Core Insights - The rise of bread festivals in lower-tier cities reflects a growing trend among young consumers seeking upgraded food experiences, similar to those in first-tier cities [3][7][10] - The popularity of these festivals indicates a shift in consumer behavior, where high-end and trendy bread products are now embraced by a wider audience beyond major urban centers [5][19][24] Group 1: Bread Festival Trends - The first bread festival in Lianyungang was announced on November 2, with several other cities like Yancheng and Huai'an following suit, marking a new seasonal trend [3] - Bread festivals, once seen as exclusive to major cities, are now attracting significant crowds in smaller cities, with events in Jiangmen and Shenyang drawing tens of thousands of visitors and substantial sales [12][14] - The pricing of bread at these festivals in lower-tier cities is comparable to that in first-tier cities, with individual items typically priced between 10 to 40 yuan [10][19] Group 2: Consumer Behavior and Market Dynamics - Young consumers in smaller cities are increasingly interested in high-end bread products, leading to a convergence of tastes and preferences with those in larger cities [7][9] - The similarity in vendor offerings between first-tier and lower-tier cities suggests a homogenization of the market, with many brands and products appearing across different locations [9][10] - The expansion of trendy bread brands into smaller cities indicates a strategic move to tap into new markets, as seen with brands like HOT CRUSH [14][19] Group 3: Brand Competition and Market Challenges - Traditional bakery chains are facing challenges, with reports of closures and declining sales, contrasting with the success of new, trendy brands [26][28] - The new wave of bakeries focuses on niche products and unique offerings, often abandoning traditional models in favor of specialized, high-demand items [29][30] - The competitive landscape is characterized by a high turnover of brands, with social media playing a crucial role in driving consumer interest and brand visibility [38][41] Group 4: Cultural and Emotional Factors - The sensory experience of visiting a bakery, including the aroma and ambiance, contributes to the emotional appeal of these establishments, making them popular among consumers seeking comfort and happiness [41][43] - The phenomenon of bread festivals and trendy bakeries reflects a broader cultural shift where consumption is linked to personal identity and social status, particularly among younger demographics [51][52]

Core Viewpoint - The rise of bread festivals in lower-tier cities reflects a growing demand for trendy and high-quality baked goods among young consumers, indicating a shift in consumer behavior and market dynamics in the baking industry [5][7][43]. Group 1: Bread Festival Trends - The first city bread festival was held in Lianyungang on November 2, with several other cities like Yancheng and Huai'an following suit, making bread festivals a new favorite autumn and winter activity [5][6]. - Bread festivals, once considered exclusive to major cities, are now attracting significant crowds in smaller cities, with events in Jiangmen and Shenyang drawing nearly 100,000 and 51,400 visitors respectively, generating substantial sales [13][25]. - The product offerings at these festivals show a remarkable similarity to those in first-tier cities, with many brands and products sharing names and styles, indicating a homogenization of the baking market across different city tiers [9][10][12]. Group 2: Consumer Behavior and Market Dynamics - Young consumers in smaller cities are increasingly seeking "upgraded" bread options, leading to a convergence in tastes and preferences with their counterparts in larger cities [7][8]. - The pricing of baked goods at these festivals is comparable to that in major cities, with most items priced between 10 to 40 yuan, making them accessible to a broader audience [12]. - The popularity of trendy bread products has led to a perception of these items as seasonal or regional specialties, with social media amplifying their desirability [21][24]. Group 3: Brand Expansion and Competition - Many emerging baking brands are using bread festivals as a platform to test new markets and expand their reach, resulting in a proliferation of similar brands across different cities [17][43]. - Traditional bakery chains like 85°C are struggling with declining sales and store closures, highlighting the competitive pressure from new, trendy brands that focus on niche products and social media marketing [25][26][27]. - The baking industry is becoming increasingly fragmented, with a significant number of small brands emerging, as indicated by the report predicting 338,000 bakery stores by 2025, with a large proportion being small-scale operations [34][35].

