Coffee Industry in Japan

[emperor]

Ive got to write a 10,000 word business (international marketing) paper:

and im thinking of doing in on the Japanese Coffee Market:

-case study of Starbucks success (and failures)
(a look at their competition including the clones
and the legacy of the traditionally drunk green tea)

-the introduction of "fair-trade" coffee

-distribution methods; vending-machines, conbinis and cafes (..both hot'n'cold)

Id greatly appreciate any input or links on those topics or suggestions on other aspects to focus on.

Domo

[iwantmyrightsnow]

You should think about including Tully's. There has been a lot in the media about the Japanese president recently. Only mid-30's. Went up against the big boys to get the deal as an individual.

[emperor]

You should think about including Tully's. There has been a lot in the media about the Japanese president recently. Only mid-30's. Went up against the big boys to get the deal as an individual.

Googles not giving up any info on that..
http://news.google.co.jp/news?hl=ja&ned=jp&ie=UTF-8&q=tullys+coffee&btnG=%E3%83%8B%E3%83%A5%E3%83%BC%E3%82%B9%E6%A4%9C%E7%B4%A2
but, Ill defo look into that, thanks!

[Ptyx]

I went to a kissaten made exactly like a starbucks. Very defined brand, new twist around an old thing (macha latte and other stuff in the same vein).
I don't know if it's a chain but it really looked like it.
Unfortunately i can't remember the name of the place.
It was on Meiji dori maybe 50 meters away from the omote sando crossing in the direction of shibuya. I'll try to remember the name and eventually get a pamphlet.

edit: I went back there yesterday. It's called Koots Green Tea and here's their website

[Faded]

You may want to include the fact that Japan has traditionally held a lock on approx. 75% of the annual crop of Jamacia Blue Mountain beans (for no more reason then they decided that they liked that one most). This in turn has forced the rest of the world to compete for the remaining crop, hence it is usually priced 2-3 times higher then other brands of Arabica coffe (and not for quality or anything else people may think)

will find a link when I get the chance.

[deltaco]

http://www.pickupguide.com/hbasssw2.htm

[Mulboyne]

You can go any number of ways with your theses so you probably have to narrow it down.

On a basic level, you can talk look at coffee consuption per head. But caffeine drinks also include the ubiquitous "genki" drinks in Japan (pharmacuticals, not beverages) so you could also at the contrasting uses of stimulant drinks.

Starbucks is a coffee shop and if you start with that premise then you are looking more at how branding works in the Japanese market. Why Starbucks vs the incumbent shops etc. And, since Starbucks entered the market via a JV with Sazaby then you have another theme you can pursue - whether a Japanese partner is essential to success here.
Also, you can look at the different roles of coffee shops. Starbucks is non-smoking and so captures one market while losing another to the other chains, Tully's tries to be both.
Coffee shops also compete with fast food chains so you could even spend your whole theses on a study of location strategies for chain stores and the influence of the domestic rental market.
If you just look at coffee shops the you leave out home use. Summer & Winter gift giving seasons have seen a rise in coffee/tea gifts and a fall in beer/ham (amidst a general decline).
I don't know where the data is but it would be interesting to look at coffee availability in schools.
You already mentioned vending machines and, in this respect, you can look at the trends for Pokka (coffee), Ito-en (tea) and Kirin Beverage (both). Also the role of the Coca-Cola bottling companies and their dominance of vending machines (vs Pepsi).
The biggest challenge to vending machines has been the PET bottle and distribution via convenience stores. This suits ice coffee drinks and tea drinks and plays to the strengths of the canned beverage companies who can use both distribution routes.
This also comes back to brands and can take you into the role of advertising in creating and sustaining demand.
On a economic tack, you can look at elasticity of demand and the impact of commodity prices. Starbucks has looked at production bases in Asia but has not found a compelling case so far.

In the end, you have to balance what you are most interested against the data you can find. I would start with a theses you want to prove and set about backing it up. If you find you can't, then that will steer you towards a different conclusion and a different theses.

