NEW YORK -- Starbucks' China competitor Luckin Coffee is reaching for bottled juice as it thirsts for new areas of growth.
The Nasdaq-listed beverage chain will launch a juice brand via a joint venture with European agricultural conglomerate Louis Dreyfus, which will produce not-from-concentrate fruit juices for sale in Luckin Coffee stores and elsewhere.
"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," Luckin co-founder Guo Jinyi said in a statement Thursday.
The Xiamen-based company's announcement came the same month it unveiled Luckin Tea, an independently branded chain with a focus on smaller Chinese cities.
But while tea has always been popular in China, fresh-squeezed juice remains a relatively small market where Luckin expects rapid growth. Not-from-concentrate juice accounts for less than 5% of China's fruit juice market, according to Shenzhen-based market research firm Qianzhan -- a far cry from the more than 70% in Japan.
Louis Dreyfus, which has been in the juice business for more than 30 years, hopes that Luckin's digital retail know-how and rapport with consumers will help it tap the Chinese market.
Founded in 2017, Luckin rose to become one of China's best-known coffee brands thanks in part to its app-based model, aggressive marketing and discounts. It aims to have more than 4,500 locations by the end of 2019, surpassing Starbucks' 4,000-plus Chinese tally to become the nation's largest coffee shop chain.
The Louis Dreyfus deal is not Luckin's first international tie-up. In July, Luckin signed an agreement with Kuwait's Americana Group, an integrated food company that operates 1,900 restaurants, to explore business in the Middle East and India.
Luckin is backed by BlackRock and Steven Cohen's hedge fund Point72.
