No 30

How Coffee Culture Has Evolved in Asia

October, 2015


How Coffee Culture Has Evolved in Asia

Evolution towards products of high added value and differentiation in markets such as Japan and South Korea, and increasing popularity and sophistication of coffee in countries such as China, Thailand, Indonesia and Malaysia, have opened up great opportunities for Café de Colombia and its partnering brands of the 100% Program.

The Asian market is very attractive for different industries because of its rapid economic growth and population size. In the category of hot drinks, this market has historically been dominated by tea, but coffee consumption has grown exponentially in recent years.

In Asia coffee consumption is expected to grow at a rate higher than 3.5% by 2015, keeping the positive trend of recent years to achieve a volume of over 15.5 million 60-kilo bags.

Some Asian countries such as Japan and South Korea already have a very developed coffee consumption culture. China, because of its large population and exponential growth of coffee consumption, represents a huge potential market. And in other emerging markets such as Indonesia, the Philippines, Thailand and Malaysia, where 20 years ago there was no coffee consumption culture, coffee is becoming popular and creating market niches.

With a long-term vision, and in line with Café de Colombia’s quality, differentiation and added value strategies, Asia-Pacific is a region that has gained relevance also for this origin. The Asian market represents 18% of its sales, a result of a presence of over five decades in Japan and since 2006 in China, and commercial and promotion work in different countries, given the importance of forging long-term relationships with customers and partners.

With an increasingly wider portfolio of products, ranging from green coffee to added-value coffees (including soluble ones) and specialty coffees, including differentiated origins for highly sophisticated products, Café de Colombia has managed to take advantage of different coffee niches in this region to satisfy demanding customers and transfer more benefits to farmers and their families.

This penetration of Café de Colombia in Asia represents a paved path for 100% brands interested in this market.

Japan’s innovative leadership
Japan is not only one of the largest buyers of green coffee in the world, but the most advanced and innovative coffee market in Asia, with drinks and preparations of increased added value. The rapid growth of ready-to-drink (RTD) beverages and coffee supply in convenience stores is just an example.

The third wave of coffee shops, offering fresh, single-origin coffee, is consolidating because of consumers’ knowledge of the product since the first specialized coffee shops opened 30 years ago.
Japan is the main market for direct sales of the Colombian Coffee Growers Federation (FNC), the second destination of Café de Colombia exports (with exports of more than one million 60-kg bags) and one of the main customers of added value coffees for Colombian farmers.

It is a dynamic and innovative market that rewards quality, favoring the development of added value alternatives for Colombian coffee, which records the highest unit prices against other suppliers such as Brazil and Vietnam.

The generation of value in Japan has taken advantage of innovative brands and initiatives for a demanding market as a key strategy. For example, the renowned brand Georgia Emerald Mountain, a leader in the segment of ready-to-drink (RTD) beverages, highlights the reputation of Colombian specialty coffees in the Japanese market through campaigns focused on producers’ work.

Another Café de Colombia’s achievement in Japan is the development of products with beans from the Coffee Cultural Landscape (PCC), a region included by UNESCO in the World Heritage list in 2011. Among products launched with the PCC regional origin, there are roasted coffees by Doutor Coffee (the largest coffee chain in Japan, with more than 1,200 establishments) and the canned drink BOSS Colombia Traditional Blend, by Suntory, the second company by sales in the RTD coffee market.

More recently, taking advantage of the boom in RTD coffee sales in Japanese convenience stores, the fastest-growing segment for beverages (48% last year), Colombia has won participation in this niche through brands such as Jasmine coffee, used in brewed beverages in the Lawson convenience stores, with more than 12,000 outlets in Japan, and presence in China, Indonesia, Thailand and Hawaii.


Korea, another leading market
South Korea is another leading market in Asia-Pacific. Like in Japan, coffee consumption culture has developed around the social component of drinking coffee outside home, as a meeting point, and supply has evolved into products of growing added value and differentiation, both in origin and preparations.

It is also a dynamic, innovative market of growing sophistication, with a population of high purchasing power open to new trends in the industry and avid for differentiated high-quality coffees.
In 2014 specialized coffee shops in South Korea increased their sales by 11% and were the only category in the food services sector that grew that year.

