Japan’s coffee dynasty

Eyes may currently be on the burgeoning coffee markets of China and other Asian countries, but Japan, meanwhile, has had a distinct coffee culture for longer than all of them. In fact, the notorious tea-drinking country has been importing and drinking coffee for centuries, and many of the trends the global coffee industry is seeing today are established norms in Japan. The country is responsible for innovations like instant and ready-to-drink (RTD) coffee, and today’s popular pour over and siphon brewing methods that are often linked to the third coffee wave have long been preferred methods in Japan. Since the late 1600s when coffee was first introduced to Japan by Dutch merchants, its popularity, and thus importation and consumption, have been on a steady upward trajectory. According to the International Coffee Organization, Japan is the third largest importer, behind the European Union and the United States, and fourth largest consuming country, also behind Brazil. During those more than 300 years, the country has built a unique culture and subsequent brand around the beverage that has permeated in different ways around the world. Piece of history
The country’s coffee culture started percolating in the second half of the 19th century, shortly after Japan’s self-imposed global isolation lifted in 1853. It was then that coffee shops started opening up and imports peaked. In 1888, the first Japanese coffee shop, called a kissaten, opened in Tokyo. Influenced by the atmosphere of New York coffeehouses and the style of London coffeehouses, entrepreneur Tei Eikei opened Kahiichakan, kickstarting the local trend of coffeehouses as “third places” and driving consumption of coffee. Around that time, Brazil was eyeing Japan as its first major overseas market. Japan began exporting Brazilian coffee to satiate its new craving and the partners signed a treaty in 1907 that allowed Japanese migration to Brazil for farm labour, and to bolster trade. That symbiotic relationship is largely responsible for Brazil’s current dominance as a producer and Japan’s top spot as a consumer. Brazil remains Japan’s largest supplier of green and instant coffee. After a brief stalemate during World War II, Japan’s coffee culture grew stronger than ever. It was in those following decades that instant coffee was introduced to the country (invented by a Japanese scientist living in Chicago), and high-end brewing equipment makers Kalita and Hario were founded, RTD coffee was invented, hot and cold beverage vending machines were introduced, and the first Japanese coffeehouse chain launched. By the 1990s, growth in kissaten numbers stabilised as the country went through recession and coffee chains claimed more market share, particularly Starbucks. The US coffee giant opened its first Japanese location in Tokyo in 1996, which was the company’s first store outside North America. Since then, Starbucks has expanded to 1392 stores in Japan. The US’ Starbucks, Tully’s, and McDonald’s (through its McCafé brand) claim the top three spots for foreign coffee chains in Japan today, but local chain Doutor has the greatest share. “The café provides a site for ordinary, as well as extraordinary interactions as it has since its arrival in Japan in the late 19th century,” writes Merry White in her book Coffee Life in Japan. “Coffee is foreign in origin but by the early 20th century it had become culturally naturalised as ‘Japanese’ and epitomises the café.” Coffee as an art
From traditional kissatens to coffee chains to independent coffeehouses, the café plays an important role in Japanese coffee culture. It serves both convenience and a third place for Japan’s busy professionals, students, and artists. Daniel Levine, Director at global trends consultancy Avant-Guide Institute says this is further supported by Japan’s population density. “Because people live in such small apartments, they opt for public meeting places like coffee shops rather than private entertainment,” he explains. “That’s really helped the coffee and café cultures grow.” These interdependent cultures have maintained centre stage in the unique experiences provided by traditional kissatens, which are still abundant throughout Japan. Consistent with Japanese culture, every detail is executed with precision and class, from the elegant décor to the tuxedoed owner to the individual cups of coffee made to order. Naturally, the more labourious brewing processes of pour over and siphon are most common. “Like many other Japanese things, coffee making at kissatens is very mindful and specific, giving it a handmade feeling and experience which is really important to the Japanese consumer,” Levine tells Global Coffee Report. “It’s like a ceremony that happens over the creation of your coffee.” In her book, White likens the idea of coffee making as a craft to the Japanese word kodawari, which loosely translates as “disciplined dedication” or “a passionate pursuit of something”. “Coffee-making, like so many practices, is both art and craft in Japan, and the master behind the counter is producer, craftsman and artist all at once,” she says. While kodawari is at the core of the greater Japanese culture and the kissaten experience, the idea of coffee making as a craft is relatively new in most other coffee consuming countries. As the third wave introduced artisanal coffee around the world, Japan’s coffee workers have simply continued the crafts they’d always done. This isn’t to say that the third wave doesn’t apply to Japan. “That was invented in the United States,” says Jay Egami, president of UCC Coffee’s North America division, a major Japanese coffee producer that pioneered canned coffee. “Third wave newcomers have helped make coffee-making cool and so lots of Japanese roasters have copied them.” How do you take it?
