Luckin Coffee is rewriting the playbook for how coffee chains innovate. From minty coconut lattes to a Moutai latte that sold 5.4 million cups in a day, the brand keeps churning out new – and sometimes funky – flavours.
In 2024 alone, Luckin launched 119 new SKUs. But how?
Tune in as Weihan and Sabrina explore:
- Luckin’s data-driven R&D and “horse racing” approach to product development; Why odd-sounding creations (grape fizz Americano, anyone?) actually sell?;How Luckin is rolling out country-exclusive flavours as it expands globally.
And of course, we had to do a live taste test, because talking about funky flavors is one thing, but trying them is another.
Timestamps:
00:00:00 – Luckin launches way more drinks a year than Starbucks
03:10:00 – Data over creativity: Luckin’s product development
06:20:00 – How Luckin launches a new drink every 3 days
08:30:00 – What Luckin might brew just for the U.S.
12:40:00 – MW taste test: Grape fizzy americano?
Featured materials:
Inside Luckin Coffee: Strategy, model, and international playbook, Momentum Works
How can Luckin Coffee launch 119 new drinks in a year, TheLowDown
E123: Luckin Coffee brings manufacturing back to the USA?, Impulso Podcast
Luckin Coffee copies Chagee’s best selling drink, TheLowDown
Also available on Spotify
[AI-generated transcript]
[00:00:00] Sabrina: Hello everyone, and welcome to the Impulso Podcast by Momentum Works. So I think it’s very obvious what today’s topic is going to be about. Not sponsored, not product placement. But before we begin, don’t forget to like and subscribe to our channel if you guys enjoy this video, and of course, stay tuned to the end of this video for a very interesting taste test.
We’re gonna put these cups to good use. So today we’re gonna be talking about Luckin Coffee, and more specifically the product and products development of Luckin Coffee. Right. So in 2024, Luckin Coffee launched 119 SKUs. That’s one new drink almost every three days.
[00:00:41] Weihan: Mm-hmm.
[00:00:41] Sabrina: That’s mad. So for reference, I think Starbucks launches about 30 plus SKUs in terms of beverage SKUs. Yeah.
[00:00:49] Weihan: So those are the ones that are more publicly known. I think for Luckin’s 119, it probably also includes non drinks as well,
[00:00:57] Sabrina: but the 30 plus for Starbucks is drinks, so beverage and ready to drink, but of course that’s just what’s publicly announced.
It doesn’t take into consideration, I think southern countries have more specific launches. But it’s interesting ’cause Luckin launches 119 SKUs
[00:01:12] Weihan: mm-hmm.
[00:01:12] Sabrina: In a year. And some of these drinks are very weird. So this is a minty coconut latte. So coconut latte is their top selling drink. There’s a mint version.
This is Orange Americano.
[00:01:23] Weihan: Yeah. Also one of the top sellers.
[00:01:25] Sabrina: Yes. They sell a hundred million cups annually, but. A weird combination.
[00:01:29] Weihan: We have never tried it,
[00:01:30] Sabrina: by the way, we’re gonna try later. Stay tuned to the end of the video. This is a special Singapore exclusive drink that we’ll talk a little bit more about later.
And then of course, this grape fizzy Americano. Which sounds even weirder than orange Americano. ’cause this is fizzy
[00:01:45] Weihan: carbonated
[00:01:46] Sabrina: How does Luckin create all these drinks? Because I don’t think it’s just random, right?
[00:01:51] Weihan: Mm-hmm.
[00:01:51] Sabrina: Because these drinks are interesting.
They’re funky, but they also sell well. So this orange Americano sounds weird. They managed to sell a hundred million cups.
[00:01:59] Weihan: Mm-hmm.
[00:02:00] Sabrina: They have their cheese latte. How many did they sell?
[00:02:02] Weihan: I think it’s about 1.3 million Cups.
[00:02:05] Sabrina: Since launch.
[00:02:06] Weihan: Not since launch, I think in the launch day, it probably hit that number of cups.
We can find out more in our report actually. We have a lot of information about that.
[00:02:15] Sabrina: Oh yes. We talk more about this in our report. They also had a Moutai latte. So this was two years ago you tried the Moutai latte?
[00:02:23] Weihan: Yes, I’ve tried it.
