Dive Brief:
- Mixue, a China-based beverage brand, opened its first U.S. location in Los Angeles on Dec. 19, the company said in a Saturday press release.
- The concept sells ice cream, pure tea, fruit tea, milk tea and coffee with customizable levels of sugar and toppings.
- Mixue has been rapidly expanding outside of China, and operates about 4,700 units in 13 countries outside its home country. The chain plans to open additional locations across the U.S., with New York stores to open “in the coming days,” according to the press release.
Dive Insight:
Mixue could give rapidly growing chains like Dutch Bros and 7 Brew, as well as beverage stalwarts like Dunkin’ and Starbucks, some intense competition. The chain offers low-cost menu items, with ice cream starting at $1.19, iced lemonade at $1.99, lattes at $2.99 and bubble tea starting at $3.99.
Mixue is able to offer cheap fare because it owns its entire supply chain, from raw materials to production and distribution. The chain is 99% franchised and generates most of its revenue from selling food, equipment and packaging to these operators, according to a filing with the Hong Kong Stock Exchange.
As it expands, Mixue will continue to update its supply chain with additional sourcing capabilities, improved logistics efficiency and investments in production capacity and research and development, the company said in the press release.
“These efforts are aimed at supporting sustainable growth while maintaining consistent product quality and affordability as Mixue scales in international markets,” the press release said.
Despite rapid expansion, Mixue has had to scale back some of its international locations, closing units in Indonesia and Vietnam to better support long-term sustainability, Inside Retail reported. However, franchisee interest remains strong in that region with an additional 93 new store commitments signed for Vietnam. It also continues to expand in China, where it has a significant presence in second- and third-tier cities.
The company has also been shifting its strategy from smaller stores to larger formats that include open bar counters designed for better customer flow, according to Inside Retail.
Mixue Group, which operates 53,000 units globally, has also been expanding its coffee chain Lucky Cup, which reached 10,000 locations in November, although it has not announced plans for expansion in the U.S.
