Can Luckin Coffee, acquired for 9.9 yuan, swallow the "Apple of the coffee industry"?

On March 4, a new development has emerged in the latest round of capital-market rumors roiling the coffee industry for months.

According to LatePost, the controlling party of Luckin Coffee—Dashen Capital—has successfully won the bidding for Nestlé’s premium coffee chain brand Blue Bottle Coffee (Blue Bottle Coffee). The parties are set to complete the transaction with Nestlé. Caixin later cited information from insiders, saying that the two sides had already signed an agreement. Nestlé had hoped to sell for $700 million, while Dashen Capital ultimately acquired it outright for a price of less than $400 million.

In response, Observers Network sought confirmation from Luckin Coffee and Nestlé. A relevant spokesperson for Luckin Coffee said, “At present, there is no response. If we have information, we will synchronize it.” Nestlé said: “We are also looking into the situation at the moment.”

If the report is true, this deal marks the end of Nestlé’s eight-year “marriage” with Blue Bottle Coffee. It also means Dashen Capital—and Luckin Coffee it has invested in—has taken a key step in building a global coffee brand matrix and moving into the premium market. However, behind this acquisition feast, how Luckin’s “fast culture” and Blue Bottle’s “slow genes” will coexist is a rather tricky question for the capital operators to answer.

The eight-year “marriage” comes to an end; Nestlé releases Blue Bottle under financial pressure

According to materials, Blue Bottle Coffee is a U.S. specialty coffee chain founded in 2002 by James Freeman (James Freeman), a clarinet performer. With its extreme freshness philosophy of “selling only coffee beans within 48 hours of roasting,” along with minimalist aesthetics, the brand holds a lofty status among specialty coffee enthusiasts and is hailed as the “Apple of the coffee world.”

In 2017, Nestlé—eager to position itself in the premium fresh-ground coffee market—brought it in, acquiring about 68% of its shares for roughly $425 million. At the time, the deal was seen as a classic case of a traditional instant-coffee giant marrying new consumer forces.

Mark Schneider (Mark Schneider), CEO of Nestlé at the time, had high hopes for the transaction, saying it demonstrated Nestlé’s ambition to focus its investments on high-growth categories and keep up with consumer trends.

But the gap between ideal and reality ultimately surfaced in the cold financial statements. Nestlé’s acquisition of Blue Bottle was originally meant to be an ambitious “gene transplant,” trying to inject the soul of specialty coffee and brand momentum into its massive industrialized system to upgrade its premium strategy. Yet eight years of integration proved that this long-term partnership was, in effect, “indigestion.”

Blue Bottle’s “slow philosophy,” which made it famous—its insistence on selling only coffee beans within 48 hours of roasting, its stringent location strategy based on landmark geographies, and its minimalist, restrained spatial aesthetics—are indeed the foundation of its premium pricing and the “Apple of the coffee world” aura. But they also determine its operating model of “heavy assets and slow returns.”

Data shows that as of August 2025, the total number of its stores worldwide is only about 140. Overall expansion has been slow. Within this, its expansion in mainland China has been even more cautious, with the store count accounting for just one-tenth.

This “slowness,” originally Blue Bottle’s core value, conflicts with the “fast” pace faced by Nestlé as a publicly listed company. And Nestlé’s “fast pace” stems from the financial pressures it has been intensifying in recent years.

In 2025, Nestlé Group’s full-year sales were 89.5 billion Swiss francs, down 2% from 2024. Net profit fell 17% year over year. Even operating profit from underlying transactions dropped 8.4%. The contraction in profit margins shows that cost pressure can no longer be covered by simply raising prices. Moreover, the internal growth rate that reflects real sales is only 0.8%, indicating weak growth momentum. Especially in Greater China, the organic growth rate recorded -6.4%, becoming a major factor dragging down the group’s overall performance.

Against a backdrop of multiple pressures—its share price hitting an eight-year low, key market performance declining, and global infant formula recall events—its new CEO, Philippe Navratil, who took office in September 2025, rolled out what can be described as an aggressive “efficiency first” strategy.

Its core consists of two hardline measures: first, launching a comprehensive divestment covering non-core businesses such as ice cream and drinking water, focusing resources on core categories like coffee, pet care, and nutrition products; second, rolling out the “Fuel for Growth” cost-savings plan, targeting savings of 3 billion Swiss francs per year by the end of 2027, at the cost of about 16,000 global layoffs.

Under this broader backdrop of “clearing house,” Blue Bottle’s “slow expansion” and high-cost operating model, within Nestlé’s industrialized KPI system, have quickly transformed from strategic assets into a financial burden. Instead of delivering the scale growth Nestlé urgently needs, it has become a “pressure point” that needs optimization on the financial statements.