So for those who don’t know, right? Moutai, it’s a Chinese liquor that it’s very known for. Its very fragrant smell as well as a very intense and high alcohol concentration. So I think I tried it in China. Like one to two years ago, and I think I didn’t really like it, but some of my colleagues did.
To me it tasted a bit weird because even though both alcohol and coffee, they’re. Bitter, but then there’s definitely a bitterness to it. And I think I had a very biased view because I came out of a cab feeling really car sick, and then I drank the coffee and Moutai latte, so I was feeling horrible afterwards.
But some of my colleagues really liked it and they actually went back to buy it again. The Moutai latte,
[00:03:10] Sabrina: they sold about 5.4 million cups on their first day.
[00:03:14] Weihan: Yes. I think they. Kind of like crashed the system if I’m not wrong
[00:03:18] Sabrina: so Luckin in China is only app ordering.
[00:03:20] Weihan: Mm-hmm.
[00:03:20] Sabrina: So I think the whole system crashed where they couldn’t locate like your nearest store that had the Moutai latte just because of how hot it is.
[00:03:27] Weihan: Yeah.
[00:03:27] Sabrina: But of course, I think the benefit of the Moutai is Moutai, is a really known brand in China, and so it peaked people’s curiosity, right?
[00:03:35] Weihan: Mm-hmm.
[00:03:35] Sabrina: But for its other products like Orange Americano, where it’s not a collaboration, what is the.
R and D process behind how Luckin actually develops these products?
[00:03:44] Weihan: If you look at it the broad way, it’s quite similar to what. A lot of other companies do r and d. They do like planning, and then afterwards they do like designing ideation and then they do trials, and then finally it’s the launch.
But I think for Luckin at each stage, I think they do certain things a bit differently. So in the planning phase, we all know that they’re having data from consumers, from the market helps. But I think for Luckin, majority of what they decide to come up next. Heavily relies on whatever data they have, and only a very small portion of it actually comes from the creative side of let’s say, their product people and afterwards
[00:04:26] Sabrina: for this.
[00:04:26] Weihan: Mm-hmm.
[00:04:26] Sabrina: So when you say that a lot of it comes from data, what kind of data are you referring to? So like orders that the customers place. What are popular flavor profiles?
[00:04:35] Weihan: I think you can look at it. Two ways. So one is because Luckin uses the app a lot, right? So they collect a lot of consumer datas and they know what kinds of flavors sell well.
So that’s one point. And the second one is they also look at trends. So what’s trending in terms of social media, let’s say? There was a period of time where oat milk is all the things.
[00:04:55] Sabrina: Mm-hmm.
[00:04:55] Weihan: So they have a lot of oat milk series. So all this data actually inputs into the entire planning process.
Then afterwards, based on this data, then they also have the creative people saying that, Hey, how about we try to incorporate this into whatever trend that is out there. It might work, and then they move on to the next phase. Yeah.
[00:05:13] Sabrina: But also when it comes to their product design, the reason why they’re able to produce, ’cause I’m sure a lot of other companies also use data.
[00:05:21] Weihan: Mm-hmm.
[00:05:22] Sabrina: But Luckin themselves can launch 119 new products, and this is after testing and reiterating as well. So how do they make it such that they can launch almost one product every three days?
[00:05:32] Weihan: I think for them, they have multiple teams working on the same product idea. So I think this is a term that many Chinese companies call it horse racing.
So you have a lot of teams working on the same goal, same target. They come up with lots and lots of ideas.
[00:05:48] Sabrina: Mm-hmm.
[00:05:48] Weihan: So if, let’s say there’s two, three teams working on the same, idea that they came out in the planning phase, they will each come up with, let’s say five to six different product variations, and then they’ll take this five to six to the next phase to try it out.
So actually this gives them a pool of like what 20, 30 at each testing phase to actually try and test whether the product works or not.
[00:06:10] Sabrina: So they have a lot of, they have a very big base to kind of start with the testing. Horse racing is very common a lot of like e-commerce players, e-commerce brands also do, and of course after that I think they, they roll it out to do some taste tests
[00:06:25] Weihan: mm-hmm.
[00:06:25] Sabrina: In selected cities before rolling it out to the full market.
