You may find it hard to believe, but coffee chains such as Dunkin’ Donuts, Starbucks and Costa are still finding plenty of room in North America and Europe – there may be a coffee shop on every street corner but there’s enough space for another one!
Yet whilst the major players in the industry are still focusing upon the Western world, the real battleground for expansion is Asia specifically in the east.
India has proved to be a stubborn battleground for many, but, at the moment, the east of the continent is where the bright lights and profits lie.
Costa is one such Western chain that is jumping head first into these new frontiers.
With footholds in two Asian countries already the UK-based company has chosen the hopes to uncover gold in Pearl of the Orient sea; the Philippines.
The first Costa store could be opened up by the end of the year, with the help of one main franchisee.
Initially setting foot in Thailand and Singapore eighteen months ago, Costa themselves have stated that they “are currently in the stage of doing market research, deciding which items and food to introduce to the [market].”
Matt Kenley, the company’s international operations manager for Southeast Asia and India commented on the impending expansion by saying: “we have a short list of companies [to work with],” before confirming their intention to cut the red tape before the year is out.
But just like many other entities that are looking towards Asia, they do face some problems. The current coffee craze has not been limited to certain geographical locations: it is a predominantly global trend that shows no signs of abating. Whilst five years ago the competition in emerging economies may have been slim, and rather easy to swot away, the same cannot be said for today’s market and Costa will face stiff opposition from brands and entities that have been established in these countries for longer. Costa’s image as an ‘everyman’s’ shop doesn’t help either, not in areas where artisan coffee is proving to be especially popular.
It appears, however, that Costa are going to aim for the younger demographic in the Philippines and target 18-25-year-olds and pitch itself as a rival to Starbucks.
Some things never change.
photo: Storm Crypt – Used under creative commons