On August 14, Beijing’s Haidian District Market Supervision and Administration Bureau reported on food safety violations within dining establishments, implicating four branches of Auntea Jenny. The identified issues include unhygienic kitchen conditions, improper storage of food materials, and non-compliance with food purchase inspection records. As a consequence, Auntea Jenny’s online business operations on food delivery platforms have been suspended under Article 26 of the “Online Catering Service Food Safety Supervision and Management Measures.”
Upon contacting Auntea Jenny’s official customer service about the status of rectification efforts, representatives stated they would forward the concerns to the appropriate departments.
Auntea Jenny, despite its numerous food safety incidents, continues to experience rapid growth through its low-cost franchise model. This expansion, however, has led to increased skepticism and scrutiny from the market.
Consistent Food Safety Lapses
It’s not the first time Auntea Jenny has been flagged for food safety breaches. On July 3, the Haidian District Market Supervision and Administration Bureau highlighted Auntea Jenny for inadequate pest control measures, which resulted in official warnings and mandated improvements. Similarly, on August 10, Auntea Jenny received another warning from the Changping District Market Supervision Bureau due to unsanitary kitchen conditions.
Public sentiment surrounding Auntea Jenny has been notably turbulent. On July 3, a branch was criticized for charging 10 yuan for a cup of hot water. The company later explained this charge was due to inventory reasons. Additionally, on July 26, investigative journalism exposed various infringements in two Beijing branches, including not verifying employee health certificates, using expired ingredients, among other issues.
Qi Huimin, a lawyer at Beijing Dacheng (Shijiazhuang) Law Firm, mentioned that according to China’s Food Safety Law, employees directly handling food must undergo annual health checks and hold valid health certificates. Those violating these requirements face corrective actions and potential fines.
Earlier this year, Auntea Jenny drew attention for an employee’s disparaging remarks towards business partners and for a controversial product packaging design. As of August 21, the Black Cat Complaint platform had recorded 1,811 complaints against Auntea Jenny, mainly revolving around product quality, foreign objects in beverages, poor customer service, and misleading promotions.
Li Rui, Executive Director of Qishijie Management Co., Ltd., commented that with the milk tea market’s expansion, food safety is of paramount importance. Ensuring product quality and consumer safety demands rigorous franchise conditions and standardized training.
Rapid Expansion amid Concerns
Auntea Jenny’s recurring negative press may be attributed, in part, to its swift market expansion.
Public records show that Auntea Jenny was founded in 2013, with its inaugural store in Shanghai’s People’s Square. It initially offered freshly brewed grain tea priced around 15 yuan and later transitioned to “fresh fruit tea.” By the end of 2019, six years after its foundation, Auntea Jenny had crossed the milestone of 1,000 stores. One more year saw this number double, and by the end of 2022, stores exceeded 5,000.
Competing closely in store counts with other mid-tier market players, data indicates Auntea Jenny’s rise is on par with major brands in the sector. Their swift expansion is possibly linked to their low franchise entry requirements.
Auntea Jenny’s founder, Shan Weijun, announced plans this April to inaugurate 3,000 more stores by 2023, aiming to oversee more than 8,000 active stores, with contracts extending beyond 10,000.
IPO Ambitions Amid Challenges
Rumors on July 24 hinted at Auntea Jenny’s intention to go public in Hong Kong by the year’s end, with CITIC Securities and Haitong International supposedly coordinating the effort. Several other tea brands are also reportedly considering IPOs.
In comparison to its competitors, Auntea Jenny’s financing scale and investor visibility don’t stand out significantly. However, the brand did secure considerable investments in 2020 and 2021, with another financing round announced in July 2022.
Jiang Han, Senior Researcher at Pangu Think Tank, observes that while Auntea Jenny’s IPO can accelerate its expansion and enhance brand recognition, it also demands higher management and operational standards.
According to an April survey by Ai Media Consulting, Auntea Jenny’s popularity is somewhat subdued, with only 15.3% of consumers expressing an affinity for the brand. The future tea beverage market competition will encompass not just store counts but also product quality, branding, service, and comprehensive marketing.