It’s not easy being surrounded by a lot of choice as a consumer. Especially when convenience stores across Japan are all trying to win you over for one thing—a cup of coffee.
The competition is brewing up in the industry to make the tastiest takeaway coffees, all while keeping the price to a minimum. First started by McDonalds in 2008, the ¥100 coffee was approachable and a more economical alternative to splashing out on gourmet coffee chains such as Starbucks, which gained them a lot of coffee lovers who needed their morning lift.
The concept was taken up soon after by various combinis, introducing both machine-made and over-the-counter coffee selections. The image of bad quality coffee from convenience stores soon faded away, as Lawson, Family Mart and others added a range of drinks to their menus including lattes and frappes to compete against the fast-food giant, as well as various other coffee stores.
Despite all the attempts to become the leading stop for a combini caffeine boost, it was Seven Eleven’s in-store coffee that took the industry by storm late last year, lifting up Japan’s long-stagnant coffee market and getting rival businesses buzzing. The price is not their only selling point, but what set them apart was the quality—their black coffee is a grind-on-the-spot, all-Arabica experience, and all that for a mere ¥100. It may not be a fancy environment, but for a on-the-go drink, the making of the brew is more important than the surroundings.
As people don’t go out a long way to get their coffee, it is a business that attracts both new and repeat customers, who typically also spend money on other things around the store. The rising popularity of combini coffee shot up coffee consumption in the world’s fourth-biggest market up 4% in 2013 to a record of 446,392 tonnes, according to the All Japan Coffee Association.
The rivalry is not only between different combini chains. The canned coffee business has been hit hardest—30% of customers are said to have switched over. No matter how readily available and how little social interaction you need to buy and go, it is hard for the canned coffee to match with a cheaper, more personal and high quality product. Business for coffee giant Starbucks remains mostly unaffected, as their appeal lies in being a place to hang out and buy dessert-like drinks rather than just going for the coffee itself.
Japan’s love for limited edition and seasonal editions may provide new grounds for competition. Seven Eleven is already doing its part by refining its coffee further with a process called husking, to remove the silverskin layer that carries the bitter taste. This can be an attractive selling point to those that are new to the coffee craze or to those that don’t want to have the strong aftertaste when they return to the office. Family Mart has fought back with its own ideas of adding a chocolate latte to their menu, in hope to engage more with female customers with a sweet tooth.