STiR coffee and tea magazine

60 STiR coffee and tea / Issue 2, 2019 (April / May) E By Josh Doyle ven the largest of waves breaks when it hits shore. The surge of cafés in South Korea has finally reached its peak as local me- dia reports that thousands of Seoul's 17,000 plus coffee houses have shut their doors due to a saturated market and the inevitable erosion that occurs when frequent coffee drinkers start brewing at home. But as coffee producers from ready-to-drink (RTD) to roasters are forced to im- prove quality to stay in business, the shrinking market is a win for consumers. "More and more people are drinking from coffee machines or roasting directly," Baek-jin Kim of CozyVilla Coffee Roasters in Seoul told STiR. His café is one of many that has been forced to diversify their offerings into desserts and other foods in order to combat a wave of premium RTD and instant coffee products, along with innovative home brewing equipment. Local media reported that 8.5% of café franchises closed in 2017, with possibly a larger number of closures for independent cafés. Large domestic chain Café Droptop cut 20% of its workforce last year, while rival franchising giant Coffine Gurunaru in- curred losses of more than $2 million from operations of its 100 plus cafés. Caffébene, the Korean coffee chain that made waves in the US market in 2012 with their Times Square location, saw store numbers at home fall from a high of 912 shops in 2014 to 850 by 2016. The franchise's expansion was further halted in 2018 when they filed for bankruptcy in South Korea. The collapse has been pinned on an over-reliance on fran- chise numbers, while the café chain failed to make offerings that stood out in Korea's competitive cafe market. Coffee imports in South Korea also slowed in 2018, a reversal from 2017 when value swelled to $11 billion, according to the South Korea Customs Service. In 2018 coffee imports contracted for the first time in six years, dragged down by a slowing domestic economy and an over-saturated market. South Korea's Shrinking Coffee Market a Windfall to Consumers A barista edits the daily digital menu inside a Seoul cafe.

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