Starbucks rocks the Japanese coffee market
A coffee war is brewing in Japan as the successful importation of Starbucks has forced local companies to step up service.
Coffee companies are launching their own rival stores and existing chains are moving into the premium end of the market in an attempt to stem the flood of Starbucks' franchises across the country.
Starbucks' familiar formula arrived in Japan in 1996 and it now has 131 stores and was rated the nation's most preferred restaurant chain this year by Nikkei Restaurants, a leading food industry magazine.
The Starbucks fast-food formula of stores with a guaranteed atmosphere and menu has swept aside many of the "mom and pop" traditional cafes in Europe and the US but Japan has proved very different. Starbucks arrived to find the chain concept already up and running very well for Doutor, a budget chain of coffee outlets.
"Starbucks is in its early years of growth in Japan which offers huge opportunities to expand."
Starbucks decided to take on the young and trendy and has successfully carved a place for itself at the upper end of the market.
"The fact that Japanese people had the history of drinking coffee, and are used to the style of the self-service, helped us to smoothly launch into the market," Ichiro Yoshimoto, executive vice president Starbucks Coffee Japan, told just-drinks.com
"Starbucks is still in its early years of growth in Japan which is an exciting market that offers huge opportunities to expand.
"There are still many local mama and papa coffee shops in Japan. Customers seem to be enjoying the side variety of places to drink coffee, and Starbucks has been perceived extremely well by Japanese customers since we opened our first stores in 1996."
According to Yoshimoto it is the emphasis on well-trained staff that has enabled Starbucks to become so popular so quickly.
"Starbucks is not only in the coffee business but the people business, hiring the people who share our value is the most important issue. So Human Resources is the challenge for Starbucks Coffee in Japan."
But Starbuck's rivals in Japan are not about to lie down and die without offering their own challenges. Doutor was there first and is striking back with the launch of its Excelsior Café stores - an obvious attempt to take its traditional budget product upmarket and compete with Starbucks.
It ran into trouble immediately when an injunction was lodged against Doutor for copying the Starbucks logo with Excelsior. But the real battle between the two is for location with Doutor moving its headquarters to the fashionable Tokyo district of Shibuya - a prime Starbucks site.
And while Doutor and Starbucks slug it out for the young, trendy, predominantly female customers who are willing to pay high prices for premium coffees another company is muscling in.
UCC Ueshima Coffee was founded in 1933 and has been providing coffee beans to shops and customers since without ever opening its own stores.
But that changed in March with the first UCC store, called Craighton's, located in the busy Tokyo district of Roppongi.
Another Craighton's has opened in Shibuya and UCC plans to compete head on with the other coffee chains.
"With UCC and Doutor challenging Starbucks the war for control of Japan's coffee drinkers has only started to brew."
"Now is the time to launch a direct customer promotion and let them know that Starbucks coffee isn't everything," general manager Yuzuru Sugimoto told Nikkei Weekly.
"With a wider selection of coffees and specialists to give advice, we can propose ways to enjoy coffee for each individual something Starbucks can never do."
What UCC is proposing is to have a specialist listen to a customer's taste preferences and then propose bean type, sugar, milk and even the type of cup best suited to the buyer. In fast-food terms UCC is Subway to Starbuck's McDonalds.
With UCC and Doutor challenging the Starbucks model the war for control of Japan's coffee drinkers has only started to brew.
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