The rise in coffee bean prices has led to an increase in franchise coffee prices, prompting active movements to capture demand for "home cafes." It is expected that coffee prices will continue to rise next year, increasing the demand for relatively inexpensive stick coffee, capsule coffee, and mix coffee.
According to the industry on the 20th, the popular franchise Bbaekdabang recently launched stick coffee, including Bbaekdabang Americano and Bbaekdabang Coffee Mix Classic. Bbaekdabang's stick coffee features a blend of beans from three famous coffee-producing regions: Vietnam, Brazil, and Colombia, giving it a flavor of chocolate and caramel. The price for 20 packets of this product is 4,500 won, which equates to 225 won per packet. The CEO of The Born Korea noted, "The trend of home cafes, where individuals want to enjoy coffee without the burden during a time of high prices, has established itself as a popular lifestyle," adding that they have decided to launch stick coffee considering convenience and cost-effectiveness.
Earlier this year, Daiso launched six ultra-low-priced capsule coffee types, priced between 300 and 500 won each. Consumers who have switched from franchise coffee to home cafes tend to be more sensitive to product prices, which prompted this cost-effective strategy. E-commerce company TMON introduced its first private brand (PB) called "Very Value" last year, featuring coffee capsules as its initial product, priced at 330 won each. Nespresso, the top company in the domestic coffee capsule market, has a price of around 1,000 won per capsule, which is relatively high. However, during special end-of-year promotions, the original capsules were sold for 599 won each.
With the rise in bean prices driving up franchise coffee costs, the demand for relatively inexpensive home cafes is increasing. Starbucks raised the prices of all beverages in grande (473 ml) and venti (591 ml) sizes by 300 won and 600 won, respectively, in August. The low-cost coffee sector also has increased prices this year by at least 200 won and up to 1,000 won.
The continuous rise in bean prices is attributed to ongoing drought conditions in Brazil this year, raising concerns about next year’s coffee bean harvest. Brazil is the world's largest coffee bean producer, supplying approximately half of the world's Arabica beans. David Ortega, a food economics and policy professor at Michigan State University, told NBC News that "drought, frost, flooding, high temperatures, and other unpredictable weather conditions have impacted Brazil's coffee production," adding that "such climate variability will become more frequent in the future."
On the 10th, the futures price for Arabica beans on the New York Commodity Exchange (ICE) soared to $3.44 (4,936 won) per 0.45 kg, marking an approximately 80% increase since the beginning of the year. This surpassed the previous record high of $3.38 set in 1977.
According to the Bank of Korea, the coffee import price index (in won) rose by 77.9% in the third quarter compared to a year earlier. This is the highest increase in 26 and a half years since the first quarter of 1998, which recorded a 100.6% increase. The coffee import price has increased by 67.4% as of October compared to January of this year.
An industry insider noted, "The relatively inexpensive home cafe market is expected to continue to grow next year," adding that "the phenomenon of high prices, along with the regulations on disposable products and the various inconveniences consumers have felt while using coffee shops, are drawing them to home cafes."