Single serve coffee machine growth from Korea

by chee Leng (on coffee makers)
(Singapore)

Single serve coffee machine is popular and already big in Korea (how many countries you know uses single serve brewer for their cafe?) and in my opinion, it is going to get bigger.

In my previous article, I highlighted the raging coffee culture in Korea and that evidently has an impact on domestic coffee machine sales. According to GFK Korea, the value of coffee machine uplifted by USD 10 million, bring this segment to USD 29 million. All that within 2011, and that is a 50% uplift!

Of course, purchase of coffee machines might not mean that single serve coffee machine would play a big part, but it is the trend I noticed that is going to directly benefit single serve coffee brewer.

Currently, 4 out of 5 coffee machines sold are filter coffee machines, i.e. think Bunn, Mr Coffee etc, Bodum. They are low in cost and usually priced no more than USD 50. But the bulk of the USD 29 million come from espresso machines, each costing more than USD 300. While the quantity is not high, they make up by their higher pricing.

I notice that this trend is so similar to developed countries, with filter coffee machines and the coffee lovers going for espresso machines. And it is this similarity that bolster my confidence to say that in before 2014, single serve coffee machine would be a major component in the coffee machine sales in Korea.

My $0.02

Single serve coffee machine offers quality coffee that is easy to use and maintain. Folks using drip coffee machine would want something better, and this is where single serve coffee machine offers, hermetically sealed coffee grounds that ensure consistency in every cup of coffee.

For espresso machines users, they would want something simpler for their morning java, yet they do not want to sacrifice quality. A one button operation for single serve coffee machine would be ideal for them.

Nespresso is huge in Korea, Keurig has make some in roads, and many other brands are either there or trying to be there. And until now, we are just talking about domestic home consumption.

Another huge segment of coffee consumption which favors the single serve coffee machine has not been reported, and I believe this is going to be the growth engine of single serve coffee machine.

Office workers just want a good cup of coffee, espresso machines are too cumbersome, table top vending machines are "not that good" and I do not think they have the patience for drip filter coffee machine. Thus, once developed as in the case of most developed western economies, office would be the growth engine for single serve coffee machine...

So, I believe for any companies wanting to do single serve coffee machine, Korea holds the potential and appropriate resources should be allocated to developed it.