Previous post on growth in stores and per store/unit growth.
Now here are some number about the coffee market in the US.
- 64% of American adults consume coffee every day
- An average American drinks 3.1 cups of coffee per day
- Americans drink about 400 million cups of coffee every day
- Americans drink about 146 billion cups of coffee annually
- 65% of US adults drink coffee with their breakfast
- The average price of a cup of coffee in the US is $3.28
- Coffee shops see a 7% annual growth rate on average
- The annual coffee retail sales in the US are about $5.2 billion
In China, first we can find a subset of the 1.4 population by taking the ~60% between age 15-45 and ~60% in urban areas -> 500 million.
Then assuming 20% of the target 500 million customers will visit/purchase in stores like Luckin (-> 100 million) twice a week (100 cups per year) -> 10 billion cups per year.
The current average monthly transacting customers is 9 million.
Using average price of $2 per cup, the estimated market can reach $20 billion easily in 1-2 years.
And given that Luckin is expanding into other categories like cream cheese teas, fruit teas and juices, twice per week is not an overestimate.
An annualized revenue of $2 billion is only 10% of the addressable market.