Recently the South Korean Monthly Coffee Magazine, a reference in the industry , devoted space on its monthly issues from March to August to the regional origins of Cauca, Nariño, Huila, Coffee Cultural Landscape, Sierra Nevada and Santander, confirming and contributing to penetration of Colombian differentiated origins.

South Korea is also the first of the two Asian countries where the Juan Valdez® Café chain opened its doors.



China, a huge potential market

China is a traditional tea market, but coffee consumption has exponentially grown in recent years. China’s urban population (about 732 million people) accounts for 54% of the country’s total population. This gives an idea of the market size.

Large international coffee shop chains have entered that market with success: the number of specialized stores such as Starbucks, Costa Coffee and Maan Coffee has increased year after year, confirming the good momentum of the business, which grew 28% in 2014.

Coffee consumers in China are mostly young people in big cities, with access to technology and influenced by the South Korean and Western cultures. With a growing purchasing power, the population has diversified and sophisticated their consumption habits and coffee is now a part of everyday life of most inhabitants of large cities.

Coffee consumption is an aspirational experience, a new lifestyle, but also the result of the offer of better coffees, thanks to a new generation of entrepreneurs who sell high-quality coffee.

Given the growing importance of China as an emerging economy, with a coffee market in full development, Café de Colombia opened an office in 2006 to replicate the success and recognition achieved in Japan for Colombian coffee.



As a result of Café de Colombia’s work in China, in addition to specialty coffees, Buendía freeze-dried coffee and Juan Valdez® roasted and ground coffee are currently marketed in local retailers, as well as in leading electronic channels.

Café de Colombia has sponsored barista championships in the country’s main regions, which contributes to positioning of the brand and encourages the culture of specialty coffees. In addition, this country has proven to be a valuable trading partner for marketers, brands and exporters.

To achieve a more emotional approach with consumers in Japan and China, Café de Colombia has successfully opened different social media channels in Japanese and Mandarin, respectively, to communicate recent and relevant information to the public.

Café de Colombia also does trade with the emerging premium coffee sector in China, organizing courses both in Colombia and in that country and supporting barista championships, as well as foodpairing activities.

Café de Colombia’s work in this region has laid solid foundations for achieving good results in other Asian countries, also opening up new opportunities for the 100% Program brands.

Other relevant countries

In emerging coffee markets in Southeastern Asia such as Indonesia, the Philippines, Thailand and Malaysia, where 20 years ago there was no coffee consumption culture, coffee is becoming popular and creating market niches.

In Malaysia, for example, although the market is dominated by instant coffee, with an important demand for flavored products or products with sugar and cream additions, there is a marked trend towards premiumization of these coffees, due to growing purchasing power and sophistication of consumers, who increasingly seek more options.

Average annual growth of instant coffee sales in Malaysia has ranged between 8% and 10%.

imageEuromonitor forecasts that coffee consumption in Malaysia will be influenced by the rapid expansion of coffee shop chains such as McCafé, Starbucks and Gloria. And it is no coincidence that, after South Korea, Malaysia is the second country in Southeastern Asia where Juan Valdez® Café is present.

Another example of rapid development of the coffee culture is Thailand, where 20 years ago there were only two options for coffee consumption: the traditional so-called “Kafea Boran” preparation, combining ground coffee with brown sugar, sesame and other spices, and instant coffee.

Nowadays the market of specialized coffee shops, which includes traditional and non-traditional preparations of fresh coffee, is about $270 million, with an equal participation of local and international companies. Euromonitor forecasts that consumers in Thailand will see their preferences influenced by constant launches of premium instant coffees with flavors closer to fresh coffee, ensuring growth of instant coffees consumption.

Specialized stores are not an exclusive trend of Malaysia and Thailand in emerging markets. This trend also takes place in the Philippines, Indonesia and in general in regions where sophistication of coffee culture is growing. In these stores, quality of coffee, its origin and sustainability of the production chain play a leading role, and even if Asia has great producers, such as Vietnam or Indonesia, the demand for variety and quality opens up opportunities to Café de Colombia and its allied brands.

You are invited to learn more about our coffee family and our products, visiting the BEAN & BEYOND sections on the top of this page.