Supply chains are the unsung heroes of every industry—arguably as important as market rules, if not more so. And when it comes to China’s most popular drink, lemonade, the role of supply chains becomes even more crucial. Today’s story is of how MiXue, one of China’s most successful beverage brands, conquered the market with its mastery of supply chain innovation.
MiXue dominates the low-price milk tea market in China, earning it the title of ‘Starbucks of low prices.’
Among MiXue’s many popular products, lemonade reigns supreme. Nearly a billion cups of lemonade are sold every year—a staggering feat that relies on an enormous volume of lemons to be grown, harvested, processed, and shipped across the country.
The Perfect Lemon Paradise
Lemons thrive along the 30°N latitude line, and China’s Sichuan Basin offers the ideal growing conditions. Two regions, in particular, stand out as key players in China’s lemon production.
- Anyue County, Sichuan: 480,000 acres of lemon orchards producing 600,000 tons annually.
- Tongnan District, Chongqing: 320,000 acres yielding 350,000 tons per year.
Tongnan District produces an impressive 350,000 tons of lemons each year from 320,000 acres.
Initially, MiXue avoided growing its own lemons, believing it would be simpler to work with external suppliers. But as demand for MiXue’s lemonade surged, things quickly spiraled out of control. Suppliers began raising prices sharply to meet demand, and at one point, the cost of a box of lemons tripled within a single month.
The lack of adequate cold storage further compounded the problem, making it difficult for suppliers to handle the logistics. MiXue found itself in chaos, and despite its booming sales, the brand struggled to turn a profit during its breakout year in the beverage market.
The Birth of “King Snow’s Agriculture”
This turbulent experience pushed MiXue to take matters into its own hands. MiXue launched a subsidiary, King Snow’s Agriculture to establish direct partnerships with lemon farmers and take control of its supply chain. This new approach offered clear benefits to all parties involved:
- Stable Prices: By reducing middlemen, MiXue offers consistent pricing, shielding farmers from market volatility.
- Quality Assurance: MiXue sets strict standards and price incentives for harvesting and processing, rewarding farmers for higher-quality yields.
- Long-Term Partnerships: Contracts guarantee farmers a market for their produce, allowing them to focus solely on cultivation.
Before MiXue’s intervention, lemon prices were wildly unpredictable. Fluctuating yields, inconsistent quality, and a lack of clear information created countless inefficiencies along the supply chain. By streamlining the process and working directly with farmers, MiXue introduced efficiency and greater fairness across all stages of the chain—from growers to processors and, ultimately, to the brand itself.
This innovative approach not only stabilized MiXue’s lemonade supply but also created a sustainable ecosystem where every participant shares in the value of a lemon.
A Sweet Outcome
The mountainous regions of Sichuan have been famous for its high-quality fruit. But the region historically faced significant barriers—isolated geography, poor transportation infrastructure, and fragmented markets left farmers struggling to earn a sustainable income.
When MiXue first began sourcing lemons in 2014, it became a game-changer for the region. MiXue partnered with agricultural suppliers to reduce farmers’ costs and provide technical support. As one MiXue representative put it: “Growing quality lemons is what farmers do best and love to do. Our job is to take care of the rest and ease their worries.”
The impact has been profound. Farmer Lao Wu, who has been growing lemons for over a decade, shared his story: “Our family relied solely on lemon farming, but the lack of transport and stable buyers meant we couldn’t earn much, even with a good harvest. Since MiXue came along, we’ve had a reliable market and expanded our orchards, inspiring others in the community to grow lemons too.”
Today, more than 6,500 farming households supply lemons to MiXue each year, creating a sustainable livelihood for countless families in Anyue.
MiXue’s puppet Snow King and the lemon farm of Anyue
Connection matters. From the sunlit orchards of Sichuan to billions of refreshing cups enjoyed across China, every step of MiXue’s supply chain is meticulously planned. Well, market power can be used for good—when the incentives of a powerful brand align with broader social welfare, everyone wins.