Luckin Coffee, known as the "coffee king" in China, is not only committed to making people "sober", but also targets the "slightly tipsy" business.
Image source: Luckin Coffee
On May 18, 2026, Luckin Coffee launched two alcoholic special drinks, "Scarlet Moonlight" and "Coco Vienna", with a capacity of 355ml each. Each cup contains about 15ml of liquor stock and is priced at 15.9 yuan.
In fact, as early as September 2023, Luckin Coffee had teamed up with Maotai to create the phenomenal alcoholic coffee drink "Sauce flavored Latte". However, it should be noted that although 53 degree Feitian Maotai liquor is added to the "sauce flavored latte", the alcohol content is less than 0.5% vol, which is not an alcoholic beverage, but a coffee beverage with a "Maotai flavor".
The alcoholic beverages launched by Luckin Coffee this time are clearly labeled as having an alcohol content higher than 0.5% vol, and therefore need to be managed as alcoholic beverages. They only support offline in store pickup and are strictly prohibited from being sold to minors.
Farsight believes that although "Sauce flavored Latte" and "Scarlet Moonlight" are both alcoholic coffee drinks, due to significant differences in alcohol content and consumption scenarios, Luckin Coffee's strategic demands for launching these two types of products are not the same.
Previously, when laying out the "sauce flavored latte", Luckin Coffee was only committed to exploring the "residual value" of coffee drinks. The current layout of alcoholic beverages indicates Luckin Coffee's ambition to enter a new market.
Relying on tens of thousands of offline stores, alcoholic beverages can indeed quickly reach consumers. However, how to bridge the gap between Luckin Coffee's main freshly made coffee and alcoholic beverages will become an unavoidable issue.
The dividend of freshly brewed coffee is disappearing, and Luckin Coffee is approaching the ceiling of growth
As a coffee newcomer founded less than ten years ago, Luckin Coffee's achievements are undoubtedly commendable. Not only has it already returned to normal cash flow, but it has also shaken Starbucks' foundation in the Chinese market, putting the latter in a passive position of seeking capital integration.
Source: Luckin Coffee Q1 2026 Financial Report
However, according to the latest financial report, the quality of Luckin Coffee's operations has shown signs of deterioration. According to the financial report, in Q1 2026, Luckin Coffee's revenue was 11.995 billion yuan, a year-on-year increase of 35.3%; Net profit was 506 million yuan, a year-on-year decrease of 3.6%; The GAAP operating profit margin was 6%, a year-on-year decrease of 2.3 percentage points, indicating a problem of "increasing revenue without increasing profits".
Image source: iMedia Consulting
Looking into the reasons, as the dividends of the Chinese coffee market fade away, Luckin Coffee is inevitably hitting the ceiling of growth. According to a research report released by iMedia Consulting, it is expected that the size of China's coffee market will grow from 1 trillion yuan to 1.39 trillion yuan from 2025 to 2029, with a compound annual growth rate of only 8.52%, far lower than the previous double-digit growth rate.
In order to seize the few incremental dividends, Luckin Coffee is committed to laying more stores. As of the end of Q1 2026, the total number of Luckin stores worldwide reached 33600, a month on month increase of 8.21%.
Correspondingly, in order to capture more consumers, Luckin Coffee has invested higher costs in delivery and marketing. In Q1 of 2026, Luckin's delivery expenses amounted to 1.308 billion yuan, a year-on-year increase of 89.8%; Sales and marketing expenses amounted to 732 million yuan, a year-on-year increase of 47.5%.
More stores can indeed cover a wider consumer base, but it should be noted that with numerous brands opening stores and new players constantly entering the market, the new demand for freshly brewed coffee in China is becoming saturated. In this context, although Luckin Coffee has invested more costs in high-density stores, it is difficult to reverse the dilemma of declining single store operating efficiency.
Source: Luckin Coffee Q1 2026 Financial Report
According to the financial report, from Q2 2025 to Q1 2026, Luckin Coffee's self operated same store sales growth rates were 13.8%, 14.3%, 1.3%, and -0.1%, respectively. Not only did the growth rate gradually decline, but it even turned negative.
Huayuan Securities once pointed out in a research report that based on the per capita disposable income of urban residents in 2024, Luckin Coffee's theoretical upper limit for opening stores in the Chinese market is about 39000. Although the number of Luckin stores has not yet reached the theoretical limit at this stage, the growth rate of self operated same store sales has been declining, which largely indicates that it has reached a growth bottleneck.
Stepping out of the coffee comfort zone, Luckin Coffee wants to solve its problems through diversification
In fact, Luckin Coffee has long realized that as demand gradually saturates, it is difficult for the freshly brewed coffee beverage business to rely solely on expanding stores to achieve growth. In view of this, Luckin Coffee has chosen to focus on diversified beverages.
In August 2024, Luckin Coffee launched the "Morning Coffee and Afternoon Tea – Send You 100 Million Cups of 9.9 Yuan Afternoon Tea" campaign, gradually launching light milk tea products such as Light Jasmine, Light Oolong, and Coconut Ceylon, extending its tentacles to the field of freshly made tea drinks. Afterwards, Luckin Coffee successively launched products such as fruit tea, matcha, yogurt, etc., fully focusing on the new tea beverage business.
Image source: Luckin Coffee
Relying on a strong brand awareness of trendy beverages and a massive number of stores, Luckin Coffee has become a heavyweight player in the new tea beverage industry. Official data shows that Luckin Coffee's Light Jasmine Light Milk Tea sold over 44 million cups in its first month. On the occasion of its first anniversary on the market, Luckin Coffee's light milk tea has sold over 300 million cups, with an average monthly sales volume of about 25 million cups.