[00:06:29] Weihan: Yeah. They have a taste test First they select a couple of products that did well during the taste test, then they put it into the city test, and then that’s when they’ll finally figure out which product do I really want to launch. So whatever that doesn’t do well, they’ll shelf everything and then.
Based on the test, they will decide, okay, so when I want to launch it and then how I’m gonna launch it. But then there’s one thing interesting when they do all this testing is that for all their products, let’s say you have your orange Americano here, right? They actually quantify every aspect of the product when it comes to their testing phase.
So for example, the sweetness is. One thing that they’ll say, oh, one to 10.
[00:07:09] Sabrina: Mm-hmm. .
[00:07:10] Weihan: One being least sweet. 10 being the most sweet. This one sits about about five. And then they’ll do it for all the other aspects. So you have things like acidity, fragrance, and refreshness. And because you see all this is data, right?
They break it down to data for them to create or come up with. Products, it’s actually just a mix and matching of different combinations of all these metrics together.
[00:07:32] Sabrina: So they kind of find, they found a way to kind of quantify the taste. Like how sweet is it? The acidity?
[00:07:37] Weihan: Mm-hmm.
[00:07:37] Sabrina: The, I dunno, probably citrus-ness.
[00:07:40] Weihan: Yeah. So it’s like, let’s say now I launch Orange Americano, right? They realize that, oh, it does, well, they’ll go back to look at, okay, so this is the breakdown of my flavor profile. And then, hey, my next product I want to create something similar, but. Also has certain characteristics, that makes it stand out.
So I’ll just go and play around with, let’s say the sweetness, the fragrance,
[00:08:01] Sabrina: but it could just be a different ingredient, but similar flavor profile.
[00:08:04] Weihan: Yes.
[00:08:05] Sabrina: If you guys are interested to dive a little bit more into how Luckin’s r and d and product development works, we do have a report report called Inside Luckin Coffee that will be linked down in the show notes below that you guys can check out.
But of course. They’ve launched so many flavors, right? . And they’ve also recently started launching. Country exclusive flavors. . So, obviously we know Singapore was the first market that they expected to outside of China. They’re in Singapore, Malaysia, and the US now, right? And they recently launched secret flavor.
This is a pandan coconut latte. What is Pandan
[00:08:38] Weihan: Pandan? It’s a type of leaf.
[00:08:40] Sabrina: Yeah.
[00:08:41] Weihan: It’s a part of a plant. So the leaf is what makes it fragrant and it’s commonly used in. Southeast Asia for a lot of like desserts as well. Sometimes in cooking your hot food as well.
[00:08:52] Sabrina: So it’s a very local, not Singaporean exclusive, but very local flavor.
Right. And this flavor’s only available in Singapore. They launched about a couple months ago. Yeah.
[00:09:02] Weihan: Somewhere in July.
[00:09:03] Sabrina: But it’s interesting because Luckin has been in Singapore for about two years. . And only after two years, then they. I decided to launch an exclusive flavor.
[00:09:12] Weihan: I think if you look at it initially for the two years, right? A lot of times they’re still trying to understand how the Singapore market is. They’re trying to like collect data to see maybe which products local residents actually like to test. And bare in mind that because. A lot of this r and d actually done at the HQ level, and I think it takes some time for them to really ideate and learn about the market before they can come out with a product that they think would suit the local taste profile.
[00:09:44] Sabrina: But this is not a
seasonal
drink. At least we don’t know.
[00:09:47] Weihan: We don’t know
[00:09:48] Sabrina: if it’s a seasonal drink.
[00:09:49] Weihan: At least it’s. I think it’s probably going to be, my guess is gonna be out for a while, and then if they few people want it, they’ll bring it back again because I mean, it’s very easy for them to just recreate this drink anyways.
[00:10:02] Sabrina: That’s true. They already know
the,
yeah. But it’s interesting, the one thing I noticed about Luckin is when they release new drinks. You don’t actually know if it’s going to be seasonal or if it’s gonna be a permanent ’cause. I feel for Starbucks, it’s a lot clearer. There are drinks that they only release during certain months.
Example, pumpkin spice latte latte only during the fall. But for luckin, sometimes they release, they take it back. They launch it again,
[00:10:26] Weihan: I think.
So this is actually also part of our report. So during the product design phase, right, they actually categorize their products into two different types.
