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

The Unavoidable Reality of Asian Coffee — Asian Coffee Bean Prices and the Current State of the Asian Coffee Trade

A cup in the morning to wake the mind, a cup in the afternoon for heartfelt conversation, a cup in the evening as a statement. In this endless ritual of cup after cup, Asian coffee consumption has overtaken Europe and the Americas to become the world's largest — true "black gold," sparking trillion-dollar business opportunities globally. In Taiwan alone, the market is worth sixty to eighty billion NT dollars. Tea steps aside, wine makes way: coffee, in Asian hands, is not only consumed in huge quantities but consumed with sophistication. From cultivation and processing to roasting and brewing, from brand marketing to connoisseur culture, every link in the chain is richly enticing. Can you smell the opportunity coming?

Coffee Flows, Smoothing the Invisible Wrinkles of the Heart

Half the white-collar office workers in the city, half the pink-collar women on the streets, and most students spending their youth there — all clutch a cup of black or tan liquid.

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

Drinking coffee has never been a simple act of consumption. "It is a symbolic personal habit and also a social lubricant," notes the British sociologist Anthony Giddens. Two people who meet for coffee may care more about the conversation than the cup.

As early as 2011, the business news site Business Insider pointed out that coffee had surpassed major commodities like gold and natural gas, with a global value of up to one hundred billion US dollars — three trillion NT dollars — second only to oil.

Coffee Prices Have Been Soaring

In the most recent year, as crude oil kept falling, coffee prices skyrocketed on drought-reduced supply, truly living up to the name "black gold."

The golden age of Asian coffee is quietly unfolding, one cup at a time. Tea-drinking Asia has not only started drinking coffee but growing it, roasting it, building brands around it, and forming a coffee culture around it. We are all guests at this feast — whether holding a three-in-one instant canned coffee or a Paksong specialty coffee from Laos that stands comparison with Jamaica's Blue Mountain.

For Asia, coffee is fully established from production to consumption. Origins, technology, brands, markets, and culture — Asian countries play different roles, making consumers greedy for novelty and entrepreneurs' hearts race.

The International Coffee Organization (ICO) marked its 50th anniversary at its 2013 meeting in London by releasing a consumption report on the fast-developing Asian market. The ICO noted that although Asia's hot-beverage market was long dominated by tea, since 1990 it has been the world's most dynamic region for coffee consumption growth, expanding at an annual rate of 4.9% over the past fifteen years — the most closely watched coffee market on Earth.

Surveying sixteen countries in East and Southeast Asia, the ICO named Japan, Taiwan, and South Korea as the markets with the highest demand for Arabica and specialty coffees, while Indonesia, the Philippines, Thailand, and Malaysia demand mainly Robusta — the instant and canned segment.

China: 10% Annual Growth in Consumption

Asia's largest market, China, is growing coffee consumption at a sustained 10% a year. With per capita consumption still at only 47.6 grams — against Hong Kong's 2.2 kilograms per capita — this nation of 1.3 billion is unquestionably tomorrow's brightest coffee market.

The sixteen countries of East and Southeast Asia hold 31% of the world's population and 29% of its GDP but currently account for only 16% of the global coffee market, leaving enormous room for growth.

The ICO report singled out Taiwan's per capita consumption for its rapid rise. In 2012 it reached 1 kilogram per capita, supported by more than ten thousand coffee enterprises. More tellingly, Taiwan imports the highest proportion of Arabica in East and Southeast Asia — over 60% of imports since 2000 — meaning its market is driven by demand for specialty coffee rather than three-in-one instant or canned Robusta, and is maturing into a genuine coffee culture.

Still, no statistic captures the fragrance of coffee drifting through Asian cities: chain brands' floor-to-ceiling windows claim the street corners while independent cafés hide down the alleys. Tokyo, Seoul, Shanghai, Taipei, Ho Chi Minh City — these cities draw the exclamation marks that belong to Asian coffee.

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

Recently, Japan's hottest consumer story was that "Blue Bottle Coffee chose Tokyo as its first overseas market." In the Tokyo store's first week, queues stretched from the door, with customers waiting up to three hours for a cup.

