JIN-325 -- May 10,000 Coffee Klatches Bloom!

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T H E J @ P A N I N C N E W S L E T T E R
Commentary on the Week's Business, Technology and Cultural News
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Issue No. 325
Saturday June 18, 2005 TOKYO

+++ VIEWPOINT May 10,000 Coffee Klatches Bloom!
1. Revival of the Classic "Kissaten"
2. Up From Nagoya
3. Baby Boomers to the Rescue?

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+++ VIEWPOINT May 10,000 Coffee Klatches Bloom!
1. Revival of the Classic "Kissaten"

A good old-fashioned neighborhood coffeehouse, with its
easygoing atmosphere, attentive service, and pursuit of a
genuine cup of coffee, is one of the joys of Japan. The
"master" is a font of local lore, the premises brim with reading
material, and, if a house with a theme, the BGM is by request.
One can linger over a cup of freshly brewed coffee and magazine
while listening to Ravel or Prokofiev or Bird or Diz.

Sadly the classic coffeehouse, like the "sento," or public bath,
is declining in number, often giving way to self-service chains
like Doutor (est. 1980) and Starbucks (in Japan since 1996).
But there are signs of the revival of the traditional kissaten as it
undergoes reappraisal as a space for relaxation and community.
The fate of the coffeehouse may be in the hands of the baby
boomers.

An example of this revival is Tsubakiya Kohiten, which opened
in Shinjuku, Tokyo, on May 25. The coffeehouse recreates the
romance of the Taisho Era (1912-1926). With a keynote of
clean straight lines, the interior is a chic mixture of the warmth
of wood and translucence of glass. "Taisho roman" doesn't come
cheap. Towa Food, the owner of the shop, invested more than
100 million yen in remodeling, raising the ceiling to impart an
open feel. Suits in their 50s make up the lion's share of the
clientele.

At the same spot, on the second floor of a building a stone's
throw from the east exit of Shinjuku Station, the venerable coffee
shop Danwashitsu Takizawa operated for 39 years. Offering
the at-home atmosphere of a traditional Japanese restaurant,
the shop was popular with seniors.

Tsubakiya Kohiten has inherited its predecessor's tradition.
A cup of blended coffee is 840 yen, about fivefold the price
at Doutor. But service is commensurate with price. Employees
are encouraged to earn certification as coffee meisters to
ensure provision of the highest-quality brews. The company
seems to have raised the serving of coffee to almost a religious
level, requiring employees to purify themselves by scrubbing
down in a shower on the premises before attending on
customers.

Towa Food had opened five other tony coffeehouses before
Tsubakiya Kohiten. The company's sales in fiscal 2004 were up
3 percent year on year. Last week it opened in Ikebukuro, Tokyo,
another shop. The company believes the Tokyo metropolitan
market can support 30 shops.

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2. Up From Nagoya

A further example of the revival of the classic coffeeshop is
Miyakoshiya Coffee, based in Sapporo. It roasts all its beans
in house. It only allows employees with an average of three
years' experience to serve customers coffee. The company has
32 shops, including ones opened in Mitsukoshi in Nihonbashi,
Tokyo, last year and in Nagoya this year. "We conceived of a
shop where people would want to go for a cup of coffee and
our concept has won the support of customers," says Yoichi
Miyakoshi, president of the company.

Young people pack Miyakoshiya coffee shops with glass walls
in downtown Sapporo, while middle-aged coffee drinkers relax
in suburban shops that offer the feeling of the season through
"shakkei," or borrowed landscapes, and interiors reflecting
localities.

Meanwhile, Nagoya-based Komeda Coffee, which operates 270
shops in the Chukyo region, is making inroads into Kanto, with
five shops in Kanagawa Prefecture and Machida City in Tokyo.
The Kanto franchise of Komeda Coffee was purchased by Inter
Commerce. The franchisee is confident the cachet of Nagoya,
famed for its hospitable service, will win over customers in
Kanagawa.

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3. Baby Boomers to the Rescue?

Coffee shops have been declining in number from a peak of
approximately 155,000 in 1981, according to statistics of
the Ministry of Internal Affairs and