By Priyanka Rana
Coffee is one of those universal staples that keeps us feeling alert and ready to face the day. But how do Japanese consumers relate to coffee and how has the popular beverage become a core part of their everyday lives? Here, we explore the Japanese coffee market, related innovations, major players, and where there are opportunities to tap into the market.
The Japanese Coffee Market: An Overview
In the US, people consume around 2.5 billion cups of coffee every day, amounting to around 40% of the total population. For further perspective, coffee happens to be the second most traded commodity in the world, occupying the ranking directly beneath the ‘crude oil’ category. The sector itself is estimated to be worth $70 billion USD.
The overall Japanese coffee market was worth $29.9 million USD in 2020, with per capita consumption at 2kg annually. It is estimated that the sector will see a 3.5% year-on-year growth between 2020-2025.
So how exactly does Japan fit into the coffee market as a whole?
If you’ve visited Japan, you may know that the local Starbucks releases culturally relevant limited-time beverages and snacks tailored to Japanese tastes and interests. The big chains like Exclesior Cafe, Doutor and Tully’s are also known for releasing appealing new line-ups on a regular basis.
Coffee filtering has long been central within the Japanese social scene and for many, the method of brewing from bean to cup has become its very own form of artistic expression. Latte art connoisseurs and independent coffee shops are also common, particularly in more unique shopping areas like Tokyo’s Shimokitazawa. As the means of coffee brewing has filtered through Japanese life, it has yielded a variety of roasting strategies, careful bean selection, and brewing technologies, all performed alongside the exquisite attention to detail the Japanese are so widely known for.
First arriving via Dutch and Portuguese vessels in the sixteenth and seventeenth centuries, coffee has had its own remarkable Japanese evolution, both in terms of flavor and capacity. The term for coffee in Japanese, kouhii (コーヒー), stems from the Dutch word koffie, and as a result of this being a loan word, the katakana alphabet is utilised. Similarly to the beverage itself, coffee has taken on its own Japanese structure and also has its own kanji characters (珈琲) moving away from the original Dutch word.
Coffee’s migration to Japan was progressed by its use as a therapeutic drink close to places foreigners had settled. It was also used as an energiser by prostitutes working in seventeenth century Nagasaki. It became popular when Japan opened its borders in the 1860s, as mixed sugar balls – known as kouhiito, were added to hot water, making the coffee more palatable.
Japan’s first coffee house was named Kahiichakan, launched by Tsurukichi Nishimura in 1888. The primary goal was to give back to the younger generation by opening a cafe, creating a space to share knowledge. It would also act as a social venue where ordinary people, students and youth could come together and enjoy themselves.
The two-storey western style house offered good value coffee with access to newspapers, cowhide seats, pool tables, work areas, stationary, showers and even rooms where benefactors could have a nap. Kahiichakan marked the beginning of an ongoing relationship in Japan between smoking tobacco and drinking coffee. Even in the 1930s, Tokyo was home to more than 10,000 coffee houses.
Today, Japan ranks as the fifth biggest coffee consumer. It has been going head-to-head with the nation’s most revered drink—tea. Bistros and chain coffee stores such as Starbucks offer convenient spaces for the cutting edge relentless society where busy mothers can take a break with their babies, salarymen can comfortably work outside the office, and youngsters can go to meet their friends. In any case, the Japanese coffee shop (kissaten) has held its popularity, giving rise to a kind of renaissance for individuals who are eager to pay a premium for quality coffee backed by traditional values.
Major Companies in the Japanese Coffee Scene
The best Japanese coffee shops import beans from coffee-growing nations around the globe such as; Guatemala, Rwanda, Kenya, Indonesia and Thailand. Beans are roasted and ground on site in small batches. Aeropress, French press, and paper trickle (pour over) are some of the common coffee filtering methods in Japan.
The concept of drinking coffee as a chilled beverage is said to have begun in Japan. Furthermore, if there’s one particular place you can buy every type of distinctive coffee from vending machines—including iced coffee, black coffee, or bistro lattes—it’s Japan. Bistro culture developed from table service-style coffee shops to incorporate counter assistance style shops like Doutor during the 1970s. In 1996, the first Starbucks opened in Japan. Starbucks is unquestionably well known among Japanese consumers, yet there are numerous coffee chains to choose from. These days, coffee is cherished in a variety of appealing styles.