English Links (Japanese pages just a click away)
Pokka Site
Ito-En Site
Taisho Pharmaceutical Site
Japan: a nation of coffee lovers - 12 Aug 2003
UCC Coffee Site
Key Coffee Site
Unicafe Coffee Site

[iwantmyrightsnow]

[GomiGirl]

Well I for one am not surprised at the initial success of Starbucks, Tullys and the like. In the bad old days, coffee shops like Renoir were the only option. A flashback to the 60's and the coffee tasted as if it had been brewing since then as well.

The JV with Sazaby was a very smart move.

[abs]

Starbucks Japan is well known abroad. A bigger chain than Starbucks is Doutor. Interesting is their pricing which is lower than that of Starbucks. They also own the Excelsior chain which is a copy of Starbucks. For more info refer to http://www.doutor.co.jp/top.htm

The best coffee is made by Segafredo. They have a few stores with excellent Italian coffee. http://www.segafredo.it/eng/corp-e_con_pag.htm

Arjen van Blokland

[omae mona]

Starbucks Japan is well known abroad. A bigger chain than Starbucks is Doutor. Interesting is their pricing which is lower than that of Starbucks.

Are you sure about that? When it comes to a regular cuppa joe (forgetting all the crappy espresso drinks at either chain), Doutor's "M" size is probably priced about the same as a Starbucks "tall" in general, if I remember correctly. But a Doutor "M" coffee has gotta be about half the size. Apologies if my memory has gotten the better of me, but I have the distinct impression that Starbucks was cheaper on a per-unit basis.

On the other hand, at Doutor you get all those nice cigarette fumes thrown in for free.

[Mulboyne]

Food, beverage vendors team up with other businesses
A hybrid Starbucks coffee shop and Tsutaya video store has an eye-catching presence at the Azabu-Juban entrance to the Roppongi Hills multipurpose high-rise complex, which opened in Minato Ward, Tokyo, last year. Elsewhere in Tokyo, another Starbucks-Tsutaya combo has already become well-established as a landmark overlooking the perpetually busy Hachiko crossing near JR Shibuya Station.
Bookshops are only the beginning. Starbucks has also begun brewing its coffee at the headquarters of the Shinsei Bank, as well as at many of its branches, allowing bookworms and bookkeepers to get equally caffeinated.
Tully's, a rival of Starbucks, has a coffee shop in Shibuya that capitalizes on coffee's international appeal by sharing space with a Berlitz foreign-language school...Tully's Coffee Japan also opened a shop at Tokyo University Hospital in Bunkyo Ward this spring.
Doutor Coffee, which has 1,300 shops around the country, has an agreement with Exxon Mobil Inc. to open new self-service coffee shops in gas stations. Customers will be able to pay for gas at the coffee shop counter...Doutor and Exxon, which have 90 shared shops around Japan, have another 60 shops on the drawing board now.

[Mulboyne]

Asahi: In the java war, if there's a nook, there's a coffee shop
...The chains are coming up with new ways to infiltrate Tokyo's business districts, squeezing into office entrances, hospital foyers and elevator lobbies...A new Starbucks outlet in the Cerulean Tower near Shibuya Station is a taste of what's coming. Tucked next to the ground-floor elevator lobby, the take-out only outlet has a floor space of a mere 17 square meters...more...

[emperor]

Thanks for the story - I still have to write that paper - I had just put it on hold, but ill have to get it written soon.

This should fit nicely into 'distribution methods'.
along with 24 hr conbinis, jidouhanbaiki...

[amdg]

You don't want to get mixed up in the the coffee business in Japan. The AJCA (All Japan Coffee Association) will f*ck you over very quickly unless you know exactly what you're doing.

Look at what they did to the Jamaican coffee industry. Go to any coffee retailer and you'll see they sell 'blue mountain' coffee and its the most expensive coffee of them all, by at least a few hundred yen. But are you getting 'real' blue mountain coffee? Doubtful - at best it will be a blend of blue mountain and some other mixed beans. How can they do that, you may ask? Isn't that false advertising? Well, way back in the sixties, the AJCA, like a thief in the night, went and registered the blue mountain trademark and have been the rightful owners of that mark in Japan ever since then, and they use that power to force the Jamaican coffee industry board to lower their prices and reduce their sales.