So one is those they call seasonal products, so they know that these products. They won’t want to keep it on the menu for a long period of time. And then they have something called the hero product. So hero products are something they, let’s say, launch one or two annually, but at seasonal products, as you mentioned, seasonal,
[00:10:53] Sabrina: the other a hundred plus products.
[00:10:55] Weihan: So launch, so the amount of resources and time. They give to develop this product is very different.
[00:11:02] Sabrina: How long is Luckin’s product development process as compared to a more traditional coffee chain?
[00:11:08] Weihan: I would say for those that are fast, probably in about two months or so.
[00:11:14] Sabrina: Two
months to develop a new product.
[00:11:16] Weihan: But I would feel that they are constantly in the process of developing products. So they’re handling actually a lot of. Different product, different combinations at once. It’s only a matter of fact whether they launch it or when they launch it.
[00:11:29] Sabrina: So they already have a lot of in the world. I guess that makes sense. How else can you launch like
[00:11:34] Weihan: so many ones, right?
[00:11:35] Sabrina: Yeah. So now of course we know they’ve entered the US recently, if you guys are interested, we did a podcast about that I think a month back where we talked about their launch in New York City and I think it’ll take them a while before they launch us exclusive flavors. But what do you think would be a interesting us. Exclusive flavor for luckin coffee.
[00:11:55] Weihan: Mm. I would feel that they probably will want to try to do some, something similar to the pumpkin spice.
[00:12:03] Sabrina: A hundred percent sure. I think they would do pumpkin spice.
[00:12:05] Weihan: It’s a try and tested flavor that works well in the us
[00:12:08] Sabrina: I think cheese latte might do well there. Something they could launch.
[00:12:12] Weihan: I think it’s, it sounds like a very interesting flavor especially because. I think a lot of, let’s say American desserts already has elements of cheese in it.
[00:12:19] Sabrina: Cream cheese,
[00:12:19] Weihan: so that’s actually a flavor profile that they are very accustomed to and it’s not as weird for them to want to try.
[00:12:25] Sabrina: Jianggan was saying he tried a malt wine latte
[00:12:29] Weihan: in the us.
[00:12:30] Sabrina: No, in China. But I feel that could do well in the us. But it’s interesting, right and they’ll be able to do it. ’cause I think they already have the system and the process in place. So what matters for them is. Finding the right flavor profile and then they’ll be able to replicate that really quickly and all. So before all the drinks melt and before we end the podcast, we are going to do a taste test, as we say at the start of the video. So we will do the taste test first, and then I’m gonna get everyone else to do the taste test.
So this is the orange Americano that sold a hundred million cups annually.
[00:13:04] Weihan: I think it’s more than that. It’s more than that. Here,
[00:00:00] Sabrina: It tastes like orange juice that has been left in the fridge. Too long.
[00:00:03] Weihan: Yes, I agree.
[00:00:04] Sabrina: Right?
[00:00:05] Weihan: Yes.
[00:00:06] Elody: Times.
[00:00:08] Sabrina: Oh, you tried before?
[00:00:09] Elody: Yeah, of course.
[00:00:09] Sabrina: You like it.
[00:00:10] Elody: I like it. It’s quite refreshing. It’s more of a orange juice flavor.
[00:00:15] Teng Lun: This one is okay.
[00:00:18] Sabrina: It doesn’t look the color original coffee.
[00:00:21] Hailey: Maybe it’s has. Lemon. Lemon.
[00:00:24] Sabrina: Close, close, close, close, close.
[00:00:25] Weihan: Do you like it?
[00:00:27] Hailey: Maybe
[00:00:34] Sabrina: It looks like doing shots in the office.
[00:00:36] Blythe: Wow.
[00:00:38] Sabrina: Elody likes this. Wait.
[00:00:40] Blythe: Oh really?
[00:00:41] Sabrina: They sell a hundred million cups a year.
[00:00:43] Weihan: This is one of the best selling ones in China.
[00:00:46] Blythe: Is this only useful when you are very tired and get this to waking yourself?
[00:00:56] Sabrina: Hahahaha, I think it’ll be weird ’cause it,
[00:01:01] Elody: it’s not as sweet as, because that one is quite sweet as a orange juice
flavor.
[00:01:06] Sabrina: ASMR,
[00:01:07] Teng Lun: I think so
[00:01:09] Weihan: for me, because I’m drinking coffee and then I have pop.
