Sun, Nov 04, 2012 - Page 3 News List

Nation sees strong coffee sales as market heats up

BLACK GOLD:In just 13 years the local trade in coffee has tripled and the humble ‘cup of Joe’ is now 7-Eleven’s top profit-maker, generating yearly revenues of NT$500 million

By Yang Ya-min and Jake Chung  /  Staff reporter, with Staff writer

Coffee consumption nationwide is continuing to grow, figures on the annual import of coffee beans indicate, with statistics showing that Taiwan’s coffee market continues to thrive, observers of the coffee sector have said.

Ministry of Finance import statistics showed raw coffee beans, roasted coffee beans and ground coffee, as well as various products utilizing coffee, amounted to 7,990 tonnes in 1997, and had risen to 25,085 tonnes by 2010 — a three-fold increase within 13 years.

The import value of coffee products rose from US$44.6 million in 1997 to US$199 million in 2010, which marked a new record in Taiwanese coffee import history.

Working on the estimation that an average of 10g of coffee beans are used to make one cup of coffee, the overall figures for coffee consumption across Taiwan in 2004 stood at 1 billion cups of made-on-the-spot coffee, with an average of about 47 cups of ready-made coffee being consumed per head of the population nationwide per year.

The figures have since leaped to 1.7 billion cups of made-on-the-spot coffee in 2010, which means that an average of 78 cups of coffee are being consumed by every person in the nation per year.

According to industry observers monitoring the coffee sector in Taiwan, before 1990, the majority of coffee shops were personally owned and operated. However, after the Japanese firm Doutor established itself in the Taiwanese market — becoming the first coffee chain in Taiwan — others followed suit.

Another Japanese company, Kohikan, as well as local coffee chains Dante and Ikari, have also made a splash in the local market with their “NT$35 cup” proving a popular sales device.

Observers tend to cite 1998 as a watershed in the development of the Taiwanese coffee industry, when the Uni-President company introduced the US coffee chain Starbucks, which paved the way for other medium-to-high-priced coffee chains, including IS Coffee, Barista Coffee and Mr Brown Coffee.

In 2002, the appearance of ecoffee, which offered common-priced coffee, as well as take-outs and deliveries, shook up the coffee industry and at its peak, the firm was boasting sales of 20 million cups of coffee annually.

The emergence of the 85°C chain the following year provided another opportunity for coffee investors by combining affordably priced coffee along with affordably priced cakes and pastries; at its peak it was selling over 40 million cups of coffee a year.

Competition in the low-priced coffee market began to heat up when the convenience store chain 7-Eleven, also owned by Uni-President Co, made its market debut. Within a few years, 7-Eleven’s City Cafe operation became the store’s most profitable line, churning out 100 million cups of coffee per year and generating revenue of NT$500 million (US$17 million). Coffee sales now represent 7-Eleven’s highest yield product per ping (3.3m2).

With Hi-Life, OK and Family Mart convenience stores taking their cue from 7-Eleven and venturing into the coffee market as well, observers of the sector conservatively estimate that at least 200 million cups of coffee are served at the four chains combined.

Observers say there is still room for growth for convenience stores and certain Chinese restaurants to target the coffee-drinking market.

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