From commercial use to home use, "San Dun Ban" expands the scene of drinking premium coffee for consumers

The annual growth rate of coffee consumption in China is about 15%, and the market sales volume is expected to reach RMB 300 billion in 2020. Although the coffee market is growing at a considerable rate, the drinking scenes of specialty coffee are still limited .

Drip coffee is considered one of the best ways for specialty coffee to move away from stores and into offices and homes. Despite this, the taste of drip coffee still relies on hand brewing skills. Cold brew coffee, which is popular among young people, has a short shelf life, so it is the strength of physical stores.

The coffee brand "Santonban" follows the idea of ​​transforming commercial use into home use, extending the existing coffee scene and lowering the threshold for drinking premium coffee. Even if you are a coffee novice, you can easily make premium coffee at home.

Santonban was founded in 2015. It is an online boutique coffee brand targeting family occasions, offering 6 coffee SKUs and more than 20 coffee equipment SKUs. In 2016, it launched cold brew filter coffee, which sold 600,000 cups a year. This year's new cold brew instant coffee sold more than 20,000 boxes and nearly 200,000 cups (9 coffee beans per box) in a single month, with a repurchase rate of 60%.

How to achieve the change of scene?

• Equipment design . Sandunban has reduced the water outlet diameter of the hand-brewed coffee pot from the common 10mm on the market to 4mm, avoiding the problem of bland taste of drip coffee caused by unskilled skills. Both masters and novices can brew drip coffee with a stable taste.

• Instant coffee powder is portable . LABS (lossless flavor extraction system) developed by Santonban uses a low-temperature, long-time extraction method to extract crystalline powder, which not only retains the aroma and flavor of coffee, but also can be easily dissolved in cold water, hot water, and milk, eliminating the need for utensils, brewing, and filtering. The drinking scene has been extended from home to office and take-out.

In terms of raw materials, Santonban has built a 2,000-square-meter SC-level coffee roasting factory this year. All of Santonban’s coffee uses Arabica coffee beans with a SCAA (Specialty Coffee Association of America) score of 80+. The comprehensive bean cost of drip coffee is 150-160 yuan/kg, cold brew coffee is about 180 yuan/kg, and instant cold brew coffee is 2.75 grams per bean, and the raw material cost is 4 yuan.

In terms of channels, online sales account for 95%, with a gross profit margin of more than 50% . The products are distributed through dozens of online e-commerce platforms such as Taobao, Xiaohongshu, and Xiachufang. Stores will also be opened on Tmall and JD.com this month. According to the data provided by the team, the distribution of consumers is very concentrated, with 60% in first-tier cities, aged between 25 and 35, and mostly women. Wu Jun said that it would be easier to cover existing users by opening offline stores in the future.

In August this year, Santonban’s first offline experience store will open in Changsha. The offline store will be responsible for collecting user data models to prepare for opening stores in first-tier cities next year.

In addition to coffee, the company's business will focus more on "lifestyle" in the future. Another independent brand, MOiWOOD, has been polished for 2 years, focusing on organic fragrances and handmade soaps. After the offline store opens, a small market will be set up in the store to sell lifestyle products. Coffee and fragrance seem to have nothing to do with each other, but in fact, both are products with high gross profit and strong brand bargaining space. Wu Jun emphasized that they are essentially a lifestyle.

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I’m Xu Zi, an analyst at 36Kr. If you’re looking for coverage on consumer and new retail projects, you can add me on WeChat: xym_vine. Please state your purpose.