Abstract
Mixue has emerged as one of the most significant supply-chain case studies in the global food and beverage industry. Unlike premium beverage companies that depend heavily on brand prestige, high retail margins and royalty income, Mixue competes primarily through cost control, manufacturing scale, high store density and the centralized supply of ingredients and equipment to franchisees.
As of December 31, 2025, Mixue Group reported 59,823 stores, including 55,356 in mainland China and 4,467 outside mainland China. The group generated RMB33.56 billion in annual revenue and RMB5.93 billion in profit. Approximately RMB32.77 billion—about 97.6% of total revenue—came from the sale of goods and equipment rather than conventional franchise and service fees. These figures reveal the central logic of the Mixue business model: the company is not merely selling beverages through franchised shops. It is operating a vertically integrated industrial supply platform whose retail network creates recurring demand for ingredients, packaging, machinery and logistical services.
This paper evaluates Mixue supply chain management through the lenses of procurement, production, logistics, franchising, digitalization, food safety, risk management and sustainable development. It also examines the limitations of the model, including raw-material volatility, franchise oversight, market saturation, international localization and environmental pressure. The central conclusion is that Mixue’s competitive advantage does not rest on low prices alone. Its low prices are the visible result of a deeper operating system that integrates upstream manufacturing with downstream franchise demand.
Keywords: Mixue, supply chain management, vertical integration, franchising, logistics, procurement, cost leadership, food safety, risk mitigation, sustainability, international expansion
Scope and Terminology
This paper primarily examines the MIXUE Ice Cream & Tea brand, but some financial and network figures are reported at the consolidated Mixue Group level. Mixue Group operated three principal brands during 2025: MIXUE, the Lucky Cup coffee chain and FULU Fresh Beer, which Mixue acquired during the year. Therefore, the reported total of 59,823 stores should not be interpreted as representing MIXUE-branded stores alone.
The most recent complete financial period available at the time of publication is the year ended December 31, 2025. Selected developments from 2026 are included where they illustrate Mixue’s continuing international expansion.
I. Introduction
The global beverage industry is often analyzed as a contest of brands. Starbucks is associated with premium coffee and the “third place” experience. Coca-Cola is associated with global bottling and distribution. Bubble-tea companies often compete through product novelty, social-media visibility and changing flavor trends.
Mixue follows a different logic.
Its stores sell inexpensive ice cream, lemonade, fruit drinks, milk tea and coffee, but the company’s deeper advantage is found upstream. Mixue has built a system that combines large-scale raw-material procurement, centralized ingredient production, proprietary equipment, franchised retail expansion, warehousing, delivery and digital store control.
In practical terms, Mixue converts thousands of independently financed franchise locations into a coordinated source of recurring demand. The stores purchase approved ingredients, packaging materials and equipment through the Mixue system. The resulting volume allows the company to negotiate more effectively with suppliers, manufacture at scale, spread fixed costs across more units and maintain prices that many smaller competitors cannot sustainably match.
Mixue Group describes its competitive foundation as “Supply Chain + Brand IP + Store Operations.” That formulation is revealing. Brand recognition attracts consumers, and store operations determine whether individual locations succeed, but the supply chain is what makes the company’s value proposition economically repeatable.
This makes Mixue particularly relevant to supply-chain professionals. Its success demonstrates that an apparently simple consumer product can become the endpoint of a highly engineered network involving agriculture, commodity purchasing, food processing, packaging, equipment manufacturing, inventory planning, cold-chain management, quality assurance, franchise governance and last-mile distribution.
The central question is therefore not simply how Mixue sells drinks so cheaply. It is how Mixue has organized its supply chain so that low prices, rapid expansion and franchise profitability can reinforce one another.
II. Company Background
A. From a Shaved-Ice Stall to an Industrial Beverage Network
Mixue traces its history to 1997, when founder Zhang Hongchao opened a small shaved-ice business in Zhengzhou, Henan Province. The Chinese name later associated with Mixue was adopted in 1999. In 2005, the company introduced an RMB1 ice cream cone, establishing the low-price positioning that would become central to the brand.
The company’s decisive transition, however, occurred upstream rather than inside its stores. In 2012, Mixue established centralized production facilities. In 2014, it began constructing its own logistics system. These developments allowed the company to standardize ingredients and recipes while gradually reducing dependence on fragmented third-party production and distribution arrangements.
Mixue opened its first overseas store in Hanoi, Vietnam, in 2018. That same year, it introduced the Snow King mascot, giving the increasingly industrialized company a recognizable consumer identity. By 2020, the network had exceeded 10,000 stores. Its largest production base in Henan became operational in 2021, further expanding manufacturing capacity.
This sequence is important. Mixue did not simply franchise a popular retail concept and then attempt to repair the supply chain afterward. It progressively constructed production and logistics capabilities that could support a much larger retail footprint.
B. Current Scale
At the end of 2025, Mixue Group reported:
- 59,823 total stores;
- 55,356 stores in mainland China;
- 4,467 stores outside mainland China;
- 59,785 franchised stores;
- 38 self-operated stores;
- and 27,450 franchisees.
The network expanded rapidly during 2025. Mixue Group recorded 14,496 store openings and incorporated 1,354 franchised FULU Fresh Beer locations through acquisition. It also recorded 2,527 closures. These figures illustrate both the scale of expansion and the continuing need to monitor location quality, franchise economics and market saturation.
Mixue’s penetration of smaller cities is particularly significant. Of its mainland Chinese stores at year-end 2025, 32,119—approximately 58%—were in third-tier or lower-tier cities. Mixue is therefore not merely a metropolitan beverage company. Its network has been designed to reach consumers in lower-cost markets where value, accessibility and operating simplicity can be more important than premium retail environments.
C. Financial Profile
Mixue Group reported the following results for 2025:
| Financial Measure | 2025 Result | Year-on-Year Change |
|---|---|---|
| Revenue | RMB33.56 billion | 35.2% |
| Gross profit | RMB10.45 billion | 29.7% |
| Profit for the year | RMB5.93 billion | 33.1% |
| Goods and equipment revenue | RMB32.77 billion | 35.3% |
| Franchise and related service revenue | RMB793.9 million | 28.0% |
The revenue composition is more strategically important than the headline growth rate. Franchise and related service fees represented only 2.4% of total revenue in 2025. The overwhelming majority came from selling goods and equipment into the store network.
