85°C Bakery Cafe’s Mainland China Revenue Share Keeps Falling as the U.S. Becomes a Growth Engine

This is an English adaptation of a FoodBud historical article originally published on November 30, 2023.

Taiwan-style foodservice chains have been losing momentum in mainland China. Milk tea chain A Little Tea, for example, has seen its mainland store base shrink rapidly over the past two years, as newer mainland tea chains intensified competition and product strategy fell out of step with market changes.

85°C, one of the representative Taiwan-style bakery and cafe chains, is showing a similar pattern.

Store Footprint

As of the end of September 2023, 85°C had:

• 575 stores in mainland China
• 440 stores in Taiwan
• 71 stores in the United States
• 6 stores in Hong Kong

Mainland China’s Revenue Weight Has Kept Declining

Mainland China once accounted for 72% of 85°C’s total revenue in 2014. Since then, that share has continued to fall.

In the first three quarters of 2023, mainland China’s revenue contribution had dropped to 51%. Over the same period, 85°C reported total revenue of RMB 3.5 billion, down 7.7% year on year.

According to 85°C’s 2022 annual report, full-year 2022 revenue was RMB 4.4 billion, down 1.7% year on year. By product category, revenue was split as follows:

• Bread: 37.6%
• Pastries and desserts: 35.8%
• Beverages: 25.9%

In 2022, mainland China contributed 53% of revenue, while the U.S. market’s share rose from 25% in 2021 to 30%.

U.S. Growth Stands Out

As mainland China weakens, Taiwan-style chains such as 85°C have increasingly emphasized faster growth in the U.S. market.

In the first three quarters of 2023, 85°C’s U.S. revenue increased 23.6% year on year. Mainland China revenue grew only 2.6% year on year over the same period.