Mixue's Disruption of the Global F&B Market: Can It Outperform Starbucks in the Era of Value Consumption?

The global food and beverage (F&B) industry is undergoing a seismic shift. Chinese beverage giant Mixue, with its hyper-affordable pricing and explosive store expansion, is challenging the long-standing dominance of Western chains like Starbucks. As consumers increasingly prioritize value over brand prestige, the question looms: Can Mixue's value-driven model outperform Starbucks' premium positioning in a cost-conscious market? Let's dissect the numbers, strategies, and risks to determine where the puck is headed.

The Mixue Playbook: Scalability, Affordability, and Franchise Power

Mixue's rise is nothing short of meteoric. By September 2024, it operated 45,302 stores globally, surpassing McDonald's and Starbucks. Its secret sauce? A franchise model that minimizes overhead while maximizing reach. Nearly all of its stores are franchised, with franchisees sourcing ingredients and equipment from Mixue's centralized supply chain. This not only ensures product consistency but also allows the company to generate recurring revenue from ingredient sales rather than relying solely on retail margins.

Financially, Mixue is a high-growth story. Analysts project 16.1% annual revenue growth and 14.8% EPS growth through 2025, with a projected return on equity (ROE) of 22.3% in three years. Its product pricing—like $1.10 for a brown sugar milk tea and 50 cents for an ice cream—cater to budget-conscious consumers, particularly in Southeast Asia, where it has 4,000+ stores. In Indonesia alone, Mixue's 2,667 outlets have captured market share by undercutting local and international competitors.

But scalability isn't without risks. Mixue's franchise model limits local customization, as seen in Lhokseumawe, where a franchise struggled with competitive pressure and rigid pricing. To counter this, the brand is experimenting with localized marketing—think semi-outdoor playgrounds and social media-driven “Making Ice Cream Experience” programs—to differentiate itself in saturated markets.

Starbucks' Struggle: Premium Pricing in a Price-Sensitive World

Starbucks, the gold standard of premium coffee, is facing headwinds. Its Q3 FY2025 results revealed a 47% drop in GAAP EPS and a 680-basis-point operating margin contraction to 9.9%. The culprit? A “Back to Starbucks” strategy that prioritized labor investments, store renovations, and customer experience over short-term profitability. While these moves are necessary for long-term health, they've squeezed margins in the near term.

In North America, comparable store sales fell 2%, driven by a 3% drop in transactions. Starbucks' premium pricing—$3.50 to $5.50 for a cup of coffee—struggles to compete with Mixue's value offerings, especially in price-sensitive markets like Indonesia and Vietnam. Even in China, where Starbucks has 7,758 stores, CEO Brian Niccol admitted the company is exploring partnerships to rejuvenate its local business.

Yet Starbucks isn't without strengths. Its brand equity, global supply chain, and innovation pipeline (think cold brews and plant-based options) remain formidable. The company also maintains a $55.5 billion market cap, dwarfing Mixue's valuation, and has a 61-quarter dividend streak. Its recent $1.75 billion bond issuance and focus on operational efficiency suggest a path to margin recovery.

The Value-Driven F&B Landscape: Who Wins?

The key to this showdown lies in consumer behavior. In Southeast Asia, where disposable incomes are rising but still modest, affordability is king. Mixue's ability to deliver high-quality, trendy beverages at a fraction of Starbucks' price has made it a household name. A single mother in Jakarta can treat her child to a $1.10 milk tea without guilt, while a Starbucks customer in the same city might hesitate at $3.50.

However, Starbucks' premium positioning still resonates with affluent consumers and tourists. Its “third place” concept—where the store is a destination for work and socializing—remains unmatched. The challenge for Starbucks is balancing this premium image with the need to innovate in lower-price categories.

Investment Implications: Balancing Growth and Resilience

For investors, the choice between Mixue and Starbucks hinges on risk tolerance and time horizon. Mixue offers explosive growth potential, with a 42.3% year-on-year revenue surge and a ROE trajectory that suggests strong future returns. Its franchise model and low-cost structure make it a compelling play in value-driven markets. However, its lack of brand recognition outside Asia and vulnerability to local competition (e.g., Chatime in Indonesia) pose risks.

Starbucks, meanwhile, is a more stable but slower-growth bet. Its $55.5 billion market cap reflects confidence in its long-term brand power and global footprint. While its recent margin pressures are concerning, the company's focus on operational efficiency and innovation could restore profitability by 2026. Investors seeking dividend income and brand resilience may prefer Starbucks.

The Verdict: A Tale of Two Strategies

Mixue's disruption of the F&B market is undeniable. Its value-driven model has redefined affordability in a sector once dominated by premium pricing. However, Starbucks' brand strength, global reach, and innovation pipeline ensure it remains a formidable player.

For now, the data suggests a dual-approach strategy:
1. High-growth investors should consider Mixue's IPO (if it materializes) or its regional expansion in Southeast Asia.
2. Conservative investors may lean on Starbucks' dividend yield and long-term brand resilience, betting on its ability to adapt to value-driven trends.

In the end, the F&B war isn't just about store counts—it's about who can best balance affordability with quality in a world where every penny counts. Mixue has the momentum; Starbucks has the legacy. The winner? It depends on where you're willing to place your chips.