Luckin's major shareholder, Dachen Capital, may acquire Blue Bottle Coffee, signaling a new shift in the premium and affordable coffee markets?

Recently, there has been a new development regarding the sale of Blue Bottle Coffee, a high-end coffee brand under Nestlé. According to sources, Luckin’s major shareholder, Dachen Capital, has reached an agreement with Nestlé to acquire all of Blue Bottle Coffee’s global brick-and-mortar store assets for less than $400 million.

Nestlé declined to comment on this news. An insider revealed that both parties have clearly defined their business boundaries: Dachen Capital will gain full control of Blue Bottle Coffee’s global physical stores, responsible for store operations and brand experience; Nestlé will continue to retain Blue Bottle’s fast-moving consumer goods business, including coffee machines and capsules.

As the core financial backer behind Luckin, Dachen Capital is not only Luckin’s earliest and largest external investor, holding 31.3% of shares and 53.6% of voting rights, but also became a key pillar in turning Luckin around after its financial scandal. In April last year, Dachen Capital Chairman Li Hui officially became Luckin’s chairman, deeply involved in the company’s operations.

It is worth noting that since the second half of last year, there have been frequent reports that Dachen Capital is interested in acquiring high-end coffee brands, including Starbucks China and Costa. This acquisition of Blue Bottle Coffee is undoubtedly an important step in its strategic layout in the premium coffee market.

Founded in 2002, Blue Bottle is known as the “Apple of the coffee world,” distinguished by its high-end positioning and minimalist design, with slow expansion primarily in high-potential cities. Its first physical store opened in San Francisco in 2005. Currently, it has just over 100 stores worldwide, including 15 in mainland China. The price for a single cup of coffee is around 40 yuan, and sandwiches range from 38 to 48 yuan. Media reports indicate that the brand is still operating at a loss.

Currently, Luckin’s global store count has exceeded 30,000, making it the largest in China’s coffee industry. However, despite its vast “coffee empire,” why does Dachen Capital still want to acquire another brand? Shen Meng, director of Xiangsong Capital, believes that Luckin’s previous aggressive store expansion model proved to be too risky, and acquiring a mature brand aligns better with its growth needs.

In China’s highly competitive affordable coffee market, Luckin has already lost profits amid a “price war.” According to its latest financial report, the company’s total net revenue for 2025 is 49.288 billion yuan, a 43% increase year-over-year; net profit attributable to shareholders is 3.6 billion yuan, up 21.8%, but the net profit margin is only 7.3%, declining for two consecutive years. Not only has revenue growth slowed, but since the second half of last year, there has been a trend of “increased revenue but decreased profit.”

For Blue Bottle Coffee, after being acquired by Dachen Capital, will it choose to accelerate expansion or continue to maintain its “small but beautiful” positioning? Shen Meng believes that Dachen Capital’s choice of Blue Bottle is precisely because its brand positioning differs significantly from Luckin’s. If they were to replicate Luckin’s model after the acquisition, it would be better to invest directly in their own store network.