Why Luckin Coffee, Starbucks’ biggest competitor, wants to buy Blue Bottle 

The coffee wars are about to, forgive us, heat up.

[Photo: Smith Collection/Gado/Getty Images]

The Chinese coffee giant Luckin is reportedly acquiring the third wave coffee mecca Blue Bottle in a deal worth just shy of $400 million. It’s more than another acquisition: Luckin is making its most aggressive move on Starbucks since it opened its first U.S. locations in New York in 2025 in a rivalry that is quickly heating up.

But to understand what’s at play, we need to zoom out for a moment to take a quick scan of the global coffee market.

Inside the coffee wars

With around 40,000 stores and $37 billion in revenue, Starbucks is the biggest coffee company in the world. While it’s had a few stagnant years, its all-star CEO Brian Niccol has been staging a design-led turnaround, in which cozier cafes and a protein-laden menu have siren-called customers back with some early success.

Luckin, a company controlled by the Chinese private equity firm ​​Centurium Capital, is its only sizable challenger—which grew its global footprint by a hyper aggressive 39% in 2025 to reach around 31,000 stores. Luckin is in some ways the antithesis of Niccol’s Starbucks. The stores are smaller footprint, emphasizing digital ordering. They will also gladly operate at a loss to unlock new markets—all while Starbucks has been closing its underperforming stores. (Luckin has reportedly seized this moment to actually buy some old Starbucks locations—undoubtedly hoping to swap someone’s daily Starbucks run for their own brand.)

Neither of these companies is operating in a vacuum, though. A slew of smaller challengers are eating the coffee market. You’ll find 12,000 Dunkin’s globally, and other chains including Tim Hortons, Dutch Bros, Scooter’s, and Blank Street, none of which break the four figures. Each of these brands is finding a most certain appeal with consumers, ranging from pumping out relatively inexpensive giant iced coffees to offering simple drinks with a minimal decor to serving up desserts disguised as coffee straight of a drive-thru window.

But none of them is really good coffee, if we’re being honest. They all lack the third wave coffee vibe where single origin pour overs still rule, where spending over $10 for a cup is far from rare. 

On one hand, perhaps the third wave coffee market matters less than we think these days. Blue Bottle’s 140 stores globally aren’t profitable. Starbucks closed its own high-end “reserve” stores in 2025 admitting a failed strategy to woo people to (even) fancier coffee. We live in the age of iced coffee and matcha anyway (60% of drinks from Starbucks are sold on ice these days). 

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