This separates Mixue from franchise systems that primarily monetize trademarks, royalties and licensing. Mixue’s parent organization earns revenue whenever franchisees replenish ingredients, purchase packaging, install equipment or otherwise consume materials through the approved supply system.
The retail network is therefore both a consumer-facing distribution channel and an internal industrial customer base.
III. Mixue Supply Chain Management
A. A Vertically Integrated Operating Model
Vertical integration occurs when a company controls multiple stages of the production and distribution process rather than relying entirely on outside businesses.
Mixue’s model integrates five major layers:
- Raw-material procurement;
- Ingredient research and development;
- Centralized production;
- Warehousing and distribution;
- Franchise store operations.
The company reports that it self-produces 100% of its core ingredients. Its product solution covers syrups, milk-related ingredients, tea, coffee, fruit preparations, grains and condiments. This does not mean Mixue grows every agricultural commodity or manufactures every item used in its stores. It means that the company has internalized the production of the ingredients it defines as central to its product system.
The distinction matters. Complete ownership of every upstream farm would be impractical and capital-intensive. Mixue instead concentrates control at the stages where formulation, manufacturing scale, standardization and cost have the greatest strategic value.
B. Procurement and Origin Sourcing
Mixue maintains what it describes as an extensive and digitalized global procurement network extending toward raw-material origins. Its scale allows the company to purchase agricultural products, food commodities and auxiliary materials in large quantities. Mixue states that this purchasing volume enables it to secure many core materials at prices below industry averages.
Procurement scale creates several potential advantages:
1. Volume-Based Purchasing Power
A small beverage chain buys for dozens of stores. Mixue procures for tens of thousands. Large purchase volumes can improve bargaining power, justify longer contracts and make suppliers more willing to invest in dedicated production capacity.
2. Reduced Intermediary Costs
Direct or near-origin procurement may eliminate some intermediary markups. It can also improve visibility into harvest conditions, processing methods, quality grades and expected availability.
3. Specification Control
Centralized procurement allows Mixue to define consistent technical requirements for tea, coffee, dairy-related inputs, fruit products, sweeteners and packaging. Individual franchisees are not expected to identify and qualify their own suppliers.
4. Consolidated Demand Forecasting
Orders from a large store network can be aggregated into broader purchasing forecasts. This enables the company to coordinate procurement with expected product launches, seasonal demand and regional consumption patterns.
Procurement scale, however, does not eliminate commodity risk. It can actually increase exposure when a company becomes dependent on large quantities of a narrow set of ingredients. Tea, coffee, sugar, dairy products and fruit are all affected by weather, disease, agricultural cycles, labor conditions, transportation costs and international trade policy.
The decline in Mixue’s gross margin on goods and equipment—from 31.2% in 2024 to 29.9% in 2025—was partly attributed to higher procurement costs for certain raw materials. This demonstrates that even a highly integrated supply chain remains exposed to external price pressure.
C. Centralized Production
Mixue established centralized manufacturing in 2012 and currently operates five production bases in:
- Henan;
- Hainan;
- Guangxi;
- Chongqing;
- and Anhui.
These locations provide a degree of geographic distribution while allowing production to remain centrally managed. The facilities manufacture standardized ingredients that can be transported to warehouses and then distributed to stores.
Centralized production supports the business model in several ways.
First, it shifts technical complexity away from the retail store. A franchise location does not need to extract, formulate or manufacture every ingredient from its original agricultural form. It receives standardized components that can be assembled according to defined procedures.
Second, centralized production improves consistency. A lemonade or milk-tea product sold in one city should use materially similar ingredients and preparation specifications as the same product sold elsewhere.
Third, manufacturing scale lowers average unit costs when fixed costs are spread across sufficiently high volume. Production equipment, research laboratories, quality-control personnel and factory systems become more economical when serving a network of tens of thousands of stores.
Fourth, internal production protects process knowledge. Ingredient formulations, processing techniques and equipment specifications can be treated as part of the company’s operating intellectual property rather than fully outsourced to independent manufacturers.
The result is an unusual combination: an asset-light store network supported by comparatively asset-intensive upstream infrastructure. Franchisees finance and operate most retail locations, while Mixue invests more heavily in the industrial platform supplying them.
D. Warehousing and Distribution
Mixue began building its own logistics system in 2014. As of December 31, 2025, its mainland Chinese warehousing network consisted of 28 warehouses. Its distribution system covered 33 provincial-level regions and more than 300 cities. Mixue had also established local warehousing and delivery systems in eight overseas countries.
An internal or closely controlled logistics network provides several advantages over a purely outsourced model:
- More consistent delivery standards;
- Better coordination between factories, warehouses and stores;
- Improved traceability;
- Greater control over inventory allocation;
- Faster response to regional shortages;
- Reduced dependence on franchisees arranging local transportation;
- and increased visibility into actual store-level consumption.
Store density is crucial to the economics of this network. Delivering to one remote store may be expensive. Delivering to dozens or hundreds of stores within a regional route allows transportation, warehouse labor and inventory costs to be divided across a much larger volume.
This creates a geographic density advantage. As store concentration increases, the supply chain may become more efficient. As the supply chain becomes more efficient, the company may support lower prices or improve franchise margins, making additional store expansion more attractive.
However, density can eventually become congestion. Too many nearby stores may divide demand among franchisees faster than the supply chain saves money. Mixue must therefore distinguish between logistical density, which can create efficiency, and commercial saturation, which can destroy store-level profitability.
E. Franchisees as a Coordinated Demand Network
Mixue’s franchisees own their stores and remain responsible for store-level operating results. They are also required to follow standardized procedures and purchase approved supplies and equipment through the company’s system. Mixue provides support involving site selection, training, store operations and digital management.
This arrangement allocates capital and risk in a highly strategic manner.
Franchisees generally finance:
- Store leases;
- Interior construction;
- Local employees;
- utilities;
- daily retail operations;
- and much of the risk associated with an individual location.
Mixue retains greater control over:
- Brand standards;
- recipes;
- ingredients;
- equipment;
- procurement;
- manufacturing;
- logistics;
- digital systems;
- and operating procedures.
