'Coffee for Transfusion' 2,000 Won on Workdays, 16,000 Won on Weekends [Chosun Price Records]

(28) Cheap or Very Expensive... Polarization of Coffee Prices

Koreans drink an average of more than one cup of coffee per day. A unique aspect is the distinction between so-called 'emergency' coffee consumed for work and leisure coffee enjoyed on weekends. Emergency coffee is usually low-priced, costing around 2,000 won, while leisure coffee often costs over 5,000 won, leading to an expansion of the premium coffee market targeting weekend customers.

'Real Coffee' for Holidays... 16,000-Won Premium Coffee Lands in Korea

The exterior of Basha Coffee Cheongdam flagship store. [Photo by Lotte Department Store]

Recently, Basha Coffee from Morocco, known as the "Herm?s of the coffee world," has arrived in Korea. The price for a 350ml Gold Pot served in-store starts at 16,000 won. Takeout costs up to 11,000 won. Basha Coffee is a premium coffee brand operating stores worldwide, including Morocco, France, Hong Kong, and Dubai.

Intelligentsia, one of the three major American coffee brands, opened its first store in Tongui-dong, Jongno-gu, Seoul, in February. The price of an iced Americano is 5,500 won. Just three months after entering Korea, it opened a second store at the Shinsegae Department Store main branch in Myeongdong, Seoul. Intelligentsia specializes in specialty coffee. Specialty coffee is made by processing high-quality green beans, and the term "specialty" can only be used for coffee that scores 80 points or higher out of 100 according to standards set by the Specialty Coffee Association.

The reason premium coffee brands are knocking on the Korean market's door one after another is largely due to Koreans' exceptional love for coffee. Korea is the third-largest coffee market in the world after China and the United States. According to market research firm Euromonitor, the annual per capita coffee consumption in Korea last year was 405 cups. This is more than twice the global average of 152 cups per capita and over 80 cups more than the United States (318 cups).

Beyond simply drinking coffee, the ability to enjoy a special, leisurely time is cited as a key factor for the popularity of premium coffee. Professor Eunhee Lee of Inha University's Department of Consumer Studies said, "Compared to other countries, Korean consumers have a strong tendency to seek new tastes and spaces. Especially, there is a strong desire for premium consumption, and brands entering Korea are capturing the fact that consumers want to experience premium beyond Starbucks."

Citizens are ordering drinks at a coffee shop located in a building near Gwanghwamun Station in Jongno-gu, Seoul. Photo by Yonhap News

"Work Coffee Costs Around 2,000 Won"... Yellow Coffee Gains Popularity

Despite high inflation, low-priced coffee brands dominate the 'emergency coffee' consumed daily on weekdays. This emergency coffee refers to coffee consumed not for enjoying coffee culture but to recharge energy with caffeine, like a blood transfusion. Representative emergency coffee brands include Mega MGC Coffee (Mega Coffee), Compose Coffee, and Paik's Coffee. Their characteristic is cost-effectiveness, with Americano prices around 2,000 won, relatively inexpensive, and offering large sizes over 500ml.

The number of stores is also rapidly increasing. The total number of franchise stores for the three low-priced coffee brands exceeded 7,000 this year. As of last month, Mega Coffee had 3,083 stores, Compose Coffee 2,612, and Paik's Coffee 1,615, totaling about 7,300 stores. Especially, Mega Coffee's sales last year reached 368.4 billion won with an operating profit of 69.4 billion won, nearly doubling from the previous year's sales of 174.8 billion won and operating profit of 31 billion won.

On the other hand, as demand concentrates on either low-priced or high-priced coffee, demand for mid-priced coffee is decreasing. Ediya Coffee, a representative of the 'mid-low price' segment, is struggling between high- and low-priced franchises. Ediya's operating profit last year was 8.2 billion won, down 18.1% from 10 billion won the previous year, and sales were 275.5 billion won, a 0.8% decrease from 277.8 billion won. Ediya's Americano price is 3,200 won, and other drinks like lattes range from 4,200 to 5,200 won.

Coffee Market Grows for 5 Consecutive Years... Will Climate Change Be a Variable?

The roasted coffee market shows clear growth. Sales at domestic coffee specialty stores have been rising annually, with a five-year average annual growth rate of 12.5%. According to the Korea Agro-Fisheries & Food Trade Corporation (aT) Food Industry Statistics System, sales in 2022 amounted to 15.5012 trillion won. Sales were 13.5164 trillion won in 2021, 11.1292 trillion won in 2020, 11.068 trillion won in 2019, and 9.687 trillion won in 2018.

Meanwhile, although the surge in low-priced franchises has lowered overall coffee prices, inflationary pressure due to climate change is increasing. The drought affecting major coffee bean producing countries has caused coffee bean prices to rise significantly. According to food industry statistics as of the 7th, Arabica beans used in coffee shops cost $5,430 per ton, and Robusta beans mainly used for instant coffee cost $4,481 per ton, rising 2.2% and 1.1% respectively from the previous day.