Like Starbucks, Tully’s Coffee is an imported franchise, owned by American parent company Barista’s Coffee Company Inc. headquartered in Seattle. It has been present in Japan since 1997 when the first local branch opened in the fashionable Ginza district of Tokyo. Tully’s entered the Japanese market after an employee at Sanwa Bank made a personal request to the company’s Founder, Tom “Tully” O’Keefe, asking him to expand the business into Japan. Now, it’s one of the most successful coffee chains in Japan aside from Starbucks.
As of 2006, Tully’s Coffee Japan has been managed independently through a licencing agreement with major beverage manufacturer Ito-en. Now, there are more than 600 stores across Japan. As is a common promotional tactic, Tully’s often rotates its limited-time offerings to maximise consumer appeal, especially as the seasons change. Their official slogan is ‘Taste the Difference’.
The Japanese coffee chain that has been driving the local bistro culture since the 1970s is Doutor, which now has more than 1,000 stores across Japan. Doutor is a counter service-style bistro, where customers can purchase a cup of coffee at a low cost of 224 JPY. Service is quick, and there are additional takeout options. Another extraordinary thing is that, as a result of having so many stores, whenever you want to take a break, you can practically pop into one no matter where you are.
Despite being cheap, this doesn’t compromise on the quality of coffee customers can enjoy. At Doutor, coffees have an aromatic fragrance and profound flavor, which is generated by conduction broiling. To go with the coffee, people regularly order a delicious German-style hot dog, which has become so famous among Japanese that it’s practically the dish most associated with ‘Doutor’.
Ueshima Coffee House
Ueshima Coffee House is an coffee chain comprised of more than 100 stores across Japan, run by UCC Coffee, a food and drink maker with a considerable authority on coffee. Wooden furnishings give lend a warm feeling to these cafes, where customers can appreciate coffee via counter service in with a relaxing atmosphere. Ueshima Coffee House’s flannel drip coffee has a smooth aroma and full-bodied flavor, and is amazingly smooth to drink.
Customers can relish a variety of coffee styles here, with the top suggestion being Brown Sugar Milk Coffee (420 JPY). This incorporates a fusion of milk and sweet earth-coloured sugar which is dazzlingly delectable, and the iced variant is immensely popular as well. Anyone seeking something extremely Japanese could try any of Ueshima Coffee House’s sesame-enhanced Japanese coffee desserts.
Nagoya is one of the areas of Japan known for its especially remarkable coffee culture. A morning coffee order comes with a variety of other tasty items. For instance, Komeda’s Coffee is a coffee chain first launched in Nagoya, and now has more than 800 stores throughout Japan. In addition to delicious coffee and snacks, Komeda’s Coffee has gained such a following that they also sell collectable miniature versions of their dishes to fans at 400 JPY.
Komeda’s Morning Service (offered until 11:00am) incorporates a complimentary extra: for simply the cost of one beverage, customers also get a slice of thick toast and a choice of either a hard-boiled egg, plate of mixed greens and egg, or ogura-an (sweet bean paste). Other popular items on Komeda’s Coffee menu are the Shiro-Noir, a hot danish pastry finished off with cool soft-serve frozen yogurt (650 – 670 JPY), and their filling array of sandwiches.
Hoshino Coffee is a Japanese coffee chain with all the charm and appeal of an old fashioned Japanese cafe. There are currently more than 200 stores across Japan. Hoshino allows customers to experience hand-poured drip coffees produced using freshly ground beans, roasted by conduction, with three distinctive mixed coffees that contrast in terms of taste and mix.
The Speciality Souffle Pancakes are one of Hoshino Coffee’s most revered dishes. The delicate, cushy surface of this treat makes for a magnificent counterpart to coffee. Although the pancakes take some time to prepare, generally customers wind up returning for more. Beside the souffle pancakes, there is a full arrangement of other types of food and tempting pastries.
Cafe Renoir is a coffee chain with a retro, Taisho Era (1912 – 1926) feel that has in excess of 80 stores concentrated in Tokyo and Kanagawa. The completely happy with the profound, smooth taste of the flannel drip coffee there. The costs are somewhat higher contrasted with other coffee chains, however this chain offers table service with open seating, so Japanese individuals come to Renoir to relax and feel comfortable.
Ready-to-drink Canned Coffee in Japan
Japanese canned coffee brands initially came into existence in the 1960s and were quickly seen as a convenient way to kick-start the day, along with the development and expansion of convenience stores and vending machines.
Soon, canned coffee began to spread out into different parts of the world and became particularly mainstream across Asia. A distinctive aspect about canned coffees in Japan is that vending machines can be found in enormous numbers and everywhere within a city, not necessarily in the vicinity of a shop or station. This even extends into more rural areas. For this reason, canned coffees are equally as ubiquitous as Japan’s vast array of soft drinks, which have a notoriously fast turnaround rate in terms of new product developments.