The arrangement allows Mixue to expand stores without funding the entire retail estate from its own balance sheet. At the same time, compulsory or highly centralized supply purchasing creates demand for Mixue’s upstream products.
This may be described as an asset-distributed expansion model. Store-level capital is distributed among thousands of franchisees, while supply-chain intelligence and industrial capacity remain concentrated within the parent organization.
F. Digital Supply-Chain Management
Mixue’s digital infrastructure spans online ordering, store operations, supply-chain management and corporate administration. Its proprietary applications and mini-programs provide direct consumer interaction and first-party demand information.
Digitalization can connect several otherwise separate processes:
- Consumer purchases indicate real demand.
- Store inventory records indicate remaining stock.
- Franchise orders indicate replenishment requirements.
- Warehouse systems indicate regional availability.
- Production systems indicate manufacturing capacity.
- Procurement systems indicate future raw-material needs.
When these systems operate together, the company can move closer to demand-driven planning. A regional increase in lemonade sales can influence warehouse replenishment, production scheduling and ultimately procurement of lemon-related materials.
Mixue has also deployed smart drink dispensers in more than 13,000 MIXUE stores. The company states that these machines improve efficiency and product standardization while reducing food-safety risks.
Automation is especially valuable in a value-priced franchise network. Complex products normally require more employee training and create greater opportunity for inconsistent measurements. Automated dispensing can reduce dependence on worker judgment, improve portion control and help limit ingredient waste.
The larger strategic objective should not be automation for its own sake. It should be the creation of a measurable chain of custody from procurement through consumption: what was purchased, where it was processed, when it was shipped, which store received it and how it was used.
G. Quality Control and Food Safety
Mixue describes its quality-control framework as a digitalized, farm-to-table system covering direct sourcing, production and logistics. Its broader ESG disclosures describe controls extending through product development, supplier management, processing, warehousing, delivery, store operations and consumer service.
The company reports several layers of store monitoring, including self-inspections, regional or headquarters reviews and specialized spot checks. It has also expanded the use of intelligent equipment and store-monitoring systems intended to detect noncompliant procedures. These measures should be understood as company-reported controls rather than independent proof that violations cannot occur.
Food safety is not a secondary risk for Mixue. It is a systemic risk.
A problem at one independent store may remain local. A contaminated ingredient produced centrally and distributed across thousands of stores could spread through the network before the source is identified. Vertical integration therefore gives Mixue greater control, but it also concentrates responsibility.
A mature food-safety system must include:
- Supplier qualification;
- microbiological and chemical testing;
- allergen controls;
- lot-level traceability;
- temperature monitoring;
- preventive maintenance;
- sanitation verification;
- store-level compliance data;
- complaint escalation;
- withdrawal and recall procedures;
- and public crisis communication.
Mixue’s manufacturing scale makes these controls more important, not less.
IV. Cost Leadership and Competitive Advantage
A. Low Prices as a Supply-Chain Outcome
Mixue is known for inexpensive products. Its core MIXUE products in China were typically priced between RMB2 and RMB8 during 2025. Mixue Group stated that its broader product portfolio was generally positioned around approximately one U.S. dollar per item.
It would be a mistake to interpret this pricing as simple discounting.
Persistent low prices require the entire operating model to be designed around cost. A company cannot sustainably sell inexpensive products merely by accepting lower margins at the counter. It must reduce the cost of ingredients, labor, equipment, packaging, transportation, store construction and customer acquisition.
Mixue addresses these costs through:
- Large-scale procurement;
- centralized ingredient production;
- standardized store formats;
- limited preparation complexity;
- franchise-funded retail expansion;
- high-density distribution;
- strong brand recognition;
- automated equipment;
- and recurring sales of supplies to franchisees.
In this model, low prices are not the strategy by themselves. They are the consumer-facing output of the strategy.
B. The Mixue Supply-Chain Flywheel
Mixue’s growth can be understood as a reinforcing cycle:
More stores create more aggregate purchasing demand.
That demand allows Mixue to procure and manufacture at greater scale.
Greater scale can reduce average costs and improve supply availability.
Lower costs support competitive consumer pricing and potentially stronger store-level traffic.
Higher traffic can attract additional franchisees.
Additional franchisees expand the store network and restart the cycle.
The cycle is strongest when each participant receives real value. Consumers must receive acceptable products at attractive prices. Franchisees must earn a reasonable return after rent, labor, supply purchases and delivery-platform costs. Mixue must generate sufficient margin to maintain factories, warehouses, research, technology and quality control.
The flywheel weakens when one party absorbs too much of the pressure. For example, consumer discounts may increase sales volume but reduce franchise profit. Higher raw-material costs may protect Mixue’s revenue while making store economics less attractive. Excessive expansion may increase parent-company supply sales while dividing consumer demand among nearby franchisees.
Sustainable growth therefore requires more than increasing the store count. It requires maintaining the economics of the entire network.
C. Penetration of Lower-Tier Markets
Mixue’s concentration in third-tier and lower-tier Chinese cities is a major competitive advantage. These locations may offer lower rents and labor costs than major metropolitan districts, while consumers may be particularly responsive to accessible pricing.
The company’s standardized operating model also reduces the need for elaborate store environments. Mixue does not need every location to function as a premium lounge. Many stores can emphasize visibility, takeaway service, product speed and neighborhood convenience.
This improves geographic reach but introduces a long-term constraint. Lower-cost markets are not infinitely expandable. As store numbers rise, Mixue must rely increasingly on accurate trade-area analysis rather than assuming that another store automatically creates additional demand.
D. Revenue Throughput Versus Royalty Maximization
Mixue’s 2025 financial results show that service and franchise fees accounted for only 2.4% of total revenue. The company’s economic engine is the recurring sale of goods and equipment.
This can produce better incentive alignment than a model based primarily on high fixed franchise fees. Mixue benefits when stores remain open and continue ordering supplies. A franchisee that fails quickly may generate an initial equipment sale, but it does not create durable supply demand.
Nevertheless, incentive alignment is not automatic. Mixue may still benefit from network expansion even when individual store economics are deteriorating, particularly if new openings generate equipment and initial inventory sales. Governance systems should therefore measure franchisee health, not simply parent-company shipment volume.
