Posted November 27

Percolating Coffee Culture in South Korea

Coffee has warmed the cockles of the hearts of South Koreans for years, with caffeine consumption having soared in a region where drinking tea is still steeped in tradition. But the growing coffee culture in South Korea is not just about taste preferences, it’s about a cultural transformation.

Researchers at Seoul’s Kangbuk Samsung Hospital claim to have evidence that drinking three to five cups of coffee a day is good for your heart because it decreases the incidence of clogged arteries, long associated with coronary disease.

The potential of coffee to contribute to better health, however, is not the main driver behind the explosion of coffee shops in South Korea.

More likely, to be seen drinking coffee is a status symbol aspired to by mainly young Korean women who relate to Western culture, according to K-Pop artist Psy, the singer behind the international hit song Gangnam Style.

To be seen walking down the street holding a takeaway coffee cup from Starbucks is almost akin to wandering around with a Prada handbag, but much less expensive, some Korean society observers say.

A jolt to F&B retailers

In 2014, South Korea was home to 650 Starbucks cafes. More than 300,000 customers a day bought their brew at a Starbucks outlet – that is almost 110 million coffees a year, or two cups for every South Korean.

The latest figures indicate that Seoul has half a dozen more Starbucks outlets than New York City. The international franchise recently celebrated 15 years of business in the Asian nation, which claims the title of the third biggest coffee consumer per capita in the region, after the Philippines and Singapore.

Starbucks coffees are just the tip of the iceberg, with several other international branded cafes, such as CBTL, already well established in the market and a growing local coffee sector making its presence felt through Caffe Bene and EDIYA coffee shops.

Official government statistics show that in 2013 some 120,000 tons of coffee were imported into South Korea. Instant coffee was included in this data, but this sub-category of coffee imports shrank by 22 per cent.

Online news publication, Quartz, revealed that “imports of roasted and unroasted beans used to make fresh coffee at home and by chains such as Starbucks” have surged. In 2013, new crop imports rose 7 per cent from the previous year and roasted coffee beans grew by almost 14 per cent.

Competition for a piece of the coffee pie

JLL Head of Retail for JLL in South Korea, Nick Kim says “Competition in the coffee sector is really high in South Korea… it is a crowded and mature market now…” But he observes, “As consumers are increasingly seeking high quality and diverse taste of coffee beans, personal owned coffee brands are outstretching their space in the back streets.”

Kim also says that domestic coffee franchises seeking growth are expanding into Mainland China where the sector is still in its infancy.

He explains: “Chinese consumers love Korean coffee brands and are increasingly embracing the Western-style coffee shop experience.”

One of the main international coffee titans in South Korea is Caffe Bene, which ventured into China successfully, recording a 54 per cent increase in sales in 2014 compared to 2013.

Coffee franchise Tous Les Jours, named to capture European cachet, has also done well in China, not least because of its Seoul roots but also because it installs life-size models of South Korean celebrities in its stores. These are a big hit with Korean pop culture fans.

“In Korea, coffee shops are popular because the service is top class and the venues are technology friendly, making them attractive to those who seek hubs for socialising or solitude,” Kim says.

He adds that the coffee culture in South Korea is attractive to young people because they can go to a cafe and get free Wi-Fi, complimentary access to power to recharge their mobile devices and laptops, plus they can watch cable television on big screens without having to pay huge subscription fees to follow their favourite drama programmes.

So while K-culture is being adopted the world over, it seems that the world is also making an impact back home, too.