Coffee brands from Busan lead low-cost coffee trend

[Courtesy of Blu Shaak]

Low-cost coffee brands including Compose Coffee, theventi, and Blu Shaak that began their operations in Busan, South Korea, are expanding their stores nationwide and even attempting to venture overseas.

According to industry sources on Monday, Blu Shaak is gaining attention as a low-cost coffee brand from Busan, following in the footsteps of its peers Compose Coffee and theventi that helped sparked the trend of low-cost coffee in the country.

DandyKorea Co., which operates Blu Shaak, posted an operating profit of 700 million won ($517,115) in 2022, up 143 percent from a year ago, on sales of 8.3 billion won, up about 57 percent, according to data from the Korea Fair Trade Commission.

Starting with its first store in Nampo-dong, Busan in 2019, Blu Shaak has expanded its franchise stores and now has 218 stores nationwide. With its white and blue store interior reminiscent of the sea and its signature menu item ‘Shaak Latte’ with sweet cream, Blu Shaak is gaining momentum via word of mouth on social media. Unlike existing low-cost coffee brands, it differentiates itself by operating drive-thru stores.

“We offer most menu items at reasonable prices of less than 5,000 won, including Americano for 2,000 won, and emphasize cost-effectiveness,” a Blu Shaak official said.

Busan has the second-largest number of universities after Seoul in terms of city size and a large number of trend-sensitive young people, making it an active market for low-cost franchises.

Compose Coffee, which is leading the recent trend of low-cost coffee in Korea, started in 2014 with its first store at Kyungsung University in Busan. It currently operates more than 2,500 franchise stores nationwide a decade after its launch and is actively competing with other Korean coffee brands such as Mega Coffee and Ediya Coffee. Compose Coffee recently appointed BTS member and K-pop superstar V as its new model for global promotion ahead of its overseas business expansion.

theventi, which has 1,330 stores nationwide, also began with its first store at Pusan National University in 2014. Tenpercent Coffee and Hasamdong Coffee, which have 500 to 600 franchise stores nationwide, are also coffee brands from Busan.

An industry insider said, “As Busan is a metropolitan city with a population of over 3 million and bustling shopping districts near major universities, there is a high demand for cost-effective food among students who are sensitive to trends.”

Coffee brands with roots in Busan are also promoting quality coffee beans at reasonable prices to attract customers. According to the Busan-Jinhae Free Economic Zone Authority, about 96 percent of imported coffee beans enter via Busan Port.

“While large brands compete in tourist destinations such as Haeundae and Gwangalli, many people also visit individual cafe brands in residential alleys and university districts,” an official from the Korea Franchise Association said. “Once a brand is recognized for its competitiveness in Busan, it has a high chance of success nationwide, including Seoul.”

Local governments are also actively supporting coffee businesses and promoting franchising. Busan City implemented a coffee industry promotion plan as an ordinance in 2021 and is supporting the industry to revitalize the local economy.