Therefore, Nestlé’s decision to let go is not a denial of Blue Bottle’s brand value; rather, under the rigid requirements of severe financial pressure and strategic contraction, it is an acknowledgement that its own “grafting strategy” failed—an act of rational course correction forced by the capital market.

The question it raises is this: when a premium brand’s “slow genes” encounter the “fast requirements” and “strong financial orientation” of industrialized capital in a crisis, does the latter still have room for error and patience?

Dashen Capital’s chess game: filling in the premium puzzle for Luckin

If Nestlé is making subtraction, then Dashen Capital is making addition in a carefully planned chess game.

The buyer in this deal rumor, Dashen Capital, is by no means a stranger to China’s coffee market. Founded in 2017, Dashen Capital’s founder is Li Hui. It is an industry investment institution focusing on opportunities in healthcare, hard technology, consumer sectors, and enterprise services.

In the consumer space, its investment case most widely known is Luckin Coffee. Dashen Capital was an early financial investor in Luckin Coffee. In 2018, Dashen Capital, Joy Capital, the Singapore government investment company, and Jun Capital jointly participated in Luckin Coffee’s Series A financing, totaling $200 million.

In 2020, after Luckin Coffee’s financial fraud crisis was exposed, Dashen Capital remained firmly optimistic about Luckin Coffee. It not only made additional investments, but also led Luckin Coffee’s bankruptcy reorganization and the “blood replacement” of management, ultimately becoming Luckin Coffee’s controlling shareholder. That is to say, Dashen Capital—and its founder Li Hui—can be described as the behind-the-scenes chess player behind Luckin Coffee’s “rebirth.”

When it moved to acquire Blue Bottle Coffee, the outside world could easily compare it to “Anta in the coffee world”—just as Anta, by acquiring FILA and Arcteryx, builds a multi-brand matrix, Luckin seems to want to replicate the route of “single-brand breakthroughs, multi-brand encirclement.” But when you look deeper, Dashen’s ambition goes far beyond simply completing a brand puzzle.

There were market rumors that Dashen Capital had also competed to acquire Costa Coffee and evaluated acquiring %Arabica, but in the end none came to fruition. Now, if the news is true, Blue Bottle Coffee has fallen into Dashen’s hands, completing the most critical piece in its premium-upgrade puzzle.

Luckin Coffee dominates the domestic market with its 31,000 stores and high-value-for-money model, but its brand positioning has long been trapped by labels like “fast” and “value for money.”

As Wang Zhendong, chairman of Shanghai Feiyue Investment and Management Co., Ltd., previously analyzed to Observers Network, Luckin Coffee already has a mature business model, supply chain, and product lines. However, it has always lacked the label and channel of an international brand. In a market with intensifying competition and increasingly discerning consumers, it needs a premium “vanguard” that can stand up to Manner, Seesaw, and even Starbucks Reserve.

Blue Bottle Coffee happens to provide exactly that possibility. It not only has global brand recognition and a mature supply chain system, it also has the “third-space” operational experience and brand premium capability that Luckin is scarce in.

The integration challenge: how to break the gene conflict between “fast and slow”

Although the blueprint for this deal is attractive, the test for Dashen Capital has only just begun. Can it become the “patient capital” Blue Bottle needs, rather than the next “Nestlé” that loses patience under financial pressure?

Nestlé’s lessons are clear—using financial models that measure instant coffee and capsule coffee machines to gauge a specialty café that needs time to build would only result in going in opposite directions.

Blue Bottle Coffee’s core is “slow culture”—its relentless pursuit of coffee quality, its stringent requirements for spatial design, and the high costs of employee training. These are precisely the brand moat. Luckin Coffee’s moat is “fast”—digitally driven operations, rapid iteration of best-selling products, and extreme compression of costs.

Lin Yue, Chief Consultant at Lingyan Management Consulting, pointed out that the success of the Luckin model lies in its efficient digitalized operating system. But when Dashen Capital tries to inject this system into Blue Bottle, how to avoid diluting Blue Bottle’s brand value through over-commercialization will be the first major hurdle facing Li Hui.

People close to Luckin Coffee revealed that in the second half of last year, Luckin’s internal team was already discussing how to build “high-end big stores,” and they were in frequent contact with “brand-oriented” talent to prepare for integrating a premium specialty coffee brand. But making a specialty brand priced at 30–50 yuan that emphasizes a sense of ritual coexist harmoniously with a digital brand centered on 9.9 yuan—buy and leave on the spot—is absolutely not easy.

