Liq­uid ‘black-gold’ con­tin­ues to con­quer the hearts — and tongues — of con­sumers in Asia

The China Post - - BUSINESS -

As the U.S. cof­fee gi­ant con­tin­ues to ex­pand its pres­ence in Asia, Wang Xin, who runs five in­de­pen­dent cof­fee shops in the Chi­nese city of Wuhan, is also look­ing to ex­pand over­seas. He has opened a small lit­er­ary cof­fee shop with fewer than 20 seats called Re­mem­ber Cafe in the heart of Taipei, near Na­tional Tai­wan Uni­ver­sity.

Why would some­one go through the trou­ble to open a tiny cof­fee shop 900 kilo­me­ters from his orig­i­nal busi­ness? “I like Tai­wan’s so­phis­ti­ca­tion,” ob­serves Wang. “You can walk into any cor­ner cof­fee shop, and the qual­ity will be equally fine. Many roast their own cof­fee, and each cafe stands for some­thing.”

Eight years ago, Wang, who is now 47, be­gan to op­er­ate small cof­fee shops in Wuhan. At one point he ran 16 dis­tinctly dif­fer­ent cafes. In 2012, Wang, who has a huge fol­low­ing on the Chi­nese mi­croblog­ging web­site Weibo, pub­lished his book “Just Think­ing about Open­ing a Small Cof­fee Shop,” which sold nearly 300,000 copies. Wang vis­ited Taipei for the first time two years ago and im­me­di­ately fell in love with the lo­cal cof­fee cul­ture. Over the two fol­low­ing years, he trav­eled to Tai­wan 38 times.

“Chi­nese youth also yearn for the ‘lit­tle hap­pi­ness.’ It’s not every­body who wants to be­come Xiaomi or Alibaba,” Wang points out. In his CenCi Cof­fee Dream School in Wuhan, which has been cer­ti­fied as a train­ing lab­o­ra­tory by the Spe­cialty Cof­fee As­so­ci­a­tion of Amer­ica, Wang has al­ready trained nearly 1,000 par­tic­i­pants. He en­cour­ages his stu­dents to re­turn to their sec­ond-tier and thirdtier home cities to open small cof­fee shops there. De­mand for the cour­ses is so strong that peo­ple need to reg­is­ter half a year in ad­vance to se­cure a slot. “China’s cof­fee era is only just be­gin­ning,” Wang says.

S. Korea Pop Cul­ture Cracks

Open US Mar­ket

At the head­quar­ters of Seoul­based cof­fee­house chain Caf­febene, 47- year- old com­pany founder Sun-Kwon Kim meets our re­porter just four hours af­ter fly­ing in from Lon­don. “Re­cently we have been do­ing mar­ket re­search in Paris and Rome, since we hope to en­ter the Euro­pean mar­ket,” Kim re­marks.

Just as Korean pop mu­sic, TV soaps and movies have swept the Asian mar­ket in re­cent years, branded South Korean cof­fee shop chains are gear­ing up for global ex­pan­sion. Caf­febene, spe­cialty cof­fee chain Hollys Cof­fee and Euro­peanstyle dessert cafe A Two­some Place all rely on the glitz and glit­ter of South Korean mu­sic and movie stars and their celebrity endorsements to launch their brands abroad, not just in Asia but also in the United States and the Mid­dle East.

Kim de­cided to tackle over­seas mar­kets in 2012 af­ter ex­pand­ing his com­pany to some 800 out­lets in just four years, mak­ing it the largest cof­fee­house chain in terms of num­ber of stores. In­stead of go­ing to other Asian coun­tries, where South Korean pop cul­ture al­ready has a huge fol­low­ing, for his first over­seas ex­pan­sion, Kim picked New York, open­ing a flag­ship store in Times Square.

“Our enemies are our best teach­ers,” Kim says. He still re­mem­bers that, back when Caf­febene en­tered the U.S. mar­ket, Time Mag­a­zine asked why Asian coun­tries would want to sell cof­fee in Amer­ica.

“Since when did cof­fee be­come an Amer­i­can thing? Star­bucks was only born be­cause they are very good at mar­ket­ing, and their com­merce is de­vel­oped,” Kim says. His chain’s suc­cess in Korea has bol­stered Kim’s con­fi­dence. It is pre­cisely be­cause to­day’s world is “too com­plex” that peo­ple are en­cour­aged to fear­lessly take on new chal­lenges, he says.