Core Viewpoint - The once-popular bakery brand 85°C is experiencing a wave of store closures, indicating a significant decline in brand popularity and market presence [2][5][9]. Group 1: Store Closures - Multiple 85°C stores have closed recently, including four in Hangzhou and others in cities like Shanghai, Jiangsu, Tianjin, and Guangdong, highlighting a broader trend of declining business [2][3][4]. - The company plans to close at least 40 unprofitable stores, but the actual number may exceed this estimate based on current closure rates [4][5]. - In 2023, 85°C faced significant losses, with approximately 200 million New Taiwan Dollars (around 46 million RMB) lost in the first half of the year, and projections suggest losses could exceed 400 million New Taiwan Dollars (over 93 million RMB) by 2025 if operational adjustments are not made [5][9]. Group 2: Brand History and Market Position - Founded in 2004 in Taiwan, 85°C initially thrived by offering affordable gourmet coffee and baked goods, quickly gaining market share and becoming a popular brand in mainland China after its 2007 entry [8][10]. - At its peak in 2018, 85°C had over 475 stores in mainland China, but has since struggled to maintain its market position amid increasing competition from local brands and new entrants [8][10][11]. - The brand's decline is attributed to the rise of competitors like Naixue's Tea and other local bakery brands that have captured consumer interest and market share [10][11]. Group 3: Industry Trends - The bakery industry in China is experiencing a dichotomy, with some established brands like 85°C and BreadTalk facing difficulties, while others like Haolilai and Bao Shifu are thriving [12][13]. - The overall market for baked goods is projected to grow, with estimates suggesting it could reach 859.56 billion RMB by 2029, indicating potential opportunities for brands that can adapt and innovate [14]. Group 4: Strategic Recommendations - 85°C should accelerate the closure of underperforming stores to reduce costs and improve efficiency [15]. - The company needs to focus on valuable markets, particularly in Eastern and Southern China, and consider exiting less profitable regions [16]. - Emphasis on product innovation and the introduction of new popular items is crucial for regaining consumer interest and market relevance [17][18].

Core Viewpoint - The closure of multiple 85°C stores in Hangzhou and other cities highlights the challenges faced by the bakery industry, including rising costs and increased competition, despite a projected market growth in the sector. Company Summary - 85°C, a Taiwanese chain established in 2003, expanded aggressively into mainland China starting in 2007, reaching a peak in 2018 with nearly 100 new stores annually [11] - Recently, 85°C has been closing stores, with four locations in Hangzhou shutting down, including the iconic Qingchun Road store [3][7] - The company's parent, Meishi-KY, announced a strategic shift in response to underperformance in specific regions, indicating a broader trend of store closures in the bakery sector [13] Industry Summary - The bakery industry is experiencing a wave of closures, with notable brands like BreadTalk and others also shutting down locations across various cities [13] - Despite the closures, the baking market is expected to grow by 5.2% in 2024, reaching a market size of 110.5 billion yuan, indicating ongoing expansion potential [14] - Future trends in the baking industry are expected to focus on chain operations, product quality, and a blend of online and offline sales strategies, emphasizing health and nutrition [14]

Core Viewpoint - The closure of multiple 85°C stores in Hangzhou and other cities highlights the challenges faced by the bakery industry, including rising costs and increased competition, despite a projected market growth in the sector. Company Summary - 85°C, a Taiwanese chain established in 2003, expanded aggressively into mainland China starting in 2007, reaching a peak in 2018 with nearly 100 new stores annually [10] - The company has recently faced a slowdown in growth, with its parent company, Meishi-KY, announcing a strategic adjustment in mainland China due to underperformance in specific regions and stores [12] - The closure of the 85°C store on Qingchun Road in Hangzhou, which had been operating for over a decade, is part of a broader trend, with four stores in Hangzhou closing recently, including the upcoming closure of the Binjiang store on October 15 [3][6] Industry Summary - The bakery industry is experiencing a wave of store closures, with other brands like BreadTalk and Huan Niu Cake House also shutting down multiple locations [12] - Despite the closures, the baking market is projected to grow by 5.2% year-on-year in 2024, reaching a market size of 110.5 billion yuan, indicating ongoing expansion potential [13] - Industry experts suggest that the future of the baking sector will focus on chain operations, product quality, and a blend of online and offline sales strategies, emphasizing health and nutrition [13]