Source | Zhibo ID | exact-interaction Author | Zhibo
On September 30, Mixue Group announced that it had acquired a 53% stake in Fresh Beer Fulujia through capital increase and equity transfer, with a total transaction consideration of approximately RMB 297 million. Public information shows that Fresh Beer Fulujia was established in 2021, positioned as "affordable craft fresh beer," and is the first brand in China to receive national standard "fresh beer" certification. It currently has about 1,200 stores across 28 provincial regions. According to statistics, as of September this year, Fulujia had 716 operating stores, covering 155 cities in 27 provinces nationwide. In the announcement, Mixue Group stated that through this investment, the group's product categories will "extend from freshly made fruit drinks, tea drinks, ice cream, and coffee to freshly drawn fresh beer," meaning its "beverage" territory and sales time slots will further expand, from Mixue Bingcheng selling tea drinks and Lucky Cup selling coffee during the day, to Fulujia selling beer. The strong connection between Fresh Beer Fulujia and Mixue Group has long been rumored in the industry. In April this year, Beijing Business Today reported on Fulujia, mentioning it as a new sub-brand under Mixue. Also in March-April this year, several bloggers researching store franchising mentioned that Fulujia is a "sister brand" and "incubated brand" of Mixue Bingcheng. A more direct connection is that Fulujia's actual controller, Tian Haixia, is the wife of Zhang Hongfu, CEO of Mixue Group. Before this transaction, Tian Haixia directly held 60.05% of Fulujia's equity and indirectly held 20.41% through Zhengzhou Mailang Tongzhou Enterprise Management Partnership. Mixue Group mentioned in the announcement that the pricing of this related-party transaction was based on a report from a third-party evaluation agency and was reviewed and approved by the company's internal related-party transaction committee. After the transaction, Tian Haixia's shareholding will be reduced to 29.43%. On one hand, it is an "incubated brand" with close ties since its inception; on the other hand, it is the largest tea drink group in China that has long tried to find a second growth curve through sub-brands like "Lucky Cup." This transaction coming to the forefront seems more like Fulujia's business model and market prospects have been recognized by the group to some extent, giving it a public identity. So, what kind of business does "Snow King" intend to do by selling beer? We visited one of its only six stores in Beijing for a small experience. A Fresh Beer Store Where Fruit Beer Sells Best For residents living in the city center, getting to any of Fulujia's current stores in Beijing is not easy. Starting from Dawanglu CBD in Beijing, the farthest of these six stores is in Huairou, 49 kilometers away, and the nearest is also more than 17 kilometers in a straight line, in the southern sixth ring road, which is suburban of suburban, requiring a half-hour drive one way. This is very similar to Mixue Bingcheng's early "rural surrounding the city" path, which is to first validate the business model in lower-tier markets where competition is relatively weak, achieve scale replication, win reputation with cost-effectiveness, and then enter areas with higher spending power. From the statistics of Narrow Door Restaurant Insights, we can also see this "rural surrounding the city" approach. Currently, the province with the most Fulujia stores is Henan, Mixue's home base, with 240 stores, followed by Shanxi with 60 stores, Shandong with 56 stores, and Hebei with 52 stores. Fulujia is clearly following the same old path as Mixue Bingcheng and Lucky Cup: "First win the four provinces of Shanxi, Hebei, Shandong, and Henan, then win the world." Despite the remote locations of its Beijing stores, Fulujia's site selection still has its own calculations. Its store in Majuqiao, Tongzhou, on the southern sixth ring road, is not in a bustling shopping center or high-rise area, but it is located at the corner of a food street, surrounded by affordable BBQ restaurants, grilled fish restaurants, skewer hotpot, and hotpot restaurants, as well as markets and commercial streets, attracting many people who have a demand for hearty beer drinking and cost-effective consumption. Another person researching store franchising pointed out that Fulujia stores are also suitable for opening near night markets and university towns. Fulujia's storefront and interior design also carry some of Mixue Bingcheng's DNA: the sign is equally eye-catching bright red, with a cute large logo paired with straightforward large characters; the interior design is also red-dominated, and even the ordering counter and menu design are very similar to Mixue Bingcheng. From the menu at the counter, you can see how "affordable" its "affordable fresh brew" really is: currently, Fulujia has 19 SKUs. Except for a few canned "family ration beer," the main products are sold by weight. The cheapest product is Fulujia Fresh Beer at 5.9 yuan/500ml, and the highest-priced but most concentrated price range is the fruit beer, milk beer, and tea beer series at 9.9 yuan/500ml. Similar to how most Mixue Bingcheng tea shops sell snacks, Fulujia's counter sells traditional beer snacks like melon seeds, peanuts, and edamame, priced from 1 yuan to 10.8 yuan. Selling a glass of beer at Fulujia is very simple. After the customer orders, the employee directly draws beer from the fresh beer tank on the wall behind and packs it. There is no step of preparing ingredients, mixing, or proportioning like in tea or coffee shops; the foolproof operation makes standardization higher. The Majuqiao Fulujia store has a business area of less than 10 square meters, no dine-in seating, and only two employees. To some extent, you can understand this as a store type with lower labor costs and operational difficulty. When we asked the staff which products sell best and wanted some recommendations, the answers gave us a rough idea of what kind of business Fulujia wants to do. The staff said that besides the cheapest "Fulujia Fresh Beer" and "German Wheat," the best sellers are actually various fruit beers. For example, the currently popular "Real Pineapple Beer" and another "Bold Grapefruit" are both labeled as "low-calorie." If you prefer a stronger fruit flavor, you can try "Lychee Wheat from Chang'an" or "Crazy Sugar Orange," and if you like sour, you can try "Berry Explosion." After the staff's explanation, we found that besides traditional fresh beer, Fulujia's milk beer, fruit beer, and tea beer have lower alcohol content compared to most craft beers and fresh beers on the market, but with more diverse flavors, and even more eye-catching names. Some bloggers who reviewed its non-traditional fresh beers also mentioned that these products have a lighter beer taste and stronger sweetness and fruitiness. Best-selling products, staff recommendations, and review experiences make Fulujia seem not just to sell affordable fresh beer, but more beverage-like alcoholic drinks, thus attracting more consumers through both cost-effectiveness and product form. According to the "2024 Beer Industry Research Report" released by Shangqi Industrial Research Institute, the market size of craft beer in China will grow from 6.8 billion yuan in 2023 to 11 billion yuan in 2028, with penetration rate increasing to 6.3%. If we consider all the low-alcohol sweet beers sold by Fulujia, including fruit beer and milk beer, as "low-alcohol drinks," then according to China Alcoholic Drinks Association data, by 2025, the market size of low-alcohol drinks in China will exceed 74 billion yuan, with a compound annual growth rate of 25%. Whose Business to Do, and Whose Business to Take Since Fulujia is selling a lower-alcohol, beverage-like fresh beer, in the "alcohol selling" business, it is highly likely to replicate Mixue Group's logic of "freshly made + low price + beverage-like" from tea drinks and coffee. According to Narrow Door Restaurant Insights statistics, among offline stores selling craft beer or freshly drawn fresh beer, the average customer spending at Taishan Original Pulp Beer, Helen's, Delunbao Craft Fresh Beer, and Ubrew Craft Beer Bar are 44.3 yuan, 65.9 yuan, 31.8 yuan, and 42.04 yuan respectively, while Fulujia's average customer spending is 17.02 yuan, almost one-third to one-half of the above brands. Some retail channels have brought down the price of craft fresh beer. For example, Hema's private brand "Super Refreshing Fresh Beer" sells for 9.9 yuan/1L, its "Osmanthus Sugar Orange Fresh Beer" and "Craft Lemon Oolong Fresh Beer" sell for 9.9 yuan/500ml, and Dingdong Maicai has "Double Hop Craft Fresh Beer" at 15.92 yuan/1.5L and "German Wheat Craft Beer" at 12.9 yuan/1L. However, these equally low-priced craft fresh beers have a shelf life of about 28 days, which is clearly different from Fulujia's freshly made, with staff repeatedly emphasizing "drink as soon as possible, otherwise the taste changes." In addition, while being affordable, Fulujia adds more SKUs with novel flavors, lower alcohol content, and beverage-like characteristics, which is obviously more likely to attract consumers who want to try new flavors, only want to be tipsy rather than drunk, and do not have high requirements for craft beer quality. In the past, Mixue Bingcheng not only took users from other tea shops with cost-effectiveness but also took some packaged beverage users from convenience stores and supermarkets with freshly made freshness. Fulujia's "freshly made + low price + beverage-like" may also attract consumers from both the catering and supermarket channels. And Mixue Group, which is essentially a supply chain company, can provide the most basic supply chain guarantee for Fulujia's "freshly made + low price + beverage-like." As the enterprise with the largest production scale and the most complete product categories in the domestic freshly made beverage supply chain, Mixue Group self-produces over 60% of its beverage ingredients, and even 100% of core beverage ingredients, making its procurement costs far lower than the industry average. Mixue Group also self-produces core packaging materials and equipment such as straws and cups, and even reduces the cost of packaging bottles for honey and fruit syrup by 50%. Fulujia has already invested in a craft beer factory in 2022. It is conceivable that the bargaining power of large-scale centralized procurement and self-procurement of core ingredients and packaging materials are also highly likely to be reused by Mixue for Fulujia to reduce raw material costs. Selling fresh beer, cold chain logistics is the most critical, and this is where Mixue Group may empower Fulujia. Public information shows that Mixue Group's cold chain logistics network has 26 first-level warehouses nationwide, capable of processing 11,700 tons of goods per day during peak periods, achieving 100% cold chain coverage in 28 provinces, and delivering within 12 hours in most areas. Franchisees use Mixue Group's logistics for free. If this system can be similarly reused for Fulujia, it can also improve its supply chain efficiency and help franchisees save costs. The synergy of the franchise system is also where Mixue Group may empower Fulujia. Fulujia's official website shows that the minimum startup capital for franchising is only 66,000 yuan. Under the same asset-light franchise model, Mixue Group is highly likely to help Fulujia achieve rapid expansion with its franchisee resources and franchise store management experience. According to Narrow Door Restaurant Insights statistics, Fulujia opened fewer than 200 new stores in 2024, but in the first nine months of this year, it has already opened 541 stores. There is no public data yet to confirm the extent to which Fulujia reuses Mixue Group's supply chain, but at least Fulujia already has positive operating results. According to the same announcement, Fulujia's unaudited pre-tax net profit for 2024 was 1.07 million yuan, turning from loss to profit compared to 2023. However, in the extreme affordability of Fulujia's fresh beer, there are indeed some compromises—we packed two fresh beers on the day of our store visit and paid extra for can sealing, but when we opened them an hour and a half later, the gas and beer flavor had already dissipated considerably. But just as "Snow King" consumers show tolerance for Mixue Bingcheng's quality time and again in the face of extreme cost-effectiveness and repurchase repeatedly, a freshly drawn fresh beer that can be as low as 5.9 yuan per jin is destined to have its own loyal consumers.