Mon, Jun 03, 2024 page3

• FEATURE: Coffee shops struggle, while market grows

  COSTS INCREASING: Opening a small coffee shop requires at least NT$2.5m, while a bigger one would need NT$5m, a chain executive said

  • By Yang Ya-min / Staff reporter
  • • 
    • 
    • 

  After nearly 30 years of weeding out the weak, Taiwan’s coffee market remains robust, importing more than 50,000 tonnes of coffee annually two years in a row — about five times the amount imported 25 years ago.

  When Starbucks, the leading company in the coffee industry globally, was first introduced to Taiwan in 1998, the nation’s annual coffee imports — including raw coffee beans, roasted coffee, coffee and coffee products — totaled about 8,766 tonnes, import and export data showed.

  In 2020, when the COVID-19 pandemic began, Taiwan’s annual coffee imports were more than 50,000 tonnes.

  

  A barista hands a cup of a drink to a customer at a Simple Kaffa store in Taiwan High Speed Rail’s Taoyuan Station in an undated photograph.

  Photo courtesy of Taiwan High Speed Rail

  However, imports were affected by an indoor dining ban imposed in 2021 and dropped to below 50,000 tonnes that year, but increased to more than 50,000 tonnes again in 2022.

  The value of coffee imports increased from about US$44.33 million in 1998 to about US$347 million last year, the data showed.

  As about 12g of coffee powder is used to brew a cup of coffee, people in Taiwan drank about 730 million cups of coffee in 1998, which translates to about 32 cups per person per year. That number grew to 4.24 billion cups of coffee last year, or about 184 cups per person per year.

  Globally, each person drinks an average of 126 cups of coffee per year, but the average number of cups a person in Taiwan drinks is 58 cups more than that, International Coffee Organization statistics showed.

  Compared with countries that have a “coffee addiction” — meaning each person drinks more than 400 cups of coffee per year on average — such as Japan, South Korea, the US and some EU countries, Taiwan’s coffee market still has room to grow.

  The growing number of coffee shops in Taiwan in the past decade also gives a clue as to how much Taiwanese like to open coffee shops.

  The number of beverage shops in Taiwan has grown significantly in the past decade, but coffee shops grew at a much faster rate than others, increasing from 1,592 shops in 2011 to 4,165 shops in 2022 — a growth rate of 1.6, Ministry of Finance business registration data showed.

  Taipei has the highest density of coffee shops in the nation, with an average of 3.4 coffee shops per square kilometer, followed by Tainan with an average of two coffee shops per square kilometer and Taichung with 1.7.

  In 2009, the main coffee chains in Taiwan were 85°C Bakery Cafe, with 327 shops, Starbucks with 223 shops, E-Coffee with 158, Dante Coffee with 127, Ikari Coffee with 64, Mr Brown Coffee with 34, Is Coffee with 32, Barista Coffee with 32, Zhen Quo Cafe with 30 shops, and Crown and Fancy Coffeehouse with 18 shops, Taiwan Chain Stores and Franchise Association data showed.

  By the end of last year, there were 564 Starbucks branches, followed by 394 85°C Bakery Cafe branches and 154 Cama Cafe branches.

  As for franchises, there were only 42 E-Coffee shops, 16 Barista Coffee shops, and fewer than 20 shops each for Ikari Coffee, Dante Coffee and Mr Brown Coffee remaining, while all Is Coffee, Zhen Quo Cafe and Crown and Fancy Coffeehouse stores were closed as of the end of last year.

  The first local coffee chain in Taiwan — Dante Coffee — was sold to dumpling chain Bafang Yunji International Co in 2020, and there were 67 branches at the time, but hit by the pandemic, the coffee chain lost about NT$43 million (US$1.33 million) each year, so many shops closed down and there are only 19 left.

  Dante Coffee plans to introduce a new business model later this year, Bafang Yunji said.

  Ho Ping-lin (何炳霖), chairman of Cama Cafe, said the entry threshold into the coffee business is relatively low, as fast-food chains, bakeries and tea shops also sell coffee, and coffee can even be bought at gas stations, so there is always intense competition.

  The cost of staff, remodeling and coffee beans has been increasing every year, so opening a small shop requires at least NT$2.5 million, while a bigger shop would need NT$5 million, he said.

  “Selling coffee is not very profitable,” Ho said.

  Smaller coffee shops or those without distinctive features might easily be eliminated by the competition, he added.
• Most Popular

  • 1

    Bukele proposes prisoner swap with Maduro

  • 2

    HK, Macau residency rules tightened

  • 3

    Wild’s top line too much for Vegas Golden Knights

  • 4

    China turns on the charm for Taiwan businesses: study

  • 5

    Taipei would welcome return of Honduras as ally if it seeks to recognize Taiwan