Where Seattle's global giant Starbucks defines the second wave, San Francisco's Blue Bottle is held up as the emblem of America's third wave of coffee — "the Apple of the coffee world."

Where the first wave was mass-produced, lightly roasted American coffee, and the second wave was the dark-roast boom led by chains like Starbucks, the third wave is consumers demanding to know origins, processing methods, and roast profiles.

Blue Bottle — seen as "pursuing the soul of coffee" — choosing Tokyo as its first stop abroad signals not only Western coffee companies' interest in Asia but their recognition of Japan's mature coffee culture.

Japan has long been the third-largest coffee import region after the European Union and the United States. In its fiercely competitive market, independent shops have lately been ceding ground to chains: the local giant Doutor Coffee runs 1,106 stores, while second-ranked Starbucks has 1,034.

Japan was also Starbucks' first overseas market. Eighteen years after entering, Starbucks' US headquarters — which had held 40% of Starbucks Japan — announced last September that it was buying out all remaining shares, because Starbucks Japan ranked first worldwide in per-store profits.

The Asia-Pacific market has grown for twenty consecutive quarters, and in late March Starbucks opened its 5,000th store in the region. At the annual shareholders meeting in Seattle on March 18, CEO Howard Schultz announced that 2014 revenue and profit had both hit all-time highs, alongside seven strategic priorities for the year ahead, with John Culver, who oversees Asia-Pacific, reporting on store expansion and operational growth.

"Shanghai is the city with the most Starbucks stores in the world, and in India we partner with the Tata Group. In the next five years, Asia-Pacific will expand to 10,000 stores — that's one Starbucks opening somewhere in the world every six hours." When Culver told this to the three thousand shareholders present, the applause and cheers drowned out even the moment Schultz announced the year's profits.

Taiwan: Refined, With Every Coffee Shop Finding Its Own Niche

As the global giant with 22,000 stores sweeps through Asia, Wang Sen — who runs five independent cafés in Wuhan — quietly came to Taipei and opened "Aftermath," a small café with fewer than twenty seats.

Why travel 900 kilometers to open a coffee shop in Taipei? "I love Taiwan's refinement — even walking into a random corner café, you won't find poor quality. Many places roast their own coffee, and every shop has its own identity," Wang Sen observes.

The 47-year-old began running small cafés in Wuhan eight years ago and at one point owned sixteen different specialty coffee shops simultaneously. With a large following on Weibo, he published "Only Want to Open a Small Café" in 2012, selling nearly 300,000 copies. He fell in love with Taipei's coffee culture on his first visit two years ago and has since crossed over thirty-eight times.

"Young Chinese 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, whom he encourages to return to their second- and third-tier hometowns and start small. Classes require signing up half a year in advance. "China's coffee era is just beginning," he says.

South Korea: The Korean Wave Sells Coffee — All the Way to America

In the fourteenth-floor headquarters of Caffebene in Seoul, the 47-year-old CEO Kim Sun-kwon had landed from London just four hours earlier. "We're also researching markets in Paris, Rome, and elsewhere — we hope to enter Europe," he said.

With over 1,500 branches worldwide, the gently smiling Kim is, in truth, impatient. The company runs an unwritten "time-limited decision" rule: every signed document must be resolved within 36 hours, even while he travels abroad twice a month to scout markets.

Just as the Korean Wave has swept Asian markets in recent years, Korean coffee chains are expanding aggressively. Riding celebrity endorsements and Korean-drama filming locations, brands including Caffebene, Hollys Coffee, and A Twosome Place have pushed beyond Korea into Asia — and into America and the Middle East.

After only five years, Caffebene had 800 stores in South Korea and the market looked saturated, so in 2012 Kim decided to take the country's largest coffee chain abroad. His first battlefield was not another Korean Wave-crazed Asian country, but New York.

"The enemy's headquarters is the best school," Kim told CommonWealth Magazine, recalling when America's Time magazine asked how Asian countries could dare sell coffee to Americans. "Since when did coffee become American? They just did the marketing well and built the commerce, and Starbucks was born." His success in Korea gave him confidence — after all, in a world this complex, there is always room for the fearless.