The first Japanese canned coffee product was launched in 1969, and since then, UCC Ueshima Coffee Co.,Ltd. alongside many other Japanese coffee brands have thought of more effective approaches to improve their product range, regardless of whether that be adding milk and flavourings or introducing ready-to-drink hot versions in vending machines. UCC Coffee is considered to be one of the pioneers of canned coffee, a company which, since 1965, has claimed the Guinness World Record title for ‘Longest-Selling Ready-to-Drink Canned Coffee Brand’.
Thanks to new innovations and promotional tactics, the Japanese canned coffee market has now grown to become an industry worth $, with several Japanese coffee and international coffee brands leading the charge. There are more than 5.5 million vending machines across Japan, and canned coffee remains a staple item.
BOSS Canned Coffee
Since its launch in 1992, Suntory’s BOSS Coffee has been a leading market favourite among Japanese canned coffee brands, revered by a wide range of consumers, skewing primarily towards male demographics. In FY 2018-2019, it ranked as Japan’s third largest beverage brand (across all types of beverages), selling 100 million cases during 2018. BOSS Coffee is a can filled with aromatic, strong milky coffee with a mild sweetness that is enough to keep one awake for the rest of the day.
‘Pride of BOSS’ uses a coffee blend from BAU farm in Brazil. Ready to drink and available in a wide-range of varieties and styles, BOSS Coffee has something for every coffee drinker, whether they’re seeking a coffee that is black and unsweetened, or one that is milder with added milk and sugar.
Suntory’s Craft BOSS ready-to-drink coffees, which were launched in 2017 and sold in PET bottles, also helped to create a new demand for ‘craft’ style coffees that are easily accessible. Now, there are several variants and packaging materials used, each with their own benefits.
Georgia Canned Coffee
Sold by the Coca-Cola Company, Georgia is one of the most well known Japanese canned coffee brands, featuring around 64 varieties to choose from including; original blend, mocha, latte, milk, and many more. Georgia coffee was launched by Coca-Cola Japan in 1975 and so, it has overwhelmed the canned coffee industry in Japan with 980,000 vending machines serving this brand of coffee.
Georgia has also expanded into other markets, for example; Singapore, South Korea, India, Bahrain and the US. Some of the most popular variations are Georgia Summer, Georgia Royal, and Emblem Black. Georgia Coffee is one of Coca-Cola Japan’s fastest-growing brands, and it is scraping the success of other competitive RTD coffees.
Drip Coffee in Japan
In Japan, instant drip coffee is also a popular alternative to cafe, takeaway or ready-to-drink options. The special blend drip coffee from Key Coffee comes individually wrapped and offers a taste that is high in quality. It is a premium blend coffee that offers such a tantalising aroma that you’ll likely want another cup.
The selling point of this type of coffee is that the hypnotic aroma hits the consumer three times during the process of making a perfect cup of coffee; first when the package is opened, secondly when the coffee is being prepared, and finally while drinking it.
The premium quality coffee is made using Colombia, Brazil coffee beans. It is easy to make, and you do not need a machine to make it. The best Japanese drip coffee pack has six blends of coffee, with every one of them giving a unique taste. The individual coffee packs help to revive, relax, and energise consumers during long, tiring days. The assortment pack is the go-to solution when feeling low and tired—a delightful and steaming mug of coffee that stimulates all the senses.
Blendy is a Japanese drip coffee brand which provides easy-to-use coffee. The coffee bean grounds are sourced from Colombia and Brazil. The individual pack is very easy to use. It has flaps that attach perfectly to the sides of coffee mugs, keeping it balanced and in position. The package makes a delicious and aromatic cup of coffee that rejuvenates. These drip packs are made by roasting the coffee beans carefully via the company’s proprietary roasting technology. This special technique of roasting gives the coffee its rich aroma and clear taste that can be enjoyed right till the very last drop.
Thinking of Tapping into the Japanese Coffee Market?
The Japanese coffee market is competitive for sure, but there’s also a strong demand for new and innovative coffee products. With the major players like UCC, Coca-Cola and Suntory dominating the market, penetration could certainly pose a challenge.
That said, the success of American brands like Starbucks and Tully’s points to the ability of non-Japanese players to gain a strong foothold among Japanese consumers. Any foreign brands should consider their strategy carefully and conduct thorough research prior to entering Japan. think about how you can make your products appealing and relevant by aligning with cultural values.
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