Centurium Capital has finalized its acquisition of Blue Bottle Coffee. Recent reports indicate that the investment firm signed an agreement with food and beverage giant Nestlé to purchase all global physical store assets of Blue Bottle Coffee for up to $400 million. Centurium will take over store operations and brand management, while Nestlé retains the fast-moving consumer goods business of Blue Bottle, including coffee beans, capsule coffee, and ready-to-drink beverage product lines.
Founded in California in 2002, Blue Bottle Coffee has been referred to as the "Apple of the coffee world." The brand is known for using only beans roasted within 48 hours, emphasizing fresh roasting, handcrafted brewing, and minimalist aesthetics, with an average cup price exceeding 40 yuan. In 2017, Nestlé acquired a 68% stake in the company for $425 million, valuing each store at over $12 million at the time. Blue Bottle entered the Chinese market in 2022, opening its first store by Shanghai’s Suzhou River, and currently operates 22 stores in the country.
The transaction is notable due to Centurium Capital’s role as the controlling shareholder of Luckin Coffee Inc. Following Luckin’s accounting scandal in 2020, Centurium facilitated debt restructuring and management changes, eventually becoming the major stakeholder. As of February 2025, Centurium held 31.3% of Luckin’s shares and 53.6% of voting rights. In April of the same year, Centurium’s founding partner Li Hui assumed the role of Luckin’s chairman. By February 2026, Centurium completed an internal acquisition of 136.2 million Class B ordinary shares of Luckin, adjusting its stake to 23.3%.
As Luckin’s de facto decision-maker, Centurium has been actively seeking mid-to-high-end coffee chain acquisitions. In July 2025, it participated in the bidding for Starbucks China, and later that year, it was reported to be interested in acquiring Coca-Cola’s Costa Coffee, valued at up to £1 billion. The acquisition of Blue Bottle Coffee is seen as a move to enhance Centurium’s premium brand portfolio and address Luckin’s growth pressures.
According to the latest annual report, Luckin Coffee reported total revenue of 49.288 billion yuan in 2025, a 43.0% year-on-year increase, with net profit reaching 3.600 billion yuan, up 21.8%. However, the fourth quarter continued a trend of revenue growth without corresponding profit growth. Quarterly revenue rose 32.9% year-on-year to 12.777 billion yuan, while net profit fell sharply by 39.1% to 518 million yuan. By the end of 2025, Luckin’s store count exceeded 30,000, but only 1,834 new stores were added in the fourth quarter, a 39.0% decline from the previous quarter.
These figures suggest that Luckin’s scale-driven growth model is showing signs of strain.
Same-store sales growth for self-operated stores slowed to just 1.2%, while delivery costs surged 94.5% year-on-year in the fourth quarter. The price war, initially centered on 9.9-yuan beverages, has been compounded by a delivery battle initiated by major internet platforms such as Meituan, JD.com, and Alibaba. Heavy subsidies have driven down the effective price of beverages, but high order volumes have not translated into profitability due to rising delivery and service costs.
This "false prosperity" is reflected in Luckin’s financials. First, same-store sales growth slowed significantly as platform subsidies allowed mid-to-high-end brands like Grid Coffee and M Stand to lower prices, while tea brands such as Guming and ChaBaiDao introduced coffee products to capture market share. Luckin’s core price-sensitive customer base overlapped significantly with the target audience of the new round of price competition, weakening brand loyalty.
In the fourth quarter of 2025, Luckin’s average monthly transacting users fell 12.4% quarter-on-quarter to 98.351 million. Average spending per user dropped 4.6% to 43.30 yuan. While seasonal declines are typical, the double-digit drop in user numbers was unprecedented, indicating customer diversion amid the delivery war.
At the store level, average monthly revenue per self-operated store fell 19.6% quarter-on-quarter to 157,300 yuan, nearly returning to levels seen in the fourth quarter of 2022. Same-store sales growth for self-operated stores was a mere 1.2%, far below the 13.4% and 14.4% growth rates seen in the second and third quarters of 2025.
Second, rising delivery costs significantly eroded profits. In 2025, total operating costs reached 44.215 billion yuan, up 43.1% year-on-year. While costs for raw materials, rent, and depreciation grew at a slower pace than revenue, delivery expenses surged 143.8% to 2.821 billion yuan, accounting for 14.0% of total revenue, up from 8.2% in 2024.
In the fourth quarter alone, delivery costs jumped 94.5% year-on-year to 1.631 billion yuan, contributing to an operating cost-to-revenue ratio of 93.6%, compared to 89.5% a year earlier. As a result, store-level operating profit margin fell to 15.0%, down 4.6 percentage points from the same period in 2024.
As the delivery war subsides, Luckin faces the pressing challenge of raising prices. The company has begun limiting the use of 9.9-yuan coupons to specific beverages and reducing promotions such as "first cup free" and "buy two get one free." Some items in the 9.9-yuan menu now require an additional 3-yuan fee, and customization options have pushed average spending to 10-15 yuan.
Additionally, Luckin’s 30,000th store in Shenzhen introduced a premium coffee series, including specialty hand-drip and cold brew options priced between 15.9 and 19 yuan. The two-story flagship store features an open brewing bar, art installations, and an interactive tasting space.
Expansion abroad is another strategy for premiumization. In June 2025, Luckin opened two stores in Manhattan, with prices ranging from $3.45 to $7.95, or approximately 23.71 to 54.65 yuan—more than four times domestic prices. However, overseas markets are highly competitive, and Luckin’s low-cost model has yet to prove profitable, as seen with its Singapore store, which remains unprofitable since opening in April 2023.
Upscaling requires higher-quality beans, skilled staff, larger stores, and better decor—all of which challenge Luckin’s lean cost structure. Moreover, premium brands like Blue Bottle Coffee prioritize exclusivity over rapid expansion. Since its acquisition by Nestlé in 2017, Blue Bottle grew from 55 to only 140 stores by August 2025, averaging 17-18 new stores per year, compared to Luckin’s daily net addition of nearly 24 stores in 2025. Long store preparation cycles and commercial location choices have diluted Blue Bottle’s brand appeal in China, and the 24-year-old chain remains unprofitable.
The question remains whether Blue Bottle Coffee, struggling on its own, can effectively support Luckin’s upmarket transition. Financial markets await an answer.
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