While many of the independent third wave shops opening up in Japan offer some of the more unique brew styles, many are also offering espresso-based beverages – much to the chagrin of Japanese coffee purists. Despite espresso not being handmade nor part of the Japanese experience, Starbucks and other foreign chains have managed to succeed with their espresso-based menus. It has only been more recently that espresso has been embraced beyond the foreign coffee chains. Even less handcrafted are the endless offerings of RTD coffees available in Japan’s more than five million vending machines. Driven by their convenience to the buyer and cost savings for the vendor, these ubiquitous machines have become a normal part of the Japanese culture, selling everything under the sun. The proliferation of vending machines, as well as convenience stores, has made RTD coffee an especially popular coffee type. “Japan is by far the biggest market [for RTD coffee], with 55 per cent of global volume, and is relatively mature,” says Richard Hall, Chairman at global food and drinks consultancy Zenith. In its 2018 RTD Coffee Innovation Report, Zenith points to convenience and health as major factors driving growth in RTD coffee consumption across the greater Asia-Pacific region. Meanwhile, the expansion of specialty coffee shops across the region has familiarised consumers with better-quality coffee and is putting pressure on manufacturers to offer higher-quality RTD coffee in more appealing packaging formats, according to Zenith. Egami can attest to this, admitting that Asian-styled canned coffee isn’t known for attractive packaging. He says UCC is working on a line of canned coffee with a look similar to what consumers would expect from the likes of Stumptown or Blue Bottle. Although UCC may be responsible for launching canned coffee 50 years ago, the category makes up only a portion of the company’s portfolio that spans the entire value chain. UCC also produces ground, instant, and pod coffee products, and sells whole and green beans and coffee equipment. Across the coffee types, Japan is generally known for strong coffee, according to White. In fact, among the top coffee consuming countries, Japanese coffee is generally brewed the strongest. So while Japan’s significant coffee consumption is largely due to its high population density, the Japanese preference toward strong coffee also supports high consumption and import numbers. Shared interests
As the global coffee industry has expanded and Japan’s coffee culture has evolved, there has been an ebb and flow of influences into Japan and influence on other countries. For instance, Blue Bottle opened its first store in Japan in February, and Kyoto-based roaster Arabica opened a café in Kuwait in March. Kalita and Hario products are now sold around the world, and startup Dripdash is bringing Kyoto-style iced coffee to the California RTD market. As Japan has established a name for itself in the global coffee industry, the world has also gotten a lot smaller. “It’s really a function of globalisation as we’re all becoming more integrated,” Levine says.
Meanwhile the coffee, beverage, and café sectors are all experiencing consumer shifts that translate the same across countries. For example, a premiumisation trend driven by the younger and more affluent demographics. “We’re seeing this sort of connoisseurship happening across the entire food and drink spectrum, and coffee is benefiting in its own way,” he tells GCR. Also not unlike other countries, Japan is seeing a shift towards more personalised experiences and products, Levine says. “Although there has been little change in coffee drinking occasions, demand is becoming more diversified and coffee product formats are becoming more personalised.” Looking ahead, Levine and other experts expect these trends to continue within the Japanese coffee consumer market, but at greater intensities. So, as specialty and artisanal coffees and cafés continue to penetrate the country, and local and foreign brands cater to changing consumer preferences, Japanese coffee drinkers will have more opportunities to experience premium coffees that are handmade to their specifications. Follow Global Coffee Report on LinkedIn, Facebook, and Twitter for up-to-date news and analysis of the global coffee industry.