Image source: iMedia Consulting
However, in recent years, with saturated demand and intensified competition, the new tea beverage industry has also faced challenges of growth pressure. According to data disclosed by iMedia Consulting, it is expected that the size of China's new tea beverage market will reach 374.93 billion yuan by 2025, with a year-on-year growth rate of only 5.7%, which is significantly slower than the double-digit or even triple digit growth rate in previous years.
In order to overcome the growth dilemma, Luckin Coffee once again embarked on a diversified development journey. First, in April 2026, it launched bottled ready to drink coffee, covering channels such as supermarkets and convenience stores, with a single bottle price of 6-7 yuan; Later, relying on existing stores, a special alcoholic beverage was launched recently, priced at 15.9 yuan.
Image source: TMIC
From a market perspective, Luckin Coffee's recent expansion into new businesses does indeed have vast development potential. Taking "Weixun" drinks as an example, according to the data disclosed by TMIC, it is estimated that the market size of low alcohol liquor in China will be about 74.3 billion yuan in 2025, with a year-on-year surge of 30.12%, which is far higher than the overall level of the Baijiu industry.
As Guo Jinyi, CEO of Luckin Coffee, said, "Through these diversified product innovations, we have further improved our product matrix, better covering the consumption needs of all time periods and multiple scenarios, and effectively supporting the acquisition of new customers and repeat purchases of old customers
It is not difficult to find that Luckin Coffee has not blindly pursued diversified development in the past few years, but has a clear development axis – relying on existing brand, supply chain, and channel resources, enriching the beverage matrix, and reaching users in more and more growth oriented consumption scenarios.
Nowadays, in addition to coffee and new tea drinks, Luckin Coffee is also offering "slightly tipsy" drinks, indicating that it hopes to break away from the "office refreshing" scene and meet consumers' needs for "light socializing" such as work and home, weekend gatherings, etc.
With the capture of a large number of consumers by new product categories, Luckin Coffee is expected to break through the bottleneck of single store operating efficiency and open up new growth opportunities, becoming a major product comparable to freshly brewed coffee.
However, if Luckin's "slightly tipsy" drinks want to settle into long-term business, they still face significant challenges.
Tea and alcohol are severely separated, should Luckin learn from "honey snow"?
In fact, Luckin Coffee is not a "lone hero" in the field of alcoholic beverages. Given the diminishing dividends of freshly brewed tea beverages and the thriving development of the low alcohol alcohol market, many tea beverage brands have already begun actively promoting "slightly tipsy" products.
Source: Grandfather doesn't make tea
For example, in July 2025, Grandpa launched the "Litchi Ice Brewing Drunken Limited Edition" without brewing tea, using intangible cultural heritage Xiaogan rice brewing as the base, adopting a zero tea base formula, adding freshly squeezed rice wine, and an alcohol content of less than 0.5% vol.
Coincidentally, in September of the same year, Chabaidao also joined hands with Luzhou Laojiao to launch a joint limited drink, "Getting drunk", which focuses on "real Baijiu, pouring directly", with an alcohol content of less than 0.5% vol, and is committed to providing consumers with a fresh and healthy experience of mild intoxication.
Due to its novelty, many new tea drink brands have launched "slightly tipsy" products that can attract a large number of consumers to buy at the beginning of their launch. However, it should be noted that despite the continuous introduction of new "slightly tipsy" products, the market has not yet seen the emergence of "evergreen trees" such as coconut latte, succulent grape, and hand lemon, as seen in the new tea beverage market.
The reason for this is not only due to the higher operational difficulty and relatively limited audience of alcoholic beverages, but also because the main consumption scenarios, customer groups, and sales periods of such products have significant cracks compared to freshly made tea drinks.
Previously, Luckin Coffee's main consumer groups were white-collar workers and student party members, and most of its stores were located around office buildings and schools. On the other hand, the main consumption scenarios for alcoholic beverages are at home at night or camping on weekends. In this context, it is difficult for Luckin Coffee's existing stores to maximize the commercial value of alcoholic beverages.
Regarding the disconnect between freshly made tea drinks and alcoholic beverages in terms of consumer groups and scenarios, Meixue Ice City has a relatively more thorough understanding.
As a leader in the new tea beverage industry, Meixue Bingcheng has also felt the downward pressure brought by the rising ceiling of the new tea beverage industry, and therefore actively laid out its alcoholic beverage business.
However, Meixue Bingcheng did not rely on existing stores to incubate new businesses. Instead, in October 2025, it invested 297 million yuan to purchase 53% of the shares of the current fresh beer brand Fulujia.
Source: Fulu Family
Subsequently, Miyue Ice City extended its tentacles to the "Micro Drunk" track using the Fulu family as a carrier. Driven by the Milk Snow Ice City, the Fulu family grew fiercely. According to official data, as of February 2026, the number of Fulu stores has exceeded 2000, with a net increase of 1000 stores in 8 months.
In summary, for Luckin Coffee, with its mature supply chain system, strong financial strength, and nationwide store network, it is not difficult to launch "slightly tipsy" drinks.
The real challenge lies in how to establish a stable and long-term consumption scenario between the "high-frequency, refreshing" coffee consumption logic and the "low-frequency, emotional" slightly tipsy demand.
Because freshly brewed coffee emphasizes efficiency and daily necessities, while alcoholic beverages rely more on atmosphere, socialization, and nighttime scenes, there are natural cracks between the two in terms of consumption habits, operational rhythm, brand mentality, and other dimensions.
Essentially, Luckin Coffee's layout of "slightly tipsy" beverages is not a simple SKU expansion, but requires restructuring of existing business models.
If the above cracks cannot be truly stitched together, the "slightly intoxicated" beverage is likely to remain at the short-term marketing level, difficult to settle into a stable second growth curve, and Luckin Coffee cannot break through the ceiling of single store operating efficiency through this.
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