The Unavoidable Reality of Asian Coffee - Asian Coffee Bean Prices - The Current State of Asian Coffee Trade

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A cup in the morning to awaken the mind, a cup in the afternoon for heartfelt conversation, a cup in the evening as an attitude. In this continuous ritual of cup after cup, Asian coffee bean consumption has surpassed Europe and America, becoming number one in the world. It is truly "black gold," sparking trillion-dollar business opportunities globally. In Taiwan alone, the market scale reaches sixty to eighty billion NT dollars. Tea steps aside, wine makes way. This fashionable beverage in Asian hands—coffee—is not only consumed in large quantities but also with sophistication. From production and cultivation, roasting and brewing, to brand marketing and expert culture, every aspect is richly enticing. Have you smelled the overwhelming business opportunities coming your way?

Coffee Flows, Smoothing the Invisible Wrinkles of the Heart

Half of the white-collar office workers in the city, half of the pink-collar yuppie women on the streets, and the large majority of students spending their youth—all hold a cup of black or brown liquid in their hands.

This beverage is challenging wine in Europe, challenging cola in America, and challenging tea in Asia.

Drinking coffee has never been a simple matter of consuming a beverage. "It is a symbolic personal habit and also a social lubricant," notes British sociology master Anthony Giddens. Two people who meet for coffee might be more interested in chatting together than actually caring about what they drink.

Business news website "Business Insider" pointed out as early as 2011 that coffee has surpassed important commodities like gold and natural gas, with a global value of up to one hundred billion US dollars, or three trillion NT dollars, second only to oil.

Recent Years Have Seen Coffee Prices Soaring

Last year, as crude oil prices continued to fall, coffee prices skyrocketed due to drought-reduced supply, becoming truly "black gold."

The golden age of Asian coffee is quietly unfolding as we drink cup after cup. The tea-drinking Asia of the past not only started drinking coffee but also began growing coffee, roasting coffee, operating coffee brands, and forming coffee culture. We are all masters of this coffee feast, whether holding a three-in-one instant canned coffee or a Paksong specialty coffee from Laos comparable to Jamaica's Blue Mountain coffee.

For Asia, coffee is fully established from production to consumption. Origin, technology, brands, market, and culture—Asian countries play different roles, making consumers greedily seek freshness and entrepreneurs' hearts race with excitement.

The International Coffee Organization (ICO) held its 50th-anniversary meeting in London in 2013, specifically releasing a consumption report on the rapidly developing Asian market. The ICO pointed out that Asia's hot beverage market was previously dominated by tea, but since 1990, it has become the most dynamic region for coffee consumption growth. Over the past fifteen years, it has grown at an annual rate of 4.9%, making it the world's most watched key coffee market.

The ICO surveyed sixteen countries in East and Southeast Asia, naming Japan, Taiwan, and South Korea as having higher demand for Arabica coffee and specific coffees (specialty coffees). Meanwhile, Indonesia, the Philippines, Thailand, and Malaysia mainly demand Robusta coffee (instant and canned coffees). (See the small dictionary on page 91)

China: 10% Annual Growth in Consumption

Asia's largest market—China—has coffee consumption growing at a continuous annual rate of 10%. However, considering that China's current per capita coffee consumption is only 47.6 grams, compared to Hong Kong's 2.2 kilograms per capita, China with its 1.3 billion population is undoubtedly the most shining star of tomorrow's coffee market.

The sixteen countries of East and Southeast Asia, possessing 31% of the world's population and 29% of GDP, currently account for only 16% of the global coffee market, with great expectations for consumption growth momentum and development potential.

The ICO also specifically noted in its report that Taiwan's per capita coffee consumption has shown significant growth. In 2012, per capita coffee consumption reached 1 kilogram, with over ten thousand coffee enterprises. More importantly, Taiwan's coffee market has the highest proportion of Arabica bean imports in East and Southeast Asia, exceeding 60% of imports since 2000. This means that Taiwan is primarily driven by demand for specialty coffee (rather than three-in-one instant coffee or canned coffee that often uses Robusta), gradually developing a mature coffee culture.