V. Supply-Chain Challenges and Risks
A. Raw-Material Price Volatility
Tea, coffee, sugar, milk-related products, fruit and packaging materials are exposed to fluctuating input costs. Weather events, agricultural disease, energy prices, exchange rates, tariffs and transportation disruptions can all affect procurement.
Mixue’s 2025 results provide a direct example. Although goods and equipment revenue increased substantially, the gross margin for that business declined from 31.2% to 29.9%, partly because of higher procurement costs for certain raw materials.
Mixue must decide how such increases are distributed among:
- The parent company;
- suppliers;
- franchisees;
- and consumers.
Raising consumer prices may weaken the brand’s central value proposition. Raising franchise supply prices may damage store profitability. Absorbing the cost centrally may reduce funds available for expansion and infrastructure. The company therefore needs category-specific hedging, substitution planning and menu engineering rather than a single response to inflation.
B. Agricultural and Climate Risk
Many Mixue products depend on climate-sensitive agricultural inputs. Fruit yields, tea quality, coffee production, dairy feed costs and sugar availability can change rapidly under drought, flooding, heat, pests or disease.
Large-scale procurement may provide bargaining power but also creates concentration. If a high-volume product depends on a specific region, variety or processing facility, a disruption can affect thousands of stores.
Mixue should treat climate risk as a supply-planning variable rather than a distant environmental concern. Procurement teams need geographic origin maps, water-risk assessments, alternative varieties and prequalified substitute suppliers.
C. Manufacturing Concentration
Five production bases provide more redundancy than a single central factory, but manufacturing remains a potential point of systemic failure. Fire, flooding, power loss, equipment breakdown, contamination, cyber disruption or transportation interruption at a major facility could affect a significant portion of the network.
The company should continuously evaluate:
- Which products are single-sourced internally;
- whether production can be transferred among facilities;
- how quickly alternative capacity can be activated;
- which spare parts are critical;
- and how many days of inventory are available for essential ingredients.
Vertical integration reduces dependence on outside manufacturers, but it also means Mixue cannot simply blame a supplier when internal production fails.
D. Franchise Quality and Operational Control
A franchise network can expand far faster than a company-owned network, but it also creates thousands of separate points of operational risk.
Individual operators may underinvest in labor, sanitation, equipment maintenance or inventory rotation. Employees may ignore recipes to increase speed or reduce waste. Stores may purchase unauthorized materials, misrepresent products or mishandle consumer complaints.
Mixue attempts to control these risks through standardized procedures, training, digital systems and store inspections. Yet the challenge grows as the network expands across different languages, labor markets, legal systems and cultural expectations.
The relevant management question is not whether Mixue has standards. Most large franchise systems do. The question is whether the company can detect deviations early enough to prevent local misconduct from becoming a global brand event.
E. Store Saturation and Franchisee Economics
Mixue Group opened 14,496 stores during 2025 while recording 2,527 closures. Rapid gross openings can conceal weaknesses in the underlying portfolio if management focuses only on the final net increase.
Potential symptoms of saturation include:
- Falling sales per store;
- shorter franchise tenure;
- increasing closure rates;
- greater dependence on promotional discounts;
- conflict over territory;
- delayed supplier payments;
- and franchisees transferring or abandoning stores.
Mixue needs transparent cohort analysis showing how stores opened in different years perform over time. Network growth should be evaluated through store survival, cash return and franchisee renewal—not merely openings.
F. Food-Safety and Recall Risk
Because Mixue centrally produces and distributes core ingredients, contamination can spread across a large geographic area. The same integration that supports consistency may magnify the consequences of a production failure.
A major incident could involve:
- Microbial contamination;
- undeclared allergens;
- chemical residues;
- improper refrigeration;
- foreign objects;
- fraudulent raw materials;
- or sanitation failures.
The company reports a farm-to-table quality-control framework and multiple layers of store oversight. The effectiveness of these controls ultimately depends on traceability speed, testing quality, enforcement and organizational willingness to stop distribution when uncertainty remains.
G. International Supply-Chain Localization
Mixue’s Chinese supply chain benefits from scale, infrastructure and store density developed over many years. Reproducing that system internationally is substantially more difficult.
In 2025, the number of group stores outside mainland China declined from 4,895 to 4,467. Mixue specifically reported an operational optimization of stores in Indonesia and Vietnam while entering Kazakhstan and the United States.
This is an important warning against assuming that a successful domestic franchise model can simply be exported.
International markets introduce:
- Customs procedures;
- food-import restrictions;
- local labeling laws;
- currency volatility;
- longer lead times;
- different consumer preferences;
- halal or other certification requirements;
- varying cold-chain capabilities;
- local employment laws;
- and unfamiliar franchise regulations.
Importing ingredients from China may initially protect consistency, but it can increase freight costs and lead times. Local sourcing can reduce those costs but may weaken standardization until local suppliers reach the required specifications.
Mixue must therefore globalize its supply chain in stages. Store expansion that moves faster than local warehousing, procurement, quality control and training will eventually create operational instability.
H. Digital and Cybersecurity Risk
The more Mixue connects store orders, payments, consumer applications, inventory, logistics and manufacturing, the more dependent the organization becomes on reliable digital systems.
Potential risks include:
- Ransomware;
- theft of consumer information;
- franchise account compromise;
- manipulation of supplier records;
- disruption of warehouse systems;
- falsified quality data;
- and prolonged platform outages.
Digitalization makes the supply chain more visible and efficient, but it also creates new centralized points of failure. Mixue needs network segmentation, access controls, offline continuity procedures, vendor-security standards and regularly tested recovery systems.
I. Sustainability and Regulatory Pressure
Mixue’s value proposition depends on enormous physical throughput. Each additional drink can require a cup, lid, straw, sleeve, bag, label and multiple ingredient packages somewhere upstream.
A low unit price may encourage high consumption volumes, meaning that small amounts of packaging per transaction can accumulate into a substantial environmental footprint across tens of thousands of stores.
The company has reported initiatives involving degradable utensils, packaging trials, logistics-material reuse, supplier sustainability assessment and localized sourcing in certain markets. These are relevant measures, but stakeholders will increasingly expect quantified results rather than descriptions of programs.