AJCA even promised to give them back the rights to their trademark in early negotiations in the 80's, but when it came to crunch time, I wrote a letter to them on behalf of the Jamaican coffee board asking them to live up to their early promise. Thier reply - "we're very sorry but we can't do that right now".

Edit - got my acroynms mixed up.

[emperor]

... they sell 'blue mountain' coffee and its the most expensive coffee of them all, by at least a few hundred yen.

'Blue Mountain' is the most expensive blend sold at bewleys and gloria jeans in Dublin.
I think Kopi Luwak is supposed to bethe most expensive generally though (the coffee beans that are picked out of the poo of civets)

[amdg]

I think Kopi Luwak is supposed to bethe most expensive generally though (the coffee beans that are picked out of the poo of civets)

Yes, Kopi Luwak is the most expensive coffee in the world, but you won't find it at most retailers. Blue mountain is the second most expensive, and you can find it all over the place. (or can you?)

Uggh, I was involved in this coffee dispute for so many years that I came out of it knowing more about Jamaica, about coffee bean production and about the CIB than I ever cared to know. Even the Jamaican ambassador to Japan was roped in to the action (a very nice man I might add).

[emperor]

I was involved in this coffee dispute for so many years that I came out of it knowing more about Jamaica, about coffee bean production and about the CIB than I ever cared to know.

Ill be sure to post an outline of my proposal to see what you think.

[emperor]

Anyone know anything about Bewleys operation in Japan?

It seems to have operated in the 90s and then failed + exited...
I know of at least one branch that was in Harajuku?

Does anyone have anymore details?
When and where they were?
Why they failed?

[Somerandomgaijin]

There seems to be a lot of variety these days. Even the local 7-11's have coffee. (unsure about the rest of Japan but it is new around where I live) Although Starbuck's is an okay coffee, they won't let you smoke in the store.
I will choose, Tully's or S.B.C. or even Jitter's.
Although I don't think Jitter's is around anymore. Dotour is good though and reasonably priced. McDonald's coffee is okay, most places will give a refill you ask. But Denny's has to definately be the consistently worst coffee ever. It's cheap and plentiful, so that is the good side.

What about instant? I'm a Blendy's man myself.

As for Bewley's...Sorry chief no news.

[Taro Toporific]

I will choose, Tully's or S.B.C. or even Jitter's. .

Scratch Tully's from my list---They've become way too Japanese by promoting smoking and the ultimate evil, the dread half bagel.


[b]Tully's unloads operations in Japan]
Tully's unloads operations in Japan; seeks U.S. growth
The Seattle Times: Tuesday, August 23, 2005 - 12:00 AM
Seattle-based Tully's has agreed to sell the rights to operate its retail stores in Japan to Foodx Globe for $17.5 million.
Under terms of the deal, Japanese licensee Foodx will receive Tully's trademarks, store designs and other intellectual-property assets for its 270 Japanese stores. The deal is expected to close Aug. 31....
Last year, Tully's had talked with Foodx about "integrating" the two businesses, but Tully's broke off the negotiations. The failed merger talks cost Tully's $550,000 in fees and expenses.
Tully's yesterday reported a first-quarter loss of $885,000, narrowing 11.2 percent from the year-ago quarter....
The company has never posted a net profit.....more...

[Mulboyne]

Tully's has done a Tower Records. Foodx, who have been their Japanese partner (Tully's Japan was renamed Foodx a while back) will now be wholly independent of the US and pay no royalties for use of Tully branding.

