Howard Schultz said he knew Starbucks would be a hit in Japan the day he opened his first store here in 1996.
When Schultz, the company's chairman, arrived in the fashionable Ginza district at 6:15 on that humid August morning, 100 people were lined up for the ribbon-cutting, scheduled for 6:30am.
At the front of the line was a man in his 20s who looked as if he had slept outside the shop the night before. When the doors opened, he rushed in to become customer No. 1 in Japan. Although he otherwise spoke no English, he blurted: "Double short latte!"
Since then, Starbucks, based in Seattle, has become a household name in Japan (it is pronounced Stah-buks-zu) and has redefined the way Japanese drink and think about coffee.
Like Starbucks shops in the US, those of Starbucks Coffee Japan Ltd feature comfortable sofas, American hip-hop and reggae and large servings of a gourmet brew.
These are relatively new concepts in Japan, where cafe patrons had been accustomed to sitting in dimly lit shops and sipping from thimble-sized cups. But the stores were an instant hit.
Unlike most Japanese kisaten, or coffee shops, Starbucks does not allow smoking.
The policy has attracted young women, who do not smoke nearly as much as Japanese men. Given the choice between smoking or chatting up potential girlfriends, many young men have become regulars at Starbucks, too.
Starbucks Coffee Japan has proved so popular that it opened its 300th store this month and is planning to add 180 in the next three years.
It turned its first profit last year, earning ?1.4 billion, or about US$$11.7 million. Its sales of ?29 billion, or US$242 million, were more than double those of the previous year.
Investors have noticed, too. The stock of Starbucks Coffee Japan Ltd made its debut on the NASDAQ Japan exchange on Oct. 10, two years ahead of the original plan. The shares rose 9.4 percent on the first day of trading, to ?70,000 -- an achievement, given the beating that Japanese stocks have taken in recent months. The stock now trades at ?73,000.
Outdid expectations
"Any way you measure it, we've exceeded our wildest expectations," said Schultz, who was in Tokyo for the initial public offering.The success of Starbucks in Tokyo -- sales volume per store in Japan is twice as high as in the US -- is all the more remarkable because this nation of tea drinkers has been mired in recession for most of the past decade. But the Japanese, always eager for the next trend, have taken to gourmet coffee as ravenously as they have embraced McDonald's hamburgers and fine French wine.
Among Japanese in the 18-to-59 age group, more than 80 percent like coffee, according to the All Japan Coffee Association, a trade group of importers and retailers.
Other companies, foreign and domestic, are trying to succeed with coffee here, too. Two other brands from the West Coast of the US, Tully's Coffee and Seattle's Best, run dozens of shops in Tokyo and enjoy strong sales. Local franchise chains like Doutor Coffee (pronounced Doe-tour), which operates more than 1,000 shops across Japan with smaller, less expensive servings, are recording record profits.
The domestic coffee market is now worth US$10 billion in annual sales, and the typical Japanese coffee drinker downs 11 cups a week, about a cup more than six years ago.
RSS