Interface News Reporter | 馬越
Interface News Editor | 牙韓翔
Whether it’s non-dairy creamer, fruit juice concentrate, sauces, paper cups or straws, not many of the capital dividends brought by the rapid take-off of tea and coffee chains can be blown up the upstream supply chain.
An obvious change is that the overall growth rate of the Chinese chain tea drink industry has slowed down significantly in the past year.
Data from the “Regional Tea Research Report 2026” of the Red Food Industry Research Institute shows that the national current tea market size will be 195.7 billion yuan in 2025, a year-on-year increase of 11.4%; it is expected to reach 210 billion yuan in 2026, with the year-on-year growth rate further falling to 7.3%. Compared with historical data, the industry growth rate has gradually declined from the peak of 24.9% in 2021 to the high recovery growth of 19.3% in 2023 to the single-digit range.
The slowdown in stores is more intuitive. GeoQ’s “Blue Book on Chain Catering Store Development in the First Half of 2026” monitoring shows that in the first half of 2026, 112 chain tea brands will open approximately 18,000 stores and close approximately 11,200 stores, with an opening and closing store ratio of 1.61, of which 62% of brand store scales are shrinking or stagnating.
The supply chain of tea and coffee chains is very long, and due to the huge demand, whether it is non-dairy creamer, fruit juice puree, sauces, paper cups, or straws, it can support a medium-sized company, and there are even listed companies.
However, as downstream customers become more saturated in size and compete in price and product terms, the involution among supply chain companies is also becoming fierce. The previously rising dividends in the industry no longer exist, but have entered a stage of structural differentiation.
Picture taken by: Jiemian News Ma Yue
If you sort out the operating status of a group of tea and coffee supply chain companies in the first half of 2026, you can find some commonalities in the upstream supply chain.
One obvious manifestation is the separation between revenue growth and profitability. The scale can still grow, but profits continue to be squeezed.
Shandong Weikexian Food Group Co., Ltd. (hereinafter referred to as “Weikexian”), which recently hit the IPO of the Beijing Stock Exchange, is a typical example.
This company was established in October 2018 and is headquartered in Ningyang County, Tai’an City, Shandong Province. The core business of this company is HPP fruit and vegetable juice ultra-high pressure cold sterilization technology and beverage thick slurry processing technology, and it can standardize and scale HPP cold sterilization technology.
Weikexian has also used this technology to enter the raw material business of ready-made drinks. Its main products include juice concentrates, jams, and beverages. Its customers include new tea drinks and restaurant chain brands such as Mixue Bingcheng, Luckin Coffee, Shanghai Auntie, and Haidilao.
Jiemian News found in its public financial data that Weikesian’s revenue continued to grow by 25.23% in the first half of this year to 504 million yuan, but its net profit fell by 22.77% year-on-year, and its gross profit margin also dropped to 20.33%. A typical increase in revenue does not increase profits. The company explained that it was due to lowering the selling prices of some products due to competition for orders from large customers, and the increase in fixed costs caused by fresh fruit raw materials and production line expansion, compressing profit margins.
Tianye Shares, a company also listed on the Beijing Stock Exchange, also had a difficult time in the first half of this year.
The main business of Ye Ye Co., Ltd. includes raw fruit juices and quick-frozen fruits and vegetables. It is similar to the business model of Wei Ke Xian. It is also a raw material supplier for the new tea and juice beverage industries. In the first half of this year, its revenue fell by 6.75% year-on-year, and its net profit plummeted by 94.16%. Its comprehensive gross profit margin also dropped by 4.75 percentage points to 15.93% from 20.68% in the same period last year.
In this regard, Yeye Co., Ltd. explained that the total volume of the downstream juice beverage industry is under pressure, the stock game in the new tea beverage industry has intensified, and the competitive pressure is transmitted to the upstream industry, resulting in the company’s operations being under pressure. The company uses price competition strategies to maintain customer sentiment. In addition, during the reporting period, the company’s disposal of expired durian products resulted in an inversion of the revenue and cost of quick-frozen fruits and vegetables.
Prior to this, juice and sauce supply chain companies had also experienced failed IPOs. For example, Dexin Food mainly produces flavored syrups, drink syrups, and toppings, and is a supplier to Luckin Coffee, Starbucks, and Mixue Ice City; Fresh Beverage mainly produces jams, fruit pellets, and frozen juice bases, and also mainly supplies Mixue Ice City. However, both companies voluntarily withdrew their IPO applications in 2023.
