Walking down the streets of Seoul, Bussan, and other cities in Korea, one is amazed at the number of coffee shops. On one city block in Seoul you might pass more than 10 if you are looking. In Seoul the retail stores are at street level, basement level and often the second story of the building. The other thing you might be shocked to see is the number of shops that have 1kilo or smaller roasters in their shops and roasting every day. The question is, “Are they doing a good job roasting?”
At an event some years back, Ric Reinhart, Executive Director of the SCAA, spoke to a group of industry professionals that had gathered to do the good work of the association. He said (and this is NOT an exact quote) “If someone getting into the industry asked me what they should do when opening a coffee shop I would tell them to open a roaster-retail store.” The roasters in the room were not amused by this as they made a living roasting and wholesaling to new coffee shops. Was he trying to kill that business!?!
Upon reflection one could see the subtlety of what he was saying, and figure out that what has always been true in the industry; there is enough business for everybody as long as we make quality a priority. If new shops open and roast, they will drive more and more consumers to quality coffee and away from the mediocre coffee. If there are more customers demanding it, there will be more customers for quality wholesale coffee as those that don’t roast try to upgrade.
The true challenge is this: Just because a company is roasting their own coffee does not mean it is a superior product. If you are not providing quality coffee it will confuse consumers even more and could send them back to reliable and predictable coffee.
So there are several challenges to this new phase of in shop roasting. A great case study is to look at what is happening in Korea and learning from their successes and failures. Let’s take a quick look back before we look forward.
United States: We roasted coffee in our homes in the 1800’s and early 1900’s. We moved away from that experience in the mid 1900’s with the industrial revolution putting coffee in a convenient can on the grocery store shelf. In the 1960’s and moving forward, some coffee extremists found quality in a cup by small batch roasting and started the specialty coffee market. People and shops were resistant to roasting their own and were happy to have an industry professional do it for them and deliver fresh roasted coffee each week. Consumers now enjoy coffee all day but it is dominated by our grab and go ‘need coffee’ mentality instead of an ‘enjoy coffee’ one.
Korea: Drank tea for 6000 years, and got infiltrated by the West’s craze for coffee about ten years ago; Deciding to imitate and improve on our product. Coffee houses sprang up everywhere providing a social place to enjoy each other’s company over a delicious cup. Coffee is consumed as a means to gather. Seldom are shops open at 6:00am for the commuter but more often until 11:00pm for the late night meeting.
Challenges for the small roasting operations are similar between our two countries, but addressed differently.
Challenge 1: Roasting in the City and Putting Out Smoke.
In the United States most shop roasters are above 5 kilos (likely 12 kilos and up). Depending on where the store is situated it is often required to put on afterburners or sweepers. This adds installation costs, production costs, permits and inspections and often square footage costs.
In Korea the roasters are often 2 kilos or less. Cheap vent pipes exhaust the smoke and neighbors think it smells great.
Challenge 2: Training and Labor for Roasting staff.
In the US there is a community of roasters that help each other. If you are just starting out you can join the Roasters Guild and access the talents and skills of other roasters. There are also consultants out there that will help write procedure manuals.
In Korea it is tougher to find a mentor group. There are labs popping up everywhere that you can go and buy knowledge, although a lot of it is questionable. The SCAA licenses Roasters Guild classes to partners in Korea so they can actually get certified with the SCAA.
Challenge 3: Supply of Quality Green Coffee
In the US many of the roasters offer a range of coffee. They will offer ‘the house blend’ for the grab and go customers. They also offer ‘high end’ coffees for those customers that will sit and enjoy it or that want a pound for home. Many also wholesale blends to other restaurants and coffee shops. This means that US roasters buy grades 1-3 and carry more inventory.
In Korea the small shops roast to order for their shops and customers. They are all competing to buy the new 90+ coffees and to celebrate them as single serve drinks. At Square Garden Café, Sung Hui Park will even hand roast coffee over the open flame of the stove while you wait. This puts pressure on importers to hunt for, and contract for, grade 1 coffee that scores high. Not a lot of coffee is consumed in the home as it is a social drink rather than the morning fuel.
Challenge 4: The Big Chains
In the US, specialty coffee is driven by the chains. They are often seen as the marketing departments of the small roasting shops. The best thing that the chains do is to move people from the grocery store canned coffees to a better cup. Then a subset of those people go on to demand great coffee and find the local roaster.
In Korea, the chains are attempting to be large versions of the small shops and tend to still offer hand pours and focus on roasting their own as a selling point. They tend to be much more direct competition for the ‘little guy’.
Challenge 5: Differentiation in a Saturated Market
In the US you can still differentiate just by the fact you are roasting. The next thing you can do is single serve or hand drip the coffee.
In Korea since they already roast and hand drip, differentiation comes with interior design and food pairing. The chains don’t do this very well so the small shop still can have a competitive advantage.
Challenge 6: REALLY Understanding Quality
In the US we get together, share ideas, train each other and try to make the industry stronger. We innovate things like the SCAA scoring system and the CQI Q-Grader certification so we can improve the entire supply chain. The US also believes in the value of practical experience and trial and error.
In Korea, if imitation is the best form of flattery, then the US should be VERY flattered. Koreans are committed to continuing education but generally try not to share ideas amongst themselves. They look for formal schooling and certifications like those offered through SCAA and CQI. This is why Korea has about 4 times as many Q-Graders as the US. First year baristas are getting certified. They want to know how to do things right up front, the first time.
There are some absolutely stunning examples of quality in both countries. In the US however there is a higher likelihood that a new roaster is going to produce a high quality product as the industry will make sure they have they knowledge to do so. In Korea there is ‘book learning’ but sometimes the person that wrote the book was not a coffee professional. As the SCAA continues to spread the knowledge around the world, countries like Korea will continue to improve. In Korea there is also a desire to be BETTER than the competition, and a resistance to sharing information. This desire compensates for the cultural difference of non-collaboration.
The bottom line: Both countries are committed to quality. Neither country will tolerate small roasters doing a bad job. In the US we will educate them and make them better. In Korea the poor roaster will solve the problem by going out of business. Either way, the quality will hopefully stay high and drive more customers to desire great coffee.
Rocky can be reached at rocky@INTLcoffeeConsulting.com