However, these rapidly rising numbers cannot compare to the heartwarming aroma of coffee that fills Asian cities. Chain coffee brands' large floor-to-ceiling windows prominently occupy street corners, while independent cafes quietly hide in alleyways.

Tokyo, Seoul, Shanghai, Taipei, Ho Chi Minh City—these cities draw exclamation marks belonging to Asian coffee.

Japan: Most Mature Coffee Culture, Third-Largest Import Region

Last month, Japan's hottest consumer topic was "Blue Bottle Coffee's first overseas market chose Tokyo." In the first week of the Tokyo store opening, long queues formed at the entrance, with consumers waiting up to three hours to get a cup of coffee.

Compared to the global coffee giant Starbucks from Seattle, USA, Blue Bottle Coffee comes from San Francisco and is regarded as representative of America's third wave of coffee, earning the reputation "the Apple of the coffee world."

Compared to the first wave of mass-produced lightly roasted American coffee and the second wave of dark roasting trends led by coffee chains like Starbucks, the third wave of coffee refers to consumers beginning to pay attention to and demand information about coffee origins, processing techniques, and roasting methods.

Blue Bottle Coffee, seen as "pursuing the soul of coffee," choosing Tokyo as its first overseas stop not only symbolizes European and American coffee companies' interest in the Asian market but also represents the recognition of Japan's mature coffee culture.

Japan has always been the third-largest coffee import region after the European Union and the United States. In the fiercely competitive coffee market, recent years have seen a trend of independent coffee shops declining while chains grow. The largest local coffee chain "Doutor Coffee" has 1,106 stores in Japan, while the second-ranked Starbucks has 1,034 stores.

Japan was also Starbucks' first overseas market. In the eighteenth year since entering Japan, the US headquarters, which previously held 40% of Starbucks Japan shares, announced last September the acquisition of all shares of Starbucks Japan because Starbucks Japan stores ranked first globally in profits.

The Asia-Pacific market has grown for twenty consecutive quarters, with Starbucks opening its 5,000th store in the Asia-Pacific region in late March. When Starbucks held its annual shareholders meeting in Seattle on March 18, CEO Howard Schultz announced on stage that all of Starbucks' 2014 revenue and profit financial numbers set historical highs and proposed seven major strategies for the new year, John Culver, who manages the Asia-Pacific region, was the person responsible for reporting store expansion and operational growth.

"Shanghai is the city with the most Starbucks stores globally, and in India we partner with the most important local Tata Group. In the next five years, the Asia-Pacific region will expand to 10,000 stores, averaging one Starbucks opening globally every six hours," when Culver explained this to the three thousand shareholders present, the applause and cheers even exceeded the moment when Schultz announced this year's profit numbers.

Taiwan: Exquisite, Every Coffee Shop Has Its Own Position

As the coffee giant currently with 22,000 stores globally sweeps through Asia; Wang Sen, who runs five independent cafes in Wuhan, also quietly came to Taipei, opening a small cafe "Aftermath" with less than twenty seats.

Asked why he traveled 900 kilometers to Taipei to open a coffee shop? "I love Taiwan's refinement—even walking casually into a corner café, you won't find poor quality. Many places roast their own coffee, and every coffee shop has its own position," observes Wang Sen.

The 47-year-old Wang Sen began running small cafes in Wuhan eight years ago, at one point simultaneously owning sixteen different specialty coffee shops. He has many fans on Weibo and published "Only Want to Open a Small Café" in 2012, selling nearly 300,000 copies. When he first came to Taipei two years ago, he fell in love with the coffee culture here, visiting Taiwan thirty-eight times within two years.

"Chinese young people also yearn for small happiness—not everyone wants to become Xiaomi or Alibaba," Wang Sen's "Coffee Dream School of Diversity" has trained nearly a thousand students. He encourages students to return to their second and third-tier hometowns, starting with small cafes. Those who want to attend classes must register half a year in advance. "China's coffee era is just beginning," Wang Sen says.