A very realistic situation is this: in February 2022, Blue Bottle Coffee’s first mainland China store opened on the banks of the Suzhou Creek in Shanghai. On opening day, it was extremely hot; many consumers queued for 5–6 hours to try it. Even scalpers priced it at 150 yuan per cup. But today, when you walk into Blue Bottle’s Shanghai stores, it’s hard to see the long queues from back then, and even customers are relatively few.

This contrast between hot and cold reflects a common dilemma premium coffee brands face in the Chinese market: freshness fades easily, and loyalty is hard to keep. Once consumers’ sense of novelty fades, whether Blue Bottle can, with support from the new capital, break out of Shanghai and Shenzhen and achieve scaled profitability in a few core commercial districts, while being surrounded by local strong players like Manner and Seesaw, still needs time to be validated.

A successful counterexample may come from Anta mentioned earlier. In 2009, when Anta acquired FILA, which had been losing money year after year, it did not rush to turn it into another Anta or demand it achieve fast profitability. Instead, Anta gave FILA full independence to operate, maintained its premium fashion positioning, continued investing in brand building, and tolerated a cultivation period lasting several years.

It is this “patience” that ultimately transformed FILA into the group’s largest growth engine, proving the immense value of “slow brands” nurtured by “patient capital.”

Now, the same exam question is placed in front of Dashen Capital. Acquiring Blue Bottle is not to turn it into another “fast Luckin” obsessed with store efficiency and table turnover. Instead, it is to protect and activate the “slow genes” that even Luckin envies. Can Dashen withstand its inherent anxiety as an investment institution about the return cycle, and provide Blue Bottle with enough time and space—allowing it to explore a healthy growth path while keeping its tone and identity?

Luckin’s “grand plan” to return to U.S. equities: Blue Bottle could become a key bargaining chip

It is worth noting that the timing and strategic intent of this acquisition are hard not to make people think of Luckin Coffee’s actively pushing “return to Nasdaq” plan.

In 2025, Luckin’s executives repeatedly sent positive signals about going back to list on a U.S. stock exchange. Luckin Coffee co-founder Guo Jinyi publicly stated: “With the guidance and support of the municipal and city government, the company is actively推进相关工作 to return to the U.S. main board listing.”

For any company hoping to be revalued in international capital markets, the current storyline of “high growth + high profits” is undoubtedly important. But a future narrative of “high potential energy + globalization” is equally indispensable.

Luckin’s business model domestically has already reached its ceiling. While there have been attempts at overseas expansion, taking on giants like Starbucks head-to-head in Europe and the U.S.—in the “coffee-native” markets—would be extremely difficult.

Lin Yue analyzed to Observers Network that acquiring Blue Bottle Coffee or Costa Coffee would provide Dashen Capital and Luckin Coffee a shortcut to “borrow a ship to go out to sea.” Luckin’s business segments would also become more three-dimensional and diversified.

On one hand, Blue Bottle Coffee’s roughly 140 stores across Europe, the U.S., and Japan, and elsewhere are equivalent to a ready-made “bridgehead” for Luckin’s global market layout. By using capital operations to inject Luckin with digital operating capabilities and supply chain efficiency, it may activate Blue Bottle’s slow expansion pace.

Wang Zhendong compared it to “Lenovo’s early entry into the European market needing to acquire IBM’s PC business”—using international brands to eliminate trust barriers in overseas markets.

On the other hand, for U.S. stock investors, a coffee army that combines “China speed” with “global aesthetics” offers much greater imagination space than a plain China domestic chain brand.

Wang Zhendong pointed out that this move forms a strategic closed loop of “mutual causation” with the plan to return to U.S. equities: acquiring an international brand facilitates global expansion, and the globalized business outlook in turn provides an important narrative for valuation in the U.S. stock market.

Blue Bottle Coffee’s eight-year change of hands—from Nestlé’s “failed graft” to Luckin’s “test of taking over”—reflects the most realistic paradox in the consumer investment space: brands that most need time to accumulate are often the hardest to match with capital’s demand for speed.

Nestlé let go due to severe financial pressure and strategic contraction, revealing the rigid limitations exposed when an industrialized giant lacks growth momentum in managing premium brands. As for this high-stakes bet combining Luckin and Dashen Capital, the key to success or failure may not lie in operational techniques or supply chain integration, but in whether capital is willing and able to play the role of that “unhurried accompanying runner.”

Anta used a decade to turn FILA from a “burden” into a “beacon,” already writing the script of “patient capital” winning. Now the script is turning to a new page. Luckin’s 9.9 yuan coffee proves its ability to disrupt through efficiency, but Blue Bottle’s test is whether it can prove that it also has the resolve to protect “slow value.”

Capital’s patience may be the moat more scarce than any blockbuster product in this premium game.