China's answer to Starbucks, Luckin Coffee, is once again attempting to innovate by pushing to further enhance its fruit juices business. Apart from offering coffee, Luckin Coffee has been trying to diversify its portfolio of products to cater to the Chinese market. With the establishment of a new partnership, the company is now looking into offering a wide array of fruit juice products for its non-coffee drinking customers.
In a statement made by China's second-biggest coffee brand this week, it was revealed that the firm has struck a partnership with one of the world's biggest commodities trader, Louis Dreyfus, to help it develop its budding fruit juice business.
According to Luckin Coffee, both companies will be establishing a new joint venture company that will focus on the production of co-branded fresh juices. The companies' new products, which will include an array of orange, lemon, and apple juices, will be bottled in-house through its own bottling plant.
Luckin Coffee co-founder Jinyi Guo mentioned in a statement that they were very much excited about this new venture that will be part of the company's ambitious growth plans. Jinyi stated that they are also partnering with the world's best citrus fruit growers and juice suppliers to aid them in the launch of their co-branded Luckin Juice products.
With its growing line of products, which include a variety of coffee and tea-based drinks, Luckin Coffee has rapidly grown to become a formidable contender in the coffee chain industry. The company, which was launched in 2017, started out as a specialty coffee for takeout with a few stalls around the country.
Since then, the company has established more than 3,000 stores around China, with bold plans to completely overtake Starbucks as the country's largest coffee chain. Luckin Coffee has publicly proclaimed that it will surpass Starbuck's 4,500 stores by the end of 2019.
Luckin Coffee heavily relies on its domestic upbringing and its use of technology to attract its customers and to cater to the specific taste of Chinese drinkers. The company also offers its products with huge discounts through promotions and coupons. Unlike Starbucks, Luckin Coffee's products are priced much lower, which is partly why it has become so popular.
The publicly-traded company has also become very popular with Wall Street investors. After it launched its initial public offering (IPO) in May, the company has managed to see its stocks rise in value over the past few months. Luckin Coffee's stock surged by as much as 47 percent on its first day. As of Tuesday, the company stocks were trading at around $20.37, which is still 20 percent above its original IPO price.