[00:01:12] Elody: Yes, correct. That’s pop with coffee pop coffee flavor pop.
[00:01:16] Sabrina: I was gonna say, the initial taste was quite nice.
’cause Oh, I taste, that was the grape. Then the coffee came in and then I was like, oh,
[00:01:22] Elody: Didn’t stir the cup properly. That’s why the first flavor the is
[00:01:26] Sabrina: is grape.
[00:01:27] Elody: I honestly, I feel it’s not as good as the orange one. What do you think?
[00:01:31] Sabrina: I think ’cause it’s fizzy.
[00:01:32] Teng Lun: I think these two are quite weird for me. I won’t order it myself.
[00:01:35] Elody: The fruity flavor,
[00:01:44] Sabrina: she’s so thrown off by
[00:01:47] Sophia: When you say, when you taste the grape
then it becomes the coffee.
[00:01:53] Weihan: Do you like it?
[00:01:56] Hailey: A little bit. ’cause I think it’s not good than coffee with milk.
[00:02:01] Sabrina: Okay, good.
[00:02:02] Blythe: Wow. The coffee flavor. And it is quite strange.
[00:02:05] Sabrina: Which is better?
This one or this one?
[00:02:08] Blythe: Grape is better.
[00:02:09] Sabrina: Oh, grape is better, I think because grape, the initial grape flavor is a lot stronger.
[00:02:14] Blythe: Yeah, it’s sweeter.
[00:02:16] Sabrina: Okay. We move to a milk flavor. Okay. I don’t tell you this, I, I let you guess why
[00:02:21] Elody: I pretty much already saw it. Go ahead.
[00:02:25] Sabrina: I hide this.
I’ve never tried this, actually,
[00:02:31] Teng Lun: it’s my favorite. Coconut. Oh, I think soap.
[00:02:35] Sabrina: It doesn’t, no, no, no. You can’t taste the mint.
[00:02:37] Teng Lun: Yeah. Yeah. It’s not that strong.
[00:02:39] Sabrina: Right? Oh, I don’t know why I thought it would be like, like, you know, my mint candy Uhhuh. I thought that’s the flavor profile that this drink will have.
[00:02:46] Elody: Like, did you figure out is the mint one?
[00:02:47] Teng Lun: It’s after you swallow it and then you have a little bit Oh, in your, it’s
just.
[00:02:53] Elody: Oh, it’s just a bit of coolness.
[00:02:55] Sabrina: Yeah. Yeah. In your,
[00:02:57] Elody: you don’t have a mint taste in your throat.
Yes.
[00:02:58] Hailey: Mmmm, Good.
[00:03:01] Sabrina: This is nice.
Sophia is very pleased. From the coconut. No, no, the coconut on. So they like
[00:03:10] Sophia: This taste like normal coffee
[00:03:12] Sabrina: What flavor? This?
[00:03:14] Blythe: This is not, eh? Is this coconut? It’s like mint, yeah, yeah, yeah. Mint.
[00:03:19] Sabrina: Oh. Oh. So you can taste it. I couldn’t taste it. Okay. Okay. Last one.
[00:03:22] Elody: This is the last one?
[00:03:23] Sabrina: Yeah, last one. Try.
[00:03:24] Teng Lun: I know it. I think this one.
[00:03:26] Sabrina: I know she drink before.
[00:03:28] Teng Lun: I think this one
tastes better than the one I ordered before. I don’t know why.
[00:03:33] Sabrina: I don’t like What kind of latte? What kind of milk do you think it is? You should know this,
[00:03:42] Sophia: this taste like a Filipino dessert, right? Well, it’s called, Buko Pandan so it’s like a coffee version of it.
[00:03:54] Weihan: You like, so you like this?
[00:03:56] Sabrina: Southeast Asian flavor profile flavor. Oh, I don’t know if you know this flavor.
[00:04:03] Blythe: Wow. This is very milky
[00:04:07] Sabrina: new Singapore flavor Pi Pa Gao latte. I would drink a Pi Pa Gao latte.
[00:04:13] Blythe: Wow.
[00:04:14] Sabrina: You can suggest to Luckin.
The post Inside Luckin Coffee: How they launch 119 drinks a year | Impulso E131 first appeared on The Low Down - Momentum Works.