Picture taken by: Jiemian News Ma Yue
Another concern is that for almost all leading raw material manufacturers in the industry, large customers generally contribute a high proportion of their revenue.
“Judging from the current industry situation, fruit juice concentrate is a segment that is more affected by price wars.” Lin Yue, an analyst at Lingyan Management Consulting, said in an interview with Jiemian News that suppliers of this type have almost no bargaining power in front of leading customers such as Luckin and Mixue Bingcheng. The root cause is product homogeneity and high customer concentration.
Although each company is working hard to expand new brand customers and develop C-end retail business to diversify risks, the orders from large customers are huge. Once downstream brands adjust product formulas, switch suppliers, and build their own upstream factories, the supplier’s revenue will be directly affected.
One change is that the competitive landscape of the downstream tea and coffee industry is reshaping the survival rules of the upstream supply chain.
In recent years, brands such as Mixue Bingcheng, Luckin, and Guming have built their own raw material factories, locked orchards and coffee bean bases in production areas, and brought back some of the raw materials originally purchased from external sources for self-production. This also directly squeezes the basic business space of third-party supply chain manufacturers.
At the same time, downstream price wars continue to be transmitted upstream. In order to maintain cost performance, tea and coffee brands continue to reduce raw material procurement costs. However, it is difficult for upstream suppliers to completely pass on the pressure of rising raw material prices to brand customers.
This also means that the industry growth logic of the supply chain must also shift from following the downstream expansion of production to upgrading product structure.
Lin Yue told Jiemian News, “In addition to the price war, suppliers must undergo transformation and upgrading. For example, non-hydrogenated base milk can fully replace non-dairy creamer. In terms of functions, the needs for intestinal health, slimming, and fire removal are becoming mainstream. Ingredients with the same origin as medicine and food such as turmeric and kale are accelerating the integration, and the rise of Luo Han Guo sugar substitutes is the direction in which suppliers should work. In other words, in the future, tea beverage suppliers need to shift from the role of raw material suppliers to providers of ‘flavor solutions.'”
Jiahe Food, a supplier of non-dairy creamer, experienced a revenue contraction but a sharp increase in net profit in the first half of 2026, which reflects the company’s self-rescue results to a certain extent.
Jiemian News saw in its financial report that the company’s revenue in the first half of this year was 1.131 billion yuan, a year-on-year decrease of 4.62%; its net profit was 28.6468 million yuan, a significant year-on-year increase of 130.41%.
This is due to the decline in raw material costs and internal management. The gross profit margin of Jiahe Food’s B-end business has steadily increased. Operating costs have dropped by 6.90% year-on-year. The decline is greater than the revenue decline, and the profit margin has been effectively broadened. In addition, C-end business sales revenue increased by 79.33% year-on-year to 103 million yuan, becoming an engine for profit growth.
Due to the obvious trend of “removing non-dairy cream” in downstream tea drinks in recent years, Jiahe Food has transformed into plant-based and other directions. In the first half of this year, plant-based business revenue reached 92.3288 million yuan, a year-on-year increase of 51.89%. It continues to launch new functional products such as low GI oat milk, DHA walnut milk, and Coffee Master oat milk.
In addition to product structure upgrades, developing C-end products and expanding channels and customers is also a self-help transformation strategy for this type of supply chain company.
Hema drinks manufactured by Wei Ke Xian. Photo taken by: Jiemian News Ma Yue
Hema drinks manufactured by Wei Ke Xian. Photo taken by: Jiemian News Ma Yue
For example, Weikexian also launches HPP ready-to-drink drinks for the consumer side, such as cold brew tea, HPP juice, etc., which are sold through Hema, Oriental Selection, Fat Donglai, Douyin, JD.com, Tmall and other channels.
An interview with Jiemian News found that Hema’s “HPP Cold Extract White Bud Qilan Oolong Tea” and “HPP Kale Compound Fruit and Vegetable Juice” are manufactured by Weikexian, and the retail prices of single bottles are about 5.19 yuan and 7.2 yuan respectively. HPP ready-to-drink beverages will account for only 15.07% of Weikexian’s revenue in 2025, but the gross profit margin of this business is 25.29%, which is slightly higher than the 23.4% of ready-made beverage ingredients.
