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  • Chagee sees double-digit revenue growth in first quarter

    Chagee sees double-digit revenue growth in first quarter

    Chagee, a renowned Chinese milk tea chain, has reported a significant increase in its net revenues for the first quarter of this year. The figure soared to RMB3.39 billion (US$467.5 million), marking a robust growth of 35.4 per cent compared to the equivalent period last year.

    Financial Highlights of the Quarter

    The first quarter of the fiscal year was marked by strong financial performance for Chagee. The company’s net income also grew considerably, rising 13.8 per cent to RMB677.3 million. Meanwhile, operating income has been notably up from RMB705.9 million to RMB820.2 million, indicating an impressive operating margin of 24.2 per cent.

    Nevertheless, the company had to bear an increase in operating costs, which surged by 42.8 per cent, amounting to RMB2.57 billion year-on-year.

    Expansion Efforts and Product Innovation

    Chagee’s expansion strategy took a leap forward as they inaugurated key stores in Malaysia and Singapore during this quarter. The successful launch was followed by the opening of new outlets in Indonesia and the US in the consecutive months of April and May.

    Staying true to its commitment to product innovation, Chagee continued the introduction of new products. They included a range of low-caffeine beverages, designed to cater to the preference of customers who enjoy their teas later in the day.

    Questions & Answers

    What was the percentage growth in Chagee’s net revenues for the first quarter compared to the same period last year?
    Chagee’s net revenues for the first quarter of this year grew by 35.4 per cent compared to the same period last year.

    What new markets did Chagee enter during this quarter?
    Chagee entered the Malaysian and Singaporean markets this quarter, followed by expansions into Indonesia and the US.

    What new product line did Chagee introduce recently?
    Chagee introduced a new line of low-caffeine beverages, allowing customers to enjoy their teas later in the day.

  • Coffee prices soar to record high as supply shrinks

    Coffee prices soar to record high as supply shrinks

    Coffee prices surged 11.3% to a historic high of VND98,100 (US$3.95) per kilogram on Wednesday as inventories dwindle and production is forecast to decline.

    The price represented a 110% increase from a year ago. On online coffee business forums, many farmers and traders have expressed surprise at the unprecedented prices, which were around VND70,800 at the beginning of the year.

    Prices also rose globally, with the May robusta LRCc2 futures contract rising to an all-time high of $5,999 per ton and the May Arabica KCc1 to $4,186.5. According to Nguyen Hai Nam, chairman of the Vietnam Coffee Cocoa Association, the sharp increase in prices is due to a decline in production and record low inventories.

    He said droughts in coffee-growing countries caused by climate change and the El Nino phenomenon have declined global production. His association expects coffee harvests to be 10% lower this year since farmers have shifted to other crops due to low prices in recent years. Shipping disruptions and freight hikes due to the Red Sea tensions also contribute to higher global prices, he added.

    The skyrocketing prices have heavily impacted traders. Nguyen Loan, a coffee merchant in Dak Lak Province, said she is cutting back on purchases due to the record prices, pointing out that even large traders are hesitant to stock up on coffee.

    “I previously agreed to sell 1,000 tons of coffee to an exporter at VND70,000 per kilogram. At the current prices, I cannot procure enough stock to deliver.”

    Phan Minh Thong, chairman of agricultural products exporter Phuc Sinh Group, said coffee merchants are demanding as much as VND99,000 per kilogram.

    The company had to make some small purchases and bear the losses to maintain its operations.

    “The company has faced huge losses recently. We will incur bigger losses if we buy more.”

    According to traders, importers are now buying coffee from India and Brazil instead of Vietnam because of its high prices.

    With Brazil’s coffee crop set to harvest in April, prices in the global market might soon cool down.

    In the first two months of the year Vietnam exported 438,000 tons of coffee for $1.4 billion, according to data from the General Department of Customs.

    They represented increases of 28% and 85% year-on-year.

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  • Campos picked up by Dutch coffee giant for undisclosed sum

    Campos picked up by Dutch coffee giant for undisclosed sum

    Australian coffee chain Campos will be acquired by international pureplay JDE Peet for an undisclosed sum, with the transaction expected to be completed next month.

    Campos serves customers through direct-to-consumer, retail, and its own flagship cafes, as well as being available in over 600 cafes nationwide – channels that complement JDE Peet’s Australian retail operations.

    “We’re incredibly proud of what we have achieved from our humble beginnings on the streets of Newtown in Sydney,” said Campos founder Will Young.

    “We are confident that Campos can and will continue to grow under JDE Peet’s stewardship by continuing to focus on what made us Australia’s number one specialty coffee brand – high-quality coffee and great service.”

    JDE Peet’s general manager in Australia and New Zealand Albert Moncau said the Campos business is the “perfect fit” for the pureplay giant.

    “We look forward to welcoming the Campos team to our world of coffee and tea, learning from each other’s expertise and building on their award-winning coffee experience,” Moncau said.

    JDE Peet also owns and operates the L’OR, Moccona, Harris, Piazza Doro, Espresso di Manfredi, Two Seasons and Pickwick coffee and tea brands in Australia

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