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Latest Trends in the Korean Coffee Market Updated: 2017-06-12 12:36:45 KST


The coffee market in Korea is seeing two distinctive trends - a price polarization and diversified menu. We take a look at how the market is constantly reinventing itself to woo consumers. At Seoul's business district, it is easy to spot office workers holding cups of coffee in their hands during lunch hours. Coffee has long been a popular beverage in Korea.

(Korean, )
"Korea's coffee culture took off after the 1988 Seoul Olympics. Then, the country began allowing its people to travel overseas, and many Korean students went overseas to study. These developments helped Korean consumers explore international dishes and develop its coffee culture."

According to estimates by the Statistics Korea, the average Korean drinks 428 cups of coffee per year, about 2.5 cups per day.
The number of cafes nationwide reaches about 88,500, up 63 percent from two years ago.

(Korean, )
"There are a lot of cafes in Korea, and there have been talks about whether these businesses are going well or not.
I think the market has reached saturation, at least from a quantitative point of view."

One of the noticeable trends in the saturated coffee market is a price polarization.
Convenience stores have been driving the low end of the market with cheap coffee.
One convenience chain introduced a cafe section in the store in 2015, where customers can buy a cup of coffee for 88 cents.

(Korean, )
"It's cheap and easily accessible, so I come here often."

For the past two years, the convenience chain sold roughly 30 million cups of brewed coffee.

(Korean, )
"If you buy a cup of coffee in the morning and after lunch from a specialty coffee chain, it can cost you about US$ 8.80 per day. But from convenience stores, it only costs US$ 1.70. Other than those sitting in, there are many take-out customers."

On the opposite end of the spectrum, specialty coffee brands are rolling out premium offerings.
A famous global coffee chain has opened its high-end stores.

(Korean, )
"The regular store also uses good quality beans, but the Reserve store offers beans sourced from selected regions and a range of coffee extractors to meet the diverse needs of customers."

Customers can choose from a line of high-quality beans from selected farms in Africa and Asia which are limited in quantity and select a brewing method.
An Americano can cost more than double the price of regular stores, but sales are growing faster than ordinary stores, thanks to regular customers.

(Korean, )
"I usually use caffeine to wake up, but I drink Reserve coffee to feel better."

(Korean, )
"I come here whenever I feel like drinking special coffee."

In addition to the widening gap in prices, a diversified menu is another major trend in the local coffee market. In particular, nitro coffee as been the hottest buzzword in the business.
A coffee franchise that introduced cold brew coffee for the first time in Korea last year has recently launched nitrogen-infused cold brew to deliver a new cold coffee experience.

(Korean, )
"Last year, our cold brew drew a great response from customers. Customers now have greater knowledge about coffee, and they are more open to new coffee experiences. We thought it was time to introduce nitro coffee."

As making nitro coffee requires a special machine, it was only available at high prices in selected cafes. But a local coffee chain developed an easy way to make nitro brewed coffee. The brand distributed nitro coffee machines developed in-house to its stores across the country and lowered the price of nitro coffee to bring it to a wider audience.

(Korean, )
"We have lowered the price barrier to bring nitro coffee to a wider audience and stay on top of the trend."

Adding nitrogen to espresso gives the drink a smooth, creamy texture and qualities of beer, without the alcohol.

(Korean, )
"The coffee has a foamy texture, much like a stout beer. It really feels like drinking a beer, especially the way it passes through the mouth and slides down the throat."

Korea's coffee market stood at 7.89 billion U.S. dollars last year, nearly a threefold increase from 10 years ago.
The coffee market is well-saturated with fierce competition, but experts say this could be an encouraging sign for the overall market.

(Korean, )
"Customers now have a better understanding about the flavor and aroma of coffee. In addition, the coffee market is working hard to offer great coffee to customers. For these reasons, I think the market will continue to see qualitative growth. "

With coffee being an indispensable drink for many people, we look forward to seeing how the market will respond to the evolving needs of coffee lovers.

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