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The coffee chain taking on Starbucks in China is making a big push into fruit juices.
Luckin Coffee, China’s second biggest coffee brand, is partnering with one of the world’s biggest commodities traders — Louis Dreyfus — to develop its juice business.
The Chinese joint venture will focus on producing co-brandedfresh orange, lemon and applejuices from its own bottling plant, the companies said in a statement.
“We are pleased to be partnering with one of the world’s largest citrus fruit growers and juice suppliers to launch a co-branded Luckin Juice and continue our ambitious growth plans,” said Luckin co-founder Jinyi Guo.
Luckin, which specializes in takeout coffee, has grown rapidly since launching in 2017. It has already opened 3,000 stores across China and plans to overtake Starbucks
(SBUX) as the country’s biggest chain by increasing that number to 4,500 stores by the end of 2019.
Luckin is relying on its technology for orders, deliveries and payments to give it an edge over Starbucks. It’s also offering big discounts and coupons that make many of its coffee products much cheaper. It lost more than $240 million in 2018 and another $181 million in the first half of 2019.
Still, Luckin is loved by investors. The company arrived on Wall Street in May, surging as much as 47% on its first day of trading.The stock closed at $20.37 on Tuesday, still 20% above its IPO price.
Luckin has been selling some of its own fresh juices but it hopes the partnership with Louis Dreyfus willmean it can offer better productsin the world’s fastest-growing market.
The deal is Luckin’s latest step to diversify its business. Earlier this year it started selling tea in China, joining rivals like Starbucks in expanding into the country’s favorite beverage.
CNN Business’ Rishi Iyengar contributed to this report.