VI. Risk Management Strategies
Mixue already uses several mechanisms to control supply-chain risk. These include centralized procurement, multiple production bases, digital supply-chain management, standardized franchise procedures, internal logistics, origin sourcing, store inspections and automated dispensing equipment.
However, the scale and international direction of the company require a more formal enterprise-wide risk architecture.
A. Supplier Diversification
Mixue should avoid relying on a single supplier, growing region or processing facility for strategically essential inputs unless no viable alternative exists.
A mature system would classify supplies according to:
- Revenue importance;
- food-safety severity;
- replacement lead time;
- number of qualified suppliers;
- geographic concentration;
- climate sensitivity;
- and inventory shelf life.
Critical materials should have documented secondary sources that have already been tested, audited and approved—not merely a list of suppliers that might be contacted after a disruption.
B. Multi-Tier Supply-Chain Mapping
Companies often know their direct suppliers but have limited visibility into the farms, processors, chemical producers, packaging plants and transport providers further upstream.
Mixue should map critical supply chains beyond the first contractual tier. This is particularly important for agricultural products, food additives, packaging resin, paperboard and specialized machinery.
Multi-tier mapping would allow Mixue to identify situations in which apparently separate suppliers rely on the same upstream processor or geographic region.
C. Strategic Inventory Segmentation
A uniform inventory policy is inappropriate for a product portfolio with different demand patterns and shelf lives.
Mixue should distinguish among:
- Fast-moving core ingredients;
- seasonal ingredients;
- imported materials;
- short-shelf-life products;
- high-risk ingredients;
- equipment spare parts;
- and promotional packaging.
Essential, stable ingredients may justify larger safety stocks. Perishable or trend-sensitive products require shorter planning cycles. Critical machine components may have low usage but severe consequences if unavailable.
D. Flexible Manufacturing Capacity
Mixue should design production standards so essential ingredients can be manufactured at more than one facility wherever technically and economically practical.
This requires:
- Compatible equipment;
- standardized processing instructions;
- replicated quality tests;
- transferable formulations;
- emergency production schedules;
- and preplanned logistics alternatives.
The goal is not to duplicate every production line. It is to prevent the failure of one facility from eliminating the company’s ability to supply a major product category.
E. Franchisee Health Monitoring
Mixue’s digital platform should be used to identify franchise distress before a store closes.
Relevant indicators include:
- Declining order volume;
- persistent inventory shortages;
- reduced opening hours;
- employee turnover;
- customer complaints;
- excessive discounting;
- delayed payments;
- and sales cannibalization after nearby openings.
The company should create franchisee-health dashboards rather than relying primarily on supply shipments. A store purchasing initial equipment is not necessarily a healthy store. Long-term recurring orders supported by sustainable consumer demand are the more important measure.
F. Independent Food-Safety Verification
Internal controls should be supplemented by credible external audits and laboratory testing.
Mixue should publish meaningful performance indicators such as:
- Supplier rejection rates;
- audit completion rates;
- corrective-action closure times;
- product withdrawal statistics;
- traceability test results;
- and verified incident rates.
Transparency would not eliminate risk, but it would make the company’s food-safety claims more measurable and credible.
G. International Localization Gates
International expansion should proceed through clearly defined operational gates.
Before large-scale store development, a market should demonstrate:
- Reliable regulatory and customs procedures;
- qualified importers or local suppliers;
- sufficient warehouse capacity;
- food-safety laboratory access;
- trained field-support personnel;
- digital integration;
- equipment maintenance capacity;
- and commercially viable franchise economics.
A market that cannot meet these conditions may support a limited pilot, but not aggressive franchising.
H. Integrated Scenario Planning
Mixue should regularly model combined disruptions rather than assessing each risk separately.
A realistic scenario might involve:
- A fruit crop failure;
- higher sugar prices;
- port congestion;
- currency depreciation;
- and a product recall occurring during peak seasonal demand.
Scenario exercises should involve procurement, production, logistics, information technology, food safety, finance, communications and franchise operations. The purpose is to identify where formal plans fail when several problems occur simultaneously.
VII. Mixue Value Chain Analysis
A value-chain analysis identifies the activities through which an organization creates and retains economic value.
A. Primary Activities
1. Inbound Logistics
Mixue obtains agricultural commodities, food ingredients, packaging materials and equipment inputs through a large procurement network. Scale, origin relationships and centralized specifications support cost and quality control.
2. Operations
The company converts raw materials into standardized syrups, tea ingredients, coffee products, fruit preparations, milk-related ingredients, condiments and other store supplies through five production bases.
3. Outbound Logistics
Twenty-eight mainland Chinese warehouses and a distribution network covering more than 300 cities move ingredients and equipment from production sites to stores. Local warehouse and delivery systems have also been established in eight overseas countries.
4. Marketing and Sales
Mixue combines accessible pricing, high store visibility and the Snow King character. The brand’s familiar theme song and visual identity help generate consumer awareness without requiring every store to undertake expensive local brand development.
5. Service and Franchise Support
Mixue provides franchisees with site-selection support, training, standardized operating procedures, supply access and digital tools. These services help convert independent operators into a more coordinated retail network.
B. Support Activities
1. Procurement Infrastructure
Large-scale purchasing supports product affordability and creates leverage with suppliers.
2. Technology Development
Product R&D, ingredient formulation, digital ordering, automated dispensing and data analysis support standardization and efficiency.
3. Human-Resource Development
Training is required at factories, warehouses, regional offices and franchise stores. International expansion increases the importance of multilingual and market-specific training.
4. Corporate Infrastructure
Finance, risk management, legal compliance, quality assurance and franchise governance coordinate a network that spans tens of thousands of independent locations.
C. Where Mixue Captures Value
Mixue creates value for consumers through low prices and accessibility. It creates value for franchisees through brand recognition, standardized supplies and a relatively simplified store model.
The company captures value mainly through the upstream sale of ingredients and equipment. This is the defining characteristic of its business model.
A traditional franchisor may ask, “How much royalty revenue can this store generate?”
Mixue’s model asks a broader question: “How much recurring supply-chain throughput can a healthy store support?”
