Korean coffee craze may be hit by curbs

Mon Aug 20, 2012 10:25pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Hyunjoo Jin

SEOUL (Reuters) - These days, a stroll on the streets of southern Seoul is just as likely to bring the fragrance of fresh-brewed coffee as that of kimchi or more traditional Korean foods.

Nearly one in every two buildings boasts a coffee shop, from Starbucks to local brands such as Caffe Bene and Angel-in-us Coffee. Despite the existence of shops a mere 70 meters (yards) apart, it can still be hard to find a seat on some evenings even though a cup can cost more than a meal.

In short, South Korea, home to the world's third largest number of Starbucks stores after the United States and Japan, has become a major battleground for coffee chains - so much so that government restrictions may lie ahead.

"There are few places where I can meet my friends comfortably. So I go to coffee shops," said Ko Sun-bee, a high school teacher in Seoul.

Though coffee was once a luxury drink, the market in South Korea has grown at a dizzying rate. The number of coffee shops jumped nearly ten-fold to 12,381 during the five years from 2006 to 2011.

South Korean adults consumed an average 338 cups of coffee last year, and coffee imports jumped 44 percent to 130,000 tons over the past four years, said the Korea Customs service.

The value of the market overall has climbed 17 times to 2.48 trillion Korean won ($2.19 billion) during the same time, according to a think tank affiliated with KB Financial Group.

The spark was lit by Starbucks, which entered the market in 1999, analysts said.   Continued...