"2,000 Won Coffee" Stores Are Booming... Compose Coffee Experiments with Tteokbokki for Survival

Following MegaMGC and Gongcha, Compose Joins In
Menu Diversification Amid Rising Costs and Labor Expenses

Low-cost coffee franchise Compose Coffee will introduce a tteokbokki (spicy rice cake) menu starting next month. This move is seen as a response to the increasingly fierce price competition in the budget coffee market, where it has become difficult to generate profit from coffee sales alone. It is also interpreted as a sign that budget coffee franchises are experimenting with menu diversification as a survival strategy.

According to industry sources on the 23rd, preparations for the tteokbokki menu are underway, primarily among Compose Coffee franchise owners. While the composition and sales method of the menu may vary slightly by store, it is widely expected that the main offering will be cup tteokbokki using bunmoja (thick noodles). A Compose Coffee representative confirmed, "It is true that we plan to launch the tteokbokki menu starting in February."

The launch of tteokbokki at Compose Coffee holds significance beyond simply adding a new menu item. It represents a strategic decision by a budget coffee franchise to expand beyond the boundaries of a "coffee shop" and into the snack food sector. This move reflects a growing recognition that it has become difficult to maintain profitability with the existing business structure alone.

In reality, the environment surrounding the low-cost coffee market is rapidly deteriorating. International coffee bean prices have continued to rise for an extended period, and the high exchange rate has further driven up import costs. In addition, prices for key materials such as milk, cups, and syrup are all generally on the rise. On top of this, increases in the minimum wage and higher rent burdens have combined to noticeably reduce perceived profitability for franchise owners.

Intensified competition for new store openings is another burden. Major brands such as MegaMGC Coffee, Compose Coffee, and Paik's Coffee are aggressively increasing the number of stores, pushing local market competition to near saturation. Given the low average transaction value per customer, simply increasing the number of stores is not enough; there is a growing consensus that expanding the range of products sold is necessary to achieve a certain level of sales.

According to Statistics Korea, the number of coffee shops in Korea surpassed 100,000 at the end of 2022, reaching 100,729, a 4.5% (4,292 stores) increase from the previous year (96,437). The number of coffee shops has nearly doubled in six years, from 51,551 in 2016.

In this context, tteokbokki is considered a relatively practical alternative. The cooking process is simple, cost management is feasible, and it can meet both snack and meal demands. Since it is a menu item that customers who come to buy coffee can additionally order, it is also expected to help raise the average transaction value.

MegaMGC Coffee already offered cup tteokbokki for a limited time in 2024, while Gongcha attracted attention by introducing "Pearl Tteokbokki," a tteokbokki dish made with its signature tapioca pearls.

An industry insider commented, "With rising costs for ingredients and labor, it has become difficult for franchise owners to maintain profits from coffee sales alone. As a result, more are trying to raise the minimum daily sales by offering menu items that do not add significant cooking burden."