42 • South Korea • C&CI May 2013


Korean market still growing at


unprecedented pace S


outh Korea’s per capita coffee consumption is five times greater than consumption in the rest of the


Asia Pacific region, and the total coffee market there was valued at about US$3 billion in 2012. Despite the economic downturn and health concerns, the coffee sector in Korea continues to grow by 30 per cent over last four years. As the younger generation embraces a Western coffee culture and consumers demand premium, high quality coffee, this trend is expected to continue.


In 2012, there were about 12,000 specialty coffee shops, such as Starbucks and Café Bene, in South Korea, a 60 per cent increase since 2008. As the GAIN report explained, most roasted coffee beans imported from the US are handled by US-based coffee franchises such as Starbucks, Coffee Bean and Tea Leaf. In addition to these chains, fast food restaurants, such as McDonald’s and Lotteria also import roasted coffee. In 2011, South Korea imported roughly US$700 million worth of coffee, an approximately 66.5 per cent increase from the previous year. Apart from 2009, when the global economic recession occurred, South Korea’s coffee import had been increasing since 2003 due to booming of the coffee franchises such as Starbucks, Coffee Bean and Tea Leafs.


Key role for


young people “The coffee sector in Korea is especially promising as more people, especially younger generations, are adapting to western culture,” the GAIN report said, noting that Starbucks has served as a key catalyst of popularity for modern specialist coffee shops, with sales expected to surpass US$1.4 billion (1.5 trillion Won) in 2011. Starbucks introduced many Koreans, particularly young people, to the virtues of high quality coffee and espresso drinks, and the American chain remains the leading specialist coffee shop in


Coffee imports in Korea by year and by country Country


World Brazil


Colombia Vietnam


Honduras Peru


United States Others


Country


The U.S. Vietnam Brazil


Columbia Peru


2010 $1,000 MT


20,992 14,740 33,754 12,172 7,333 2,466


2011 $1,000 MT


394,464 114,500 699,306 28,533 69,645 69,026 51,918 40,900 32,109 27,015


146,893 26,204 114,053 17,782 88,529 65,828 54,167 29,505


38,985 11,074 9,599 2,223


103,851 23,043 2009 $1,000 MT 22,026 2,110 2010 $1,000 MT 24,693 2,315 32,109 7,333 200,331 22,666 2011 $1,000 MT 2012 $1,000 MT


581,529 113,556 132,974 23,584 70,671 79,093 42,492 39,090 42,651


12,678 36,269 9,111 8,950 2,742


174,558 20,22 2012 $1,000 MT 26,860 2,074 39,135 2,648


55,974 33,364 51,143 33,639 86,695 38,765 73,828 35,892 41,977 17,343 62,104 19,966 123,238 23,884 91,705 20,130 49,978 13,767 65,661 14,389 108,796 17,337 61,108 12,137 19,124 6,538


54,167 9,599 39,090 8,950 Imports by country (green coffee)


South Korea, with estimated 2010 sales of US$230 million (250 billion Won).


More than just


Starbucks Average annual sales growth has remained in the double digits since the chain’s arrival, and the number of Starbucks coffee shops in the country now exceeds 500.


However, as the report also highlights,


Korea’s coffee boom goes well beyond just a Starbucks-driven fad in a market where consumer trends can reach critical mass and then vanish in a matter of months. “Specialist coffee shops fill an important niche in a country where foodservice outlets remain the primary choice for entertaining, socializing, and study, particularly for young people, in a market where living spaces tend to be quite small,” the report noted. “Free Wi-Fi also


The latest report on coffee in South Korea published by the US Department of Agriculture’s Global Agricultural Information Network (GAIN) shows the market to be in excellent health and growing rapidly


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