, Luckin Coffee has indeed been a highly cost-effective choice in the minds of consumers since its inception. At that time, it engaged in differentiated competition with Starbucks, which was pursuing a high-end route in the domestic market, by targeting a mid-range price of around 15 yuan; subsequently, under the influence of the 9.9 yuan price war initiated by Kudi Coffee, it quickly cultivated the mindset of mass consumers in the domestic ready-to-drink coffee sector within just a few years.
However, water can carry a boat, and it can also capsize it. The 9.9 yuan ready-to-drink coffee helped Luckin rapidly gain market share, and the marginal cost reduction brought about by scale advantages facilitated rapid expansion, but it also somewhat locked the brand into a pricing power over terminal prices.
On one hand, the price of 9.9 yuan coffee has become deeply ingrained in consumers' minds, and it may be difficult for the general public to accept direct price increases for certain beverages based on the main brand to pursue a high-end route; on the other hand, the low-price strategy of 9.9 yuan and the efficiency-first operating model inevitably affect its profitability. For instance, starting from the third quarter of 2025, Luckin began to show significant revenue growth without profit growth, and by the fourth quarter, its net profit of 518 million yuan plummeted by 39% year-on-year.
Industry insiders believe that the revenue and net profit growth brought about by Luckin's continuous store expansion is gradually reaching a ceiling. Therefore, acquiring Blue Bottle Coffee, a boutique coffee shop, not only helps fill its gap in the high-end market but also tells a new story to the outside world, as there is indeed a complementary advantage between Luckin and Blue Bottle Coffee.
<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OExM8hLKyX-dFI6ALZQtOV8AnKvMLYxhyvwqCHc8NAQ-0AA/1000?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OExM8hLKyX-dFI6ALZQtOV8AnKvMLYxhyvwqCHc8NAQ-0AA/1000"/>
Source: Blue Bottle Coffee WeChat Official Account
However, the reality is that the boutique coffee sector is not doing well at the moment.
In August last year, Peet's Coffee, known as the &#34;pioneer of American coffee,&#34; was acquired by American beverage giant KDP for $18 billion; Starbucks China was taken over by local investment firm Boyu Capital, which acquired a 60% stake; the British coffee brand Costa, already owned by Coca-Cola, has seen multiple rumors of sale. Not to mention local boutique coffee brands like M Stand and Seesaw, which, although they had impressive performances in their early stages, have gradually lost long-term appeal under the impact of the affordable market.
Until now, many once-popular boutique coffee brands seem to only attract consumers to check in during holidays, and it's no wonder that more and more consumers openly say, &#34;Boutique coffee is just an embellishment; 9.9 yuan is the daily choice.&#34;
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Market reshuffling continues
The fierce competition in the 9.9 yuan coffee market has not completely faded to this day.
Luckin Coffee sends out 9.9 yuan coupons for certain beverages to its members every week; although Kudi Coffee officially announced that all drinks are 9.9 yuan, the reality is that when you open Kudi Coffee's mini-program, you can see a 9.9 yuan section offering multiple beverages to consumers; nowadays, even Wallace, which focuses on the Western fast food market, has joined the coffee race, launching a 9.9 yuan monthly subscription service, which, when calculated based on a maximum of 210 cups of coffee, results in a per-cup price of even less than 5 cents...
In fact, it is indeed difficult for the 9.9 yuan coffee to completely exit the public's view, as this strategy has genuinely cultivated consumer mindset over the years. However, the 9.9 yuan price segment represents an extreme compression of the supply chain and the entire operational system of freshly brewed coffee brands, with offline stores needing hundreds of times the sales volume daily to achieve break-even.
From this perspective, very few coffee brands are truly willing to engage in the 9.9 yuan price war. Who wouldn't want to pursue a high-end route to make big money, rather than choosing to do the business of picking up steel scraps?
According to the &#34;2025 China Coffee Industry Development Report,&#34; the data shows that by 2025, China's coffee market size will reach 218.1 billion yuan, with freshly brewed coffee contributing over 188 billion yuan to this figure, and more than 40,000 new offline coffee stores added in just one year. Based on the compound annual growth rate over the past decade, the growth of the coffee market remains stable at over 10%.
The prospects for the freshly brewed coffee market size are still promising, but the future development of the coffee market will also take a differentiated route. As competition continues to intensify, affordable brands will still be the mainstream in the market, while seemingly struggling specialty coffee brands also have the opportunity to maintain their place.
Taking the 2025 data as an example, specialty coffee maintains a market share of over 10% in the entire coffee market in China, while in more mature international markets, this ratio is around 30%. Although more people currently pursue cost-effectiveness, this does not mean that specialty coffee lacks survival space, as the recovering performance of Starbucks provides a sample.
<img src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OyK7elDtllekU8YjdzmW4tlxDjjgPJXcliK0_DmtdQXAQAA/1000?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://inews.gtimg.com/om_bt/OyK7elDtllekU8YjdzmW4tlxDjjgPJXcliK0_DmtdQXAQAA/1000"/>
Source: Starbucks China official Weibo
At the end of last year, Starbucks released its Q4 and full-year financial report for fiscal year 2025. The Chinese market achieved revenue of 3.105 billion USD in fiscal year 2025, a year-on-year increase of 5%, with a growth of 6% in the fourth quarter alone. This marks the fourth consecutive quarter of positive revenue growth for Starbucks China and the second consecutive quarter of same-store sales growth.
The reason Starbucks can follow a path unaffected by the 9.9 yuan price war ultimately lies in its multifaceted innovation. For example, the &#34;True Flavor Sugar-Free&#34; series launched in 2025, including new products like Rose 20 and Jasmine 100, are still favorites among many coffee enthusiasts today, aiming to be leaders rather than followers in the consumer market
Luckin can also learn from its predecessor Starbucks, not blindly engaging in price wars, but instead leveraging its own advantages to steadily progress step by step. From this perspective, perhaps Blue Bottle Coffee can inject some &#34;slow and meticulous work&#34; genes into Luckin.
&lt; END&gt;

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Luckin Coffee's major shareholder significantly increased capital to acquire Blue Bottle Coffee, with a transaction amount not exceeding $400 million. Blue Bottle Coffee is known for its high-end market, but due to slow expansion and high operating costs, Nestlé decided to sell. Luckin hopes to achieve complementary advantages through the acquisition of Blue Bottle, despite facing price wars and profit pressures. Blue Bottle Coffee has only 15 stores in the domestic market and just 140 globally, and its unique business philosophy makes it stand out in the fiercely competitive coffee market

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Luckin Coffee's major shareholder acquires Blue Bottle Coffee, is the ready-to-drink coffee sector undergoing another reshuffle?