Coffee In Japan Case Study

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I/ Overview of coffee market in Japan:

1. History of coffee in Japan:
Even though Japan has been popular for its tea culture, coffee is still one of the most favourite drinks and has become more popular within the country. Coffee was first introduced in Japan in 1800s, via Dutch trading ships (Rochelle, 2014). Since the beginning of 20th century, coffee has become preferred by important people like scholars, writers, artists and served in a unique type of store called “kissaten” - a quiet place of relaxation and a meeting place for high-class people. From the 1970s, coffee started to become familiar to the general public as more shop appeared around Tokyo districts like Shinjuku, Ginza and popular student areas like Kanda (Clancy, 2015). Nowadays,
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Therefore, the market for coffee products like coffee bags, canned coffee are full of potential and opportunities for coffee producing companies (both domestic and foreign firms) to target. Brief overviews of some biggest producers and suppliers in Japan will be provided below.

1. Nestle Japan
Nestle Japan holds the leading position in supply of coffee in Japan with a retail value share of 34% in 2015 (Euromonitor, 2016). High sales amount of instant (soluble) coffee, together with the increasing popularity of product branches like Dolce Gusto, Nespresso, and Barista contributed to the continuous success of Nestle Japan. In addition, during 2015, the company also raised its products’ price by 17-21%, which also led to a higher market value of the company.

2. Ueshima Coffee Co.,
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Firstly, as mentioned from the beginning, Japan is popular for tea culture. Thus, tea will be the main competitor of coffee products on the market. Secondly, increasing costs of raw materials, which leads to higher costs of coffee products will definitely cause a disadvantage for coffee sellers to compete in terms of price with other types of drinks. In addition, due to higher health conscious among consumers, they may shift their habits of drinking coffee to a better type of beverage such as fruit juice or herbal tea (“Ready to drink tea & ready to drink coffee market size, share, growth, trends and forecasts, 2015 to 2022”,

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