Luckin Coffee looks for alcoholic jolt with new drink in China
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Luckin Coffee (OTCPK:LKNCY) rolled out a sauce-flavored latte with a jolt of Moutai liquor on Monday. The new drink was priced at 38 yuan ($5.20) . Notably, the coffeehouse chain is partnering with alcohol maker Kweichow Moutai on the product, which will contain lower than 0.5% of alcohol by volume.
The new drink has already created strong buzz in China, with "Moutai coffee" a top trending subject on social network Weibo late on Monday. Food and drink analyst Zhu Danpeng thinks the partnership between Moutai and Luckin Coffee (OTCPK:LKNCY) could provide a strong boost to the sales and brand exposure of each company in China.
"By working with Luckin Coffee, Moutai has made its brand younger and has generated more opportunities to develop its extended product portfolio for younger consumers in the future," noted Zhu. "The move is elevating Luckin's brand as well," he added.
The launch of the Moutai-flavored coffee is not the first time a major coffee chain has dabbled with alcoholic mixed drinks. Starbucks (SBUX) launched Bar Mixato in China in 2019. Looking ahead, industry watchers expect more beverage innovation and new products to hit the market due to increasing demand from younger consumers for combining soft drinks with spirits.
As for Moutai, the alcohol is described as a style of baijiu, a distilled Chinese liquor, made in the town of Maotai in China's Guizhou province.
Luckin scorecard: Shares of Luckin Coffee (OTCPK:LKNCY) are up 30% on year-to-date basis. The coffee chain stock trades well above the 100-day and 200-day moving averages. Seeking Alpha analysts have a consensus Buy rating on the name.

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