VIII. Case Study: The 2025 Expansion Paradox
Mixue Group’s 2025 results illustrate both the power and the limits of its supply-chain strategy.
The group grew from 46,479 stores at the end of 2024 to 59,823 at the end of 2025. Revenue rose by 35.2%, and profit increased by 33.1%. The mainland Chinese network expanded substantially, supported by manufacturing capacity, warehouse infrastructure and high franchise demand.
At the same time, the number of stores outside mainland China fell by 428. Mixue reported that it was optimizing store operations in Indonesia and Vietnam while entering new markets, including Kazakhstan and the United States.
The contrast reveals a fundamental principle:
A franchise brand can cross a border much faster than its supply-chain capabilities can.
A logo can be licensed quickly. A lease can be signed. Equipment can be shipped. A store can open.
Building a reliable local network of suppliers, warehouses, food-safety controls, maintenance technicians, trainers, software support and last-mile transportation requires more time.
Mixue’s international contraction in 2025 should not automatically be interpreted as strategic failure. Closing or restructuring weak locations can improve long-term network quality. However, it demonstrates that store-count growth is not a substitute for operational depth.
During 2026, Mixue continued testing new markets. It opened its first Brazilian store in São Paulo in April and has discussed building a regional supply chain capable of supporting further expansion in the Americas. In July 2026, the company opened its first San Francisco Bay Area location in Sunnyvale after entering the United States through Southern California.
The strategic lesson is that Mixue should treat each international region as a supply-chain development project rather than a store-opening campaign.
IX. Sustainability and Responsible Supply-Chain Growth
A. Packaging
Mixue’s scale makes packaging one of its most visible environmental challenges. Disposable cups, lids, straws, spoons and transport cartons may each appear insignificant at the individual transaction level, but the cumulative volume is potentially enormous.
The company reports introducing degradable utensils in some markets, testing alternative cup materials and increasing reuse or recycling within logistics operations.
A stronger environmental program should measure:
- Grams of packaging per beverage sold;
- percentage of recycled content;
- percentage of packaging technically recyclable in the market where it is sold;
- packaging recovery rates;
- and total annual packaging placed into commerce.
Terms such as “degradable” and “environmentally friendly” should be used carefully. Some materials require industrial composting systems that may not exist locally. A material’s theoretical properties do not guarantee that it will be collected or processed correctly.
B. Agricultural Sourcing
Mixue has reported direct-origin procurement, long-term relationships with some agricultural producers and sustainability considerations in supplier assessment. In selected overseas markets, it has also explored localized sourcing to reduce cross-border transportation.
Responsible sourcing should include:
- Labor standards;
- pesticide controls;
- water use;
- soil health;
- biodiversity;
- farmer income stability;
- and climate resilience.
Long-term purchasing agreements can improve supply security while giving growers greater confidence to invest in quality and capacity. However, Mixue should disclose enough information to distinguish broad commitments from independently verified improvements.
C. Energy, Water and Emissions
Factories, warehouses, refrigeration, transportation and stores all consume energy. Ingredient processing and agricultural production can also require substantial water.
Mixue should establish measurable intensity indicators such as:
- Energy per ton of product manufactured;
- water per ton of production;
- emissions per thousand beverages sold;
- warehouse energy per case shipped;
- and transportation emissions per delivery unit.
Absolute emissions may rise as the company expands even if operations become more efficient. Both absolute and intensity figures should therefore be reported.
D. Nutrition and Consumer Responsibility
Sustainability is not limited to carbon and packaging. A responsible beverage company must also consider the nutritional profile of its products.
Mixue’s low prices make sweetened drinks widely accessible. The company should expand:
- Lower-sugar formulations;
- transparent calorie information;
- adjustable sweetness options;
- portion-size clarity;
- and responsible marketing to children.
These measures do not require abandoning indulgent products. They give consumers better information and broaden the product portfolio as health expectations change.
X. Strategic Recommendations
1. Build Regional Supply-Chain Platforms Before Mass International Franchising
Mixue should prioritize regional manufacturing, warehousing, testing and supplier-development hubs in markets with sufficient long-term demand.
Southeast Asia may justify multiple regional nodes because of existing store density. Brazil could eventually support production and distribution for parts of Latin America. North American expansion should remain measured until the company confirms that local pricing, labor, imports and distribution can support durable franchise economics.
2. Establish a Global Supply-Chain Control Tower
A control tower should integrate:
- Procurement status;
- supplier risk;
- factory capacity;
- inventory;
- shipment location;
- warehouse conditions;
- store demand;
- product complaints;
- weather;
- and geopolitical disruptions.
The system should not merely display data. It should identify exceptions requiring action, such as abnormal demand, delayed shipments, temperature excursions or inventory imbalances.
3. Prioritize Franchisee Return on Invested Capital
Mixue should publish or internally enforce territory and store-approval rules based on expected franchise returns rather than supply-chain volume alone.
Key measurements should include:
- Median payback period;
- sales per store;
- store-level operating margin;
- closure rate by opening cohort;
- franchisee renewal;
- and performance before and after nearby stores open.
A healthy supply chain requires healthy endpoints. Stores that cannot earn money will eventually stop ordering supplies.
4. Create a Formal Supply-Chain Resilience Index
Every major ingredient and product should receive a resilience score based on:
- Supplier concentration;
- geographic concentration;
- lead time;
- shelf life;
- substitutability;
- production redundancy;
- logistics dependence;
- and climate exposure.
Management can then direct investment toward the weakest critical categories.
5. Expand Independent Verification
Mixue should commission credible third-party reviews of:
- Food safety;
- supplier labor practices;
- environmental data;
- packaging claims;
- and greenhouse-gas calculations.
Independent verification would strengthen trust as Mixue enters markets where consumers, regulators and journalists may be unfamiliar with the company.
6. Localize Selectively
Complete localization may sacrifice consistency. Complete import dependence may sacrifice cost and resilience.
Mixue should divide supplies into three categories:
- Globally standardized core ingredients that remain centrally produced;
- Regionally manufactured ingredients produced under Mixue-controlled specifications;
- Locally sourced commodities that can be purchased safely and economically within the market.
The correct balance will vary by country and product.