South Korea: Korean Wave Accompanies Your Coffee, Selling into America

In the fourteenth-floor headquarters office of "Caffebene" in Seoul, 47-year-old CEO Kim Sun-kwon had just returned from London four hours earlier. "Recently also conducting market research in Paris, Rome and other places, hoping to enter the European market," he said. (See page 92)

With over 1,500 branches globally, the gentle-smiling Kim Sun-kwon is actually impatient. The company has an unwritten "time-limited decision" rule—all signed documents must be resolved within 36 hours, even when he travels abroad twice a month to inspect overseas markets.

Just like the Korean wave that has fervently swept through Asian markets in recent years, South Korean coffee chain brands are also aggressively expanding. Relying on celebrity endorsements and integration with Korean drama filming locations, including Caffebene, Hollys Coffee, A Twosome Place and others, they have moved beyond Korea, opening branches in Asia, and even America and the Middle East.

And when, after only five years of establishment, Caffebene had 800 stores in South Korea and the market showed saturation, in 2012, Kim Sun-kwon decided to take South Korea's largest coffee chain brand beyond its homeland. The first chosen battlefield was not other Asian countries already crazy about the Korean wave, but New York, USA.

"The enemy's headquarters is the best school," Kim Sun-kwon told "CommonWealth Magazine," still remembering when America's "Time" magazine asked how Asian countries could come to America to sell coffee. "When did coffee become American? They just do marketing well and have developed commerce, which gave birth to Starbucks," his success in Korea gave him confidence—after all, the world is too complex,正好可以让人无畏地尝试挑战.

Caffebene has invested $85 million in the American market to date, opening 32 stores without yet turning a profit, "but at least we've let Americans drink our Korean coffee too," Kim Sun-kwon has never given up his ambition for expansion.

Koreans, who don't grow coffee, rely on chain operations to bring their brands abroad; while Vietnamese, who specialize in growing coffee, are busy climbing to the back seat of coffee-exporting countries.

Vietnam: Export Market Share Soars 200-Fold, World's Second Largest

In the past twenty years, Vietnam's share of the global coffee export market jumped from 0.1% to 20%, not only surpassing the traditional coffee powerhouse Colombia but even closely trailing Brazil. In years when Brazil suffered poor harvests due to climate, Vietnam could even surpass Brazil to temporarily become the coffee leader. (See page 98)

The growth engine of Vietnam's coffee industry comes 99% from small farmers with planting areas smaller than five hectares. Like black gold springing from the earth, coffee has also become the key to changing Vietnam's economy and lifting it out of poverty.

Different from the coffee-drinking habits of East Asian countries, Vietnamese coffee, blended with condensed milk to融合苦味而强劲, is Vietnamese people's best companion for discussing business, love, and gossip. Influenced by over sixty years of French colonial rule, Ho Chi Minh City, with its 8 million population, has over 6,000 coffee shops—with a density higher than Taipei's convenience stores. No wonder Vietnam's per capita coffee consumption is no less than Taiwan's, growing at 10% annually.

In fact, it's hard to say who agreed with whom, but coffee lovers firmly believe that this small bean once tried its best to roast out the history of human civilization.

When coffee appeared in Britain, it sparked national competition and the will to conquer the world; the French Revolution, before storming the Bastille, took its oath in coffeehouses.

And when coffee was introduced to Europe by Venetian merchants, it immediately became a symbol of 17th-century urban culture. In the early 20th century, writers and scholars gathered in coffeehouses, the aroma in the air accompanying coffee as it became a fashionable beverage for knowledge dissemination and debating public issues.

In the 21st century, coffee has become a representative of globalized culture, reaching its peak of popularity. Unexpectedly, Asian coffee consumption surpassed the world, becoming the champion of the five continents.

This coffee that people take for granted has gone through a series of historical, economic, and social developments to reach everyone's hands. Similar to alcohol, it is a socially accepted stimulant. This phenomenon, described by Giddens as "an extraordinary globalization phenomenon," has undoubtedly opened the huge business opportunities of the coffee market.

And this wave of Asian coffee, whether with sugar or without, will be sweet.

Asian Coffee Bean Brand Recommendations

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