To date, Caf­febene has in­vested US$8.5 mil­lion in 32 out­lets in the U.S. mar­ket, but the U.S. op­er­a­tions are not yet prof­itable. “How­ever, at least the Amer­i­cans can al­ready drink our South Korean cof­fee,” notes Kim, un­de­terred by the cur­rent lack of com­mer­cial suc­cess. He is still determined to take his cof­fee­house brand to other coun­tries.

South Korea is not a cof­fee­grow­ing na­tion. As a re­sult, South Korean en­trepreneurs need to rely on chain stores to take their brands in­ter­na­tional. In con­trast, tra­di­tional cof­fee grower Viet­nam has been mak­ing great ef­forts to join the ranks of cof­fee-ex­port­ing na­tions.

Viet­nam: Sec­ond-Largest

Ex­porter

Over the past two decades, Viet­nam’s share of the global cof­fee ex­port mar­ket has grown from a tiny 0.1 per­cent to 20 per­cent. Mean­while, the Southeast Asian coun­try has over­taken tra­di­tional cof­fee-ex­port­ing gi­ant Columbia and now ranks sec­ond world­wide, just be­hind Brazil. In years when Brazil ex­pe­ri­enced drought-re­lated crop fail­ures, Viet­nam tem­po­rar­ily even out­stripped Brazil to be­come the world’s largest cof­fee ex­porter.

The dy­namic growth of Viet­namese cof­fee pro­duc­tion comes al­most en­tirely from small farms with less than five hectares of cof­fee plan­ta­tions. Like the other ‘black gold’ that gushes out of the ground -- crude oil, cof­fee has be­come a cru­cial crop for Viet­nam in de­vel­op­ing the lo­cal econ­omy and lift­ing its peo­ple out of poverty.

Viet­nam’s cof­fee cul­ture dif- fers from that in East Asia. The Viet­namese like their cof­fee strong and sweet­ened with con­densed milk. Cof­fee drink­ing is an in­dis­pens­able part of talk­ing busi­ness, dat­ing or ca­sual chat­ting. With the le­gacy of more than 60 years of French colo­nial rule, Ho Chi Minh City, with its pop­u­la­tion of eight mil­lion peo­ple, boasts more than 6,000 cafes. This con­sti­tutes an even higher den­sity than that of con­ve­nience stores in Taipei. As one would ex­pect, per capita cof­fee con­sump­tion here is not less than in Taipei, with a growth rate of over 10 per­cent per year.

Cof­fee afi­ciona­dos in­sist that the small roasted beans de­serve to be cred­ited for cre­at­ing West­ern civ­i­liza­tion: When Vene­tian traders in­tro­duced cof­fee to Europe in the 17th cen­tury, cof­fee cul­ture soon be­came a fo­cal point of ur­ban life. At the be­gin­ning of the 20th cen­tury, in­tel­lec­tu­als and schol­ars gath­ered in cof­fee­houses to dis­cuss public is­sues, ex­chang­ing ideas and opin­ions as the aroma of cof­fee filled the air.

Cof­fee drink­ing con­quered the planet in the 21st cen­tury, evolv- ing into a global cul­ture even in tra­di­tional tea-con­sum­ing re­gions like Asia. Who would have thought that the rate of cof­fee con­sump­tion in Asia would be­come higher than the world av­er­age, or that Asia would be­come the lead­ing cof­feedrink­ing con­ti­nent?

Bri­tish so­ci­ol­o­gist An­thony Gid­dens, whose dis­cus­sion of the so­ci­o­log­i­cal di­men­sions of drink­ing a cup of cof­fee has be­come quite fa­mous, has said that the cof­fee in our cups has reached us through a se­ries of his­tor­i­cal, eco­nomic and so­cial de­vel­op­ments. Like al­co­hol, cof­fee gen­er­ally re­mains a so­cially ac­cepted stim­u­lant. Cof­fee drink­ing, which Gid­dens de­scribes as “a global phe­nom­e­non par ex­cel­lence,” has cre­ated a world­wide mar­ket with huge busi­ness op­por­tu­ni­ties.

The cof­fee craze sweep­ing across Asia prom­ises sweet deals, whether or not you add sugar to your cup of black gold. Trans­lated from the Chi­nese by Su­sanne Ganz. Ad­di­tional read­ing se­lec­tions can be found at http:// english.cw.com.tw

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