'The Apple of the coffee industry,' 'the third wave of the coffee industry,' and 'the Starbucks of the hipsters.' These are various nicknames attached to the coffee specialty store Blue Bottle. This is thanks to its management philosophy, which values emotional experiences in any store around the world while pursuing the best coffee.
Recently, however, Blue Bottle has unveiled a new strategy for survival in the Korean market. The brand, once a symbol of premium coffee, has actively engaged in public endeavors such as delivery app partnerships and various promotions. This is interpreted as a change to survive amid the rapid growth of low-cost coffee brands and intensifying market competition.
According to industry sources on the 18th, Blue Bottle entered the delivery app Baedal Minjok in October last year and joined Coupang Eats in April this year. This marks the first change since expanding to Korea in 2019. Blue Bottle currently operates 17 stores in Korea. It increased the number of delivery-capable stores from 5 to 10 and added online touchpoints to its previously offline-oriented strategy. There are evaluations that it has shifted from 'slow coffee' to a 'speed race.'
It is also aggressively deploying promotions. Until the end of this month, Coupang Eats offers a free size-up benefit when ordering five types of signature drinks, including Ice Nolla. They are also running a coupon event where customers receive one free drink after having a total of seven drinks, including delivery and in-store. This is an unusual move for Blue Bottle, which has emphasized its premium image and rarity.
In stores, Blue Bottle emphasizes 'experiences' by having baristas directly brew coffee using hand-drip methods and engaging customers in conversations about coffee taste and brewing techniques. The interior maximizes minimalism, thoroughly excluding unnecessary decorations, and features low tables and neat furniture arrangements, creating a space for immersion in coffee. The Blue Bottle logo is literally just a blue bottle. The simple logo, white-tone interior, and warm natural lighting have consistently reflected the brand identity across all locations globally.
The premium strategy centered around emotions was not everything. The foundation of Blue Bottle being recognized as the trendiest coffee brand lies in its efforts to offer fresh coffee. James Freeman, the founder of Blue Bottle, reportedly used only beans roasted within 48 hours when he sold from a coffee cart in the market, weighing and grinding the beans only when an order was placed. To ensure quality, Blue Bottle still focuses on a strategy centered around company-operated stores.
Concerns have been raised that the introduction of delivery services and promotions may weaken the brand's rarity and uniqueness. There is a fear that the artistry of slowness and real-time experiences, which were symbols of Blue Bottle, may be diluted. The reason behind Blue Bottle's choice of 'transformation' in this situation is attributed to worsening revenue. Indeed, the operating profit for Blue Bottle in Korea has been on a downward trend: 2.7 billion won in 2021, 2.3 billion won in 2022, 1.9 billion won in 2023, and a predicted 200 million won in 2024.
Last year's revenue was 31.2 billion won, but the burden of fixed costs such as labor costs (8.3 billion won), rent (2.9 billion won), and cost of goods sold (11.4 billion won) was significant. Due to the nature of the company-operated system, the burden of labor costs and rent increases as the number of stores grows. Consequently, since January of this year, Blue Bottle has raised prices for its major beverages, including Americano and latte, by 300 to 900 won, with Americano now costing 5,900 won and latte 6,900 won. While the high-price policy supported the brand's premium image, it has reportedly worked against consumers amid economic downturns and rising prices.
In recent years, low-cost brands such as Mega Coffee and Compose Coffee have rapidly grown in the Korean coffee market. They have gained popularity by leveraging price competitiveness. In contrast, Blue Bottle is facing criticism that its differentiation strategy has become increasingly standardized, with competitors adopting similar strategies, thus weakening its rarity. The Korean coffee specialty store market is already saturated, and as consumer patterns shift toward delivery and takeout, there are limits to growth via offline stores alone.
An industry source noted, "Given the market changes and declining revenue, it appears that a strategic revision was inevitable. The entrance into delivery apps and the expansion of promotions are stopgap measures to find new growth paths. At the same time, there remains the task of maintaining the identity of a premium brand." It will be closely watched which path Blue Bottle will take between premium and popularity.