Caffebene has invested $85 million in the American market to date and opened 32 stores without yet turning a profit — "but at least Americans are drinking our Korean coffee now." Kim has never abandoned his ambition to expand.

Koreans, who grow no coffee, take their brands abroad through chain operations; the Vietnamese, who grow coffee expertly, are busy climbing the ranks of exporting nations.

Vietnam: Export Share Up 200-Fold, the World's Second Largest

In twenty years, Vietnam's share of the global coffee export market jumped from 0.1% to 20%, overtaking the traditional powerhouse Colombia and closing in on Brazil. In years when poor weather dents Brazil's harvest, Vietnam even edges ahead to become the world's temporary coffee leader.

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

Unlike the drinking habits of East Asia, Vietnamese coffee blended with condensed milk — bitter and strong mellowed into sweet — is the nation's constant companion for doing business, falling in love, and trading gossip. Shaped by over sixty years of French colonial rule, Ho Chi Minh City, with its 8 million people, holds more than 6,000 coffee shops — a density higher than Taipei's convenience stores. Small wonder Vietnamese per capita consumption rivals Taiwan's, growing at 10% a year.

It's hard to say who converted whom, but coffee lovers insist this small bean did its best to roast out the history of human civilization.

When coffee arrived in Britain, it fired national ambition and the will to conquer the world; the French Revolution took its oath in coffeehouses before storming the Bastille. Introduced to Europe by Venetian merchants, it instantly became a symbol of seventeenth-century urban culture, and by the early twentieth century writers and scholars gathered in coffeehouses, the aroma in the air fueling the spread of ideas and debate over public affairs.

In the twenty-first century, coffee has become an emblem of globalized culture at the peak of its popularity — and, unexpectedly, Asian coffee consumption has overtaken the world to lead all five continents.

This coffee we take for granted has traveled through centuries of history, economics, and society to reach our hands. Like alcohol, it is a socially accepted stimulant — what Giddens called "an extraordinary globalization phenomenon" — and it has flung open the doors of the coffee market's enormous business opportunities.

However this Asian wave is served — with sugar or without — it will be sweet.

Asian Coffee Bean Brand Recommendations

FrontStreet Coffee roasts a range of Asian coffees — Yunnan small-bean coffee, Yemen Mocha, Indonesian Mandheling, and more — all with solid guarantees of brand and quality. Better still, they are exceptionally affordable: a half-pound 227-gram package costs only around 80-90 yuan. At 15 grams of coffee per pour-over cup, one package brews 15 cups, working out to only about 6 yuan per cup of single-origin coffee — remarkable value compared with café prices that often run to dozens of yuan a cup.

FrontStreet Coffee Recommendation

Roast level decides the final cup: the darker the bean, the more bitter and full-bodied; the lighter, the more acidic and delicate. For drinkers chasing balance, medium roast is the sweet spot. FrontStreet's Brazil Fazenda Queen Estate is a classic choice — a Yellow Bourbon from the world's largest coffee-producing country, medium roasted to reveal cream, peanut, chocolate, toasted bread, and sugarcane sweetness, with none of the harshness of acid or bitter extremes, and at home in a pour-over, moka pot, or espresso machine.

Three more medium roasts deserve a place on your shelf. The FrontStreet Strawberry Candy blend pairs a Costa Rica honey-process coffee with washed Panama Geisha, delivering orange-blossom honeyed aroma and rounded sweetness over cold brew, pour-over, or espresso. The 2013 Yunnan Natural Typica carries the authentic "small-bean" character of China's finest origin — nuts, brown sugar, black tea, and dried apricot in a soft, balanced cup for pour-over, cold brew, or drip machines, at excellent value. And the Jamaica Blue Mountain No. 1, grown on famed Typica, is medium roasted to fuse acidity, bitterness, sweetness, and body into one elegant whole — chocolate, roasted nuts, cream, and caramel from the very first sip, a level of integration no other coffee can quite match.