Can Flavored Coffee Save Struggling Milk-Tea Brands? An Industry Reality Check

At a Glance (China Coffee Network): Entering the coffee track is becoming a transformation direction for new tea-drink companies. Yet when faced with flavored coffees from milk-tea shops that often pack 400 kcal per cup, how will consumers choose? Can flavored coffee become the life-saving straw for milk-tea firms’ pivot?

On this, Zhu Danpeng, vice president of the Guangdong Food Safety Promotion Association, told Securities Daily that flavored coffee reuses the milk-tea supply chain at zero cost and caters to the public’s sweet tooth—indeed it can fill the morning foot-traffic gap and ease short-term store pressure, but it cannot break the homogenized price war or align with the nation’s low-calorie trend. Therefore, for all downscale milk-tea brands, betting on flavored coffee for a transformation breakthrough is unrealistic.

Milk-tea brands are entering the coffee track one after another. According to CIC Consulting, China’s fresh-ground coffee is expected to post a 19.8% CAGR from 2023 to 2028—the fastest-growing segment in the made-to-order beverage market. Across the new tea-drink industry, some firms face falling per-store revenue and high closure rates. Facing coffee’s high-growth expectations, laying out a coffee business has become the natural choice. Brands such as Mixue, Chabaidao, Guming, and Auntea have made coffee products their second growth curve.

Take Guming as an example: in late May, at its partner conference, it announced plans to invest another RMB 400 million in coffee and explicitly positioned coffee as its second growth curve, raising its coffee revenue-share target from the previous 10%–15% to 20%–25%.

Zhan Junhao, founder of Fujian Huace Brand Positioning Consulting, told Securities Daily that Guming’s coffee push and revenue targets are an integrated layout balancing innovation and income growth. Its flavored coffee fuses tea-drink flavoring logic—a product-form innovation that fits existing users’ tastes—while reusing stores, supply chain, and staff to spread operating costs, extend business hours, and lift per-store revenue: a pragmatic expansion built on its channel strengths.

However, the reporter noted that Guming chose a “flavored coffee” path—avoiding low-margin, high-consumer-education-cost pure black coffee, and instead building cream, dessert, and fruit-flavored coffees. For instance, its “Ku Jin Gan Lai” (bitterness ends, tangerine comes) latte aligns well with Guming’s existing supply chain. Guming’s cold-chain warehouses and nationwide forward warehouses already stock milk caps, flavored syrups, and cream bases for milk tea; stores need only add a coffee machine—no new warehousing or retraining required.

In fact, even as Guming’s high-profile tea-coffee line went viral, it sparked consumer debate. “Brands only pander to consumers’ shallow preference for sweet, fragrant tastes, hide high-calorie risks using an information gap, and rely on the existing supply chain to expand SKUs at low cost—this looks like a coffee transformation but is really just continuing the old milk-tea involution.”

In Zhan’s view, new tea-drink players laying out flavored coffee are making a routine growth exploration, but not the optimal transformation solution. These products follow milk-tea ingredient logic and are calorie-heavy, contradicting consumers’ healthy-coffee perception and easily causing a reputation gap. They can drive short-term traffic from the existing base but cannot escape tea-drink thinking or truly build professional coffee competitiveness; long-term development is limited.

High-calorie “flavored coffee” struggles to be the lead. Under the belief that coffee is healthier than milk tea, “flavored coffee” became consumers’ new choice. Yet the reporter found in interviews that they chose products precisely because “coffee is healthier than milk tea” and were unaware that sugar-free coffee can far exceed ordinary milk tea in calories. “A cup of the Ku Jin Gan Lai latte, without added sugar, still reaches 402 kcal—roughly a double cheeseburger. The tiramisu latte and vanilla-bean Vienna latte also exceed 400 kcal.” These figures spread online. “Choosing a tea-brand’s coffee means assuming it’s healthier than traditional milk tea; I never expected sugar-free coffee to out-calorie dessert milk tea,” one consumer told the reporter.

In Zhu’s view, functionalization and health-orientation have become the direction and mainstream label of the entire beverage industry. For new tea drinks in a stock era, only by stripping traffic gimmicks, returning to the underlying logic of product health, and guiding the industry from “recipe involution” to “health transparency” can they protect consumers’ health rights—and that is the only way to truly achieve high-quality, sustainable development of China’s made-to-order beverage industry.

Zhan further said new tea drinks pivoting to coffee must find the right positioning: on one hand optimize recipes to launch low-calorie, light options and label calories to dispel consumer worry; on the other, differentiate product lines to balance signature flavored drinks with basic pure coffee, creating differentiation. By leveraging original strengths on a tea-coffee fusion route—without blindly benchmarking professional coffee brands—and simultaneously strengthening coffee ingredients and craft, they can steadily cultivate consumer mindshare.

Our reporter Yuan Chuanxi (Editor Guo Zhichen); Source: Securities Daily

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