The Korea Herald


Koreans still favor instant coffee fix

By 신현희

Published : June 6, 2011 - 18:56

    • Link copied

Although the country’s thriving coffee market has stoked demand for espresso and drip coffee in recent years, instant coffee remains Korea’s preferred drink, a recent survey showed.

Last year, Koreans consumed 22.8 billion cups of coffee collectively, according to the survey by Nielson Korea and Dongsuh Foods Corp., the top local instant coffee maker. That translates as 452 cups for every Korean over the course of a year, almost seven times the figure for ramen.

Soluble coffee such as Dongsuh’s Maxim and Nestle’s Taster’s Choice made up about 85 percent of the total, topping 19 billion cups. Individually packaged coffee mix, which contains coffee powder, creamer and sugar for a single serving, accounted for nearly 66 percent.

The figures are higher than in Italy, France and the U.S., where instant coffee takes up just 1 percent, 6 percent and 8 percent of the total coffee consumption, respectively.

Coffee beverages ― those available at vending machines or supermarkets like bottled or canned coffee ― came next with 10 percent or 2.2 billion cups, the data showed.

Shares of brewed coffee or espresso-based drinks, however, were merely 5 percent, despite a boom in coffee chain stores and local roasting houses.

Currently, there are more than 20,000 coffee franchises nationwide run by eight large franchise groups ― Starbucks, Coffee Bean, Cafe Pascucci, Caffe Bene, Hollys, Angel-In-Us and Tom N Toms.

Albeit in contrast with other industry data in which the drip coffee segment claimed a double-digit stake, the survey results illustrate Koreans’ strong attachment to instant coffee packets.

Industry officials ascribed such a phenomenon to the convenience and affordability of the products, given expensive prices of espresso drinks at coffee franchises in Korea and limited availability at home or work.

According to the survey, about 40 percent of the total coffee consumption takes place in the office, with 26 percent at home and 22 percent from vending machines.

“Coffee is a very casual beverage for Koreans,” an official with Dongsuh said. “Many people drink it as a habit, like smoking cigarettes.”

A joint venture with U.S. food giant Kraft, Dongsuh has dominated the formidable local instant coffee market for decades, boasting nearly 80 percent share as of last year.

Its business drooped a bit in the early 1990s when Nestle expanded its share to 40 percent with Taster’s Choice. But it hustled to get back on its feet, retaining a 64-percent stake by 1998.

Dongsuh posted more than 1.42 trillion won ($1.32 billion) in sales last year.

In a bid to bite into that monopoly, local food firms are aggressively tapping large discount chains, where around 70 percent of coffee mix is sold.

Lotte Chilsung Beverage unveiled its instant coffee brand named Cantata in July and NamYang Dairy Products did its French Caf in December.

Competition is likely to become fiercer as Starbucks is gearing up to launch its “premium instant coffee” called Via.

In efforts to fortify its lead in the industry, Dongsuh said it plans to introduce coffee capsules next month for commercial use and to expand into overseas markets.

By Shin Hyon-hee (