7. Protect the Value Proposition Without Treating Price as Untouchable
Mixue’s affordability is central to its identity, but permanently suppressing prices can become dangerous when input costs rise.
The company should use:
- Menu engineering;
- carefully differentiated portion sizes;
- seasonal sourcing;
- waste reduction;
- process improvement;
- and product-level margin analysis.
A modest, transparent price adjustment may be less damaging than deteriorating ingredient quality, franchise failure or hidden reductions in portion size.
8. Treat International Closures as Operational Data
Stores that close should be analyzed systematically.
Mixue should determine whether each closure resulted primarily from:
- Poor site selection;
- insufficient demand;
- franchisee capability;
- rent;
- labor costs;
- supply delays;
- pricing;
- menu mismatch;
- regulatory barriers;
- or excessive nearby competition.
The objective is not to eliminate every closure. It is to ensure that the same preventable failure is not reproduced across multiple markets.
XI. Summary
Mixue’s growth cannot be explained by inexpensive ice cream and lemonade alone.
The company has built a vertically integrated supply-chain platform combining global procurement, centralized ingredient production, large-scale warehousing, dedicated distribution, digital management and a predominantly franchised retail network.
Its financial structure confirms this interpretation. In 2025, approximately 97.6% of Mixue Group’s revenue came from goods and equipment, while franchise and related service fees represented only 2.4%. The company primarily makes money by supplying the network, not by collecting conventional royalties.
This model creates several competitive advantages:
- Large and predictable procurement demand;
- manufacturing economies of scale;
- standardized ingredients;
- lower store-level complexity;
- rapid expansion using franchisee capital;
- logistical density;
- and recurring supply revenue.
It also creates substantial risks:
- Commodity-price volatility;
- concentrated manufacturing exposure;
- food-safety consequences that can spread across the network;
- franchisee oversight challenges;
- store saturation;
- cyber dependence;
- packaging volume;
- and the difficulty of reproducing the Chinese supply-chain model internationally.
Mixue’s domestic growth demonstrates what can happen when retail expansion and industrial infrastructure reinforce one another. Its overseas adjustments demonstrate what happens when the retail network and the supply chain develop at different speeds.
The company’s next stage will therefore be judged less by how many stores it can open than by how effectively it can construct reliable regional supply systems around them.
Mixue has already proven that a beverage company can reach extraordinary scale by treating supply-chain management as a core product. To become a durable global institution, it must now demonstrate that the same system can remain resilient, responsible and economically fair to franchisees across vastly different markets.
Frequently Asked Questions
What is Mixue’s business model?
Mixue operates a predominantly franchised store network but earns most of its revenue by selling ingredients, packaging, equipment and other supplies to those stores. Franchise and related service fees represented only 2.4% of Mixue Group revenue in 2025.
How does Mixue keep its prices so low?
Mixue combines large-scale procurement, centralized manufacturing, standardized products, high store density, franchise-funded retail expansion and controlled logistics. These mechanisms reduce costs across the system rather than relying solely on lower retail margins.
Is Mixue vertically integrated?
Yes. Mixue controls significant portions of procurement, ingredient research, production, warehousing, logistics and store systems. The company reports that it self-produces 100% of its core ingredients through five production bases.
How many Mixue stores are there?
Mixue Group reported 59,823 stores as of December 31, 2025. This was a group-wide figure that included MIXUE, Lucky Cup and FULU Fresh Beer locations, not only MIXUE-branded stores.
What are the greatest risks to Mixue’s supply chain?
Major risks include raw-material inflation, agricultural disruption, food safety, manufacturing concentration, franchise quality, store saturation, international logistics, cybersecurity and packaging-related environmental pressure.
Why did Mixue’s overseas store count decline in 2025?
Mixue reported that it was optimizing existing operations in Indonesia and Vietnam. The number of stores outside mainland China fell from 4,895 to 4,467, even as the company entered Kazakhstan and the United States.
Is Mixue sustainable?
Mixue reports initiatives involving supplier assessment, origin sourcing, alternative packaging, reusable logistics materials and localized procurement. However, stronger quantified disclosures and independent verification would make it easier to assess the company’s total environmental and social performance.
References and Further Reading
Source and Methodology Note
This analysis draws first from Mixue Group’s official filings with Hong Kong Exchanges and Clearing Limited. Those documents are the principal sources for the company’s reported financial results, store network, franchise structure, manufacturing capacity, warehousing system, procurement model, international operations and sustainability programs.
Because corporate filings describe the business from the company’s perspective, they are supplemented with independent reporting and industry analysis. These outside sources provide additional context concerning Mixue’s international expansion, consumer appeal, franchise economics, supply-chain localization and operating challenges.
Primary Sources and Company Filings
MIXUE Group. Annual Results Announcement for 2025
MIXUE Group. “Annual Results Announcement for the Year Ended December 31, 2025.” Hong Kong Exchanges and Clearing Limited, March 24, 2026.
This is the principal source for the paper’s current financial and operational figures. It reports Mixue Group’s RMB33.56 billion in revenue, RMB5.93 billion in annual profit, revenue from goods and equipment, franchise-service revenue, store counts, franchisee numbers, store openings and closures, geographic distribution, production bases, warehouses and international operations.
It is also the source for the distinction between the group-wide store count and the number of stores operating specifically under the MIXUE brand. The group total includes MIXUE, Lucky Cup and FULU Fresh Beer locations.
MIXUE Group. Global Offering Prospectus
MIXUE Group. “Global Offering Prospectus.” Hong Kong Exchanges and Clearing Limited, February 21, 2025.
The prospectus provides the most detailed official account of Mixue’s business model before its Hong Kong listing. It includes the company’s development history, franchise system, supply-chain architecture, financial structure, manufacturing capabilities, supplier relationships, business risks and international strategy.
The following prospectus chapters were directly consulted:
History, Development and Corporate Structure
MIXUE Group. “History, Development and Corporate Structure.” In MIXUE Group Global Offering Prospectus, February 21, 2025.
This chapter documents Mixue’s development from Zhang Hongchao’s original 1997 shaved-ice shop in Zhengzhou through the introduction of the Mixue name, the RMB1 ice-cream cone, centralized manufacturing, proprietary logistics, Lucky Cup, the Snow King character and the first international MIXUE store in Hanoi.