[Mulboyne]

Seattle P.I.: Man arrested over alleged e-mail threats on Starbucks Japan over Christmas
TOKYO -- Police in Japan have arrested a man for sending e-mails to Starbucks Coffee Japan Ltd., threatening attacks on its cafes in Tokyo's busy shopping districts of Shibuya and Ginza over the Christmas period, a police spokesman said. Hiroki Okano, 28, was arrested late Saturday on suspicion of forcible obstruction of business, a Tokyo Metropolitan Police spokesman said on condition of anonymity, in line with internal policy. Okano allegedly sent a series of e-mails to several Starbucks coffee shops in Tokyo since late November, threatening bombing, arson and other attacks, police said. Okano admitted sending the e-mails, telling police he did so because shop staff laughed at him behind his back, the spokesman said. Starbucks has 551 outlets in Japan as of March this year, according to the company's Web site. Its Shibuya outlet refused to comment on the case, and officials at Starbucks Japan head office were not available for comment on Sunday.

[Mulboyne]

Reuters: Starbucks Japan to hike prices 1st time in 10 yrs

Starbucks Coffee Japan will raise beverage prices by up to 40 yen (34 U.S. cents) a cup from next month, its first price hike since the specialty coffee shop chain opened a store in the country 10 years ago...A cup of brewed coffee in a small cup will be priced at 280 yen ($2.35), up from 260 yen. The company will keep prices of food, coffee beans and other goods unchanged.

Separately, green tea maker Ito En Ltd. on Tuesday said it would take a 36.4 percent stake in FoodX Globe, which operates Starbucks Japan's smaller rival Tully's coffee shops in Japan, hinting at the possibility of further shake-ups in the industry.

[Mike Oxlong]

Those Charbucks bastards have already raised the price in Okinawa by 50 yen a cup (now 310 for a small). Since early summer. More of the ol' Okinawa is cheaper than the rest of the country myth. Yeah, taxis and a few other inconsequential items. Groceries n' everything else the same or higher...

[Catoneinutica]

Scratch Tully's from my list---They've become way too Japanese by promoting smoking and the ultimate evil, the dread half bagel.


[b]Tully's unloads operations in Japan]
Tully's unloads operations in Japan; seeks U.S. growth
The Seattle Times: Tuesday, August 23, 2005 - 12:00 AM
Seattle-based Tully's has agreed to sell the rights to operate its retail stores in Japan to Foodx Globe for $17.5 million.
Under terms of the deal, Japanese licensee Foodx will receive Tully's trademarks, store designs and other intellectual-property assets for its 270 Japanese stores. The deal is expected to close Aug. 31....
Last year, Tully's had talked with Foodx about "integrating" the two businesses, but Tully's broke off the negotiations. The failed merger talks cost Tully's $550,000 in fees and expenses.
Tully's yesterday reported a first-quarter loss of $885,000, narrowing 11.2 percent from the year-ago quarter....
The company has never posted a net profit.....more...

Tully's sells half-bagels?! Only the baddest of karma can come from that, and it looks like it has. As for the smoking, for me it's always been a tossup between wading through the foetid clouds outside of SBUX, or enduring the occaisional opening of the door sealing of the Tully's smokin' room.

Best-named Seattle chain: Cafe Appassionato. Please come to Japan, guys, do! And keep the butt-suckin' oyaji out.

[Greji]

Tully's sells half-bagels?

Never liked half-bagels. They're too tough to light!

[Catoneinutica]

Never liked half-bagels. They're too tough to light!

Heh. Take heart: Foodx (is there anything more lame than an Engrish J-corporate name? Yeah, I know, my posts)...anyway, Foodx will probably put the nonsmokers in the glass fish tank and give you guys the run of the place.

-catone
-just out of curiosity, has anyone ever taken one of those big Schwartzenegger-sized cigars into a J-establishment - coffee shop, restaurant, izakaya, whatever - lit up, and started blowing clouds of Venusian cigar haze into the personal spaces of the bush-league fag-puffers adjacent? I wonder how they'd react. Gots to try it sometime.

[emperor]

http://www.channel4.com/news

Coffee copyright
Starbucks is accused of blocking Ethiopian farmers.
>>Watch the report

This was on tonights C4 News.
I remember during my research for that paper, reading that less than 1% of the coffee Starbucks sells is actually 'FairTrade' but they maintain that they usually pay above the market average (for the other 99%) which is really fucking low anyway...