Financial Information
MIXUE Group. “Financial Information.” In MIXUE Group Global Offering Prospectus, February 21, 2025.
This chapter explains Mixue’s historical revenue model, cost structure and profitability. It provides detailed information about the sale of ingredients, packaging materials and equipment to franchisees, as well as franchise fees, raw-material costs, gross margins, working capital and other financial risks.
MIXUE Group. 2025 Interim Report
MIXUE Group. “2025 Interim Report.” Hong Kong Exchanges and Clearing Limited, September 23, 2025.
The interim report provides additional information concerning Mixue’s digital infrastructure, smart-store systems, manufacturing and logistics investments, overseas operations, franchise revenue and financial performance during the first six months of 2025.
It was particularly relevant to the paper’s analysis of digital ordering, store management, supply-chain coordination, automated equipment and the integration of consumer, inventory, production and franchise information.
MIXUE Group. 2025 Environmental, Social and Governance Report
MIXUE Group. “2025 Environmental, Social and Governance Report.” Hong Kong Exchanges and Clearing Limited, April 23, 2026.
This report is the principal company source for the sections addressing food safety, supplier management, packaging, environmental performance, employee practices and sustainability governance.
It describes Mixue’s company-reported quality-control systems, supplier assessments, store inspections, product-safety procedures, packaging initiatives, logistics-material reuse and environmental management programs. These disclosures represent Mixue’s own reporting and should not be interpreted as independent verification of performance.
Industry and Supply-Chain Analysis
ARC Advisory Group
ARC Advisory Group. “Mixue Ice Cream & Tea’s Global Expansion: How Supply Chain Strategy Is Reshaping Its Overseas Growth.” January 2, 2026.
This industry analysis examines Mixue’s transition from rapid international store growth toward greater emphasis on supply-chain localization, warehouse development, franchise discipline and sustainable unit economics.
It provides useful operational context concerning store concentration, overseas logistics, localized management and the difficulty of maintaining Mixue’s cost advantage when ingredients and equipment must travel long distances from China.
Some detailed claims in this analysis rely on industry reporting rather than audited company disclosures. It should therefore be treated as informed secondary analysis rather than a substitute for official filings.
Sherafy.com
Sherafgan Khan. “Mixue Supply Chain Explained: How China’s $1 Beverage Giant Built Nearly 60,000 Stores.” Sherafy.com, July 21, 2026.
This earlier research article provided the conceptual foundation for the present SFK paper. It explains Mixue as both a consumer beverage chain and an industrial supply platform serving tens of thousands of franchise locations.
The article develops several of the central analytical ideas expanded in this paper, including the supply-chain flywheel, demand aggregation through franchising, the relationship between retail pricing and organizational design, and the importance of distinguishing logistical density from commercial saturation.
SFK Inc.
SFK Inc. “Starbucks Supply Chain Management: Optimizing Global Coffee Distribution Through Risk Mitigation and Sustainable Practices.” July 19, 2024.
This SFK study served as the structural and comparative model for the present Mixue analysis. It examines vertical integration, sourcing, logistics, risk mitigation, value-chain management and sustainability within a large international beverage company.
The comparison is instructive because Starbucks and Mixue use supply-chain capabilities to support different market positions. Starbucks primarily supports a premium consumer and retail experience, while Mixue uses manufacturing scale, franchising and supply throughput to support aggressive cost leadership.
Independent Journalism and Market Reporting
Associated Press
The Associated Press. “Make Room Starbucks and McDonald’s. China’s Mixue and Other Brands Win Fans in Southeast Asia.” March 15, 2025.
This on-the-ground report examines Mixue’s growth in Indonesia, Malaysia, Thailand and Vietnam. It includes consumer perspectives, local price comparisons, franchise activity and analysis of the broader expansion of Chinese food and beverage brands across Southeast Asia.
The report supports the paper’s discussion of Mixue’s international appeal, especially the importance of affordability in markets where its ice cream and beverages may substantially undercut established competitors.
Financial Times: Hong Kong Listing and Business Model
Financial Times. “China’s $1 Bubble Tea Chain Soars 43% in Hong Kong Debut.” March 3, 2025.
This report covers Mixue’s Hong Kong stock-market debut, low-price positioning and rapid expansion in smaller Chinese cities. It also discusses the company’s reliance on sales of ingredients and equipment to franchisees rather than conventional royalty income.
The article provides useful independent context for understanding why Mixue should be viewed partly as an industrial supply platform rather than solely as a beverage retailer. Subscription access may be required.
Financial Times: International Expansion
Financial Times. “Chinese Bubble Tea Chain With More Stores Than McDonald’s Wants to Conquer the World.” May 10, 2026.
This later analysis examines Mixue’s international ambitions, including its expansion into the United States, Brazil and Kazakhstan. It discusses overseas store restructuring, plans for regional production and logistics, prospective franchisee interest and the difficulties of reproducing Mixue’s Chinese supply-chain economics in distant markets.
It is a central source for the paper’s analysis of international localization, regional warehousing, franchise economics and the risks created when retail expansion moves faster than supply-chain development. Subscription access may be required.
Global Times
Chu Daye. “Fresh Investment Wave by Chinese Firms in Brazil With Mixue Opening Its First Store.” Global Times, April 12, 2026.
This report documents the opening of Mixue’s first Brazilian store in São Paulo in April 2026. It also discusses the company’s plans to develop a localized Brazilian supply chain and its agreement to purchase coffee, fruit and other materials from Brazil.
Because the article includes statements from Mixue and commentary reflecting Chinese commercial perspectives, it is best read alongside independent reporting such as the Financial Times coverage.
San Francisco Chronicle
Aidin Vaziri. “World’s Largest Fast-Food Chain Opens First Bay Area Location With Free Ice Cream Cones.” San Francisco Chronicle, July 10, 2026.
This report covers Mixue’s first San Francisco Bay Area location in Sunnyvale, California, following the company’s initial United States entry in Southern California.
It provides current information about Mixue’s American pricing, product range and early geographic expansion. It also describes the company’s vertically integrated sourcing, manufacturing and distribution model as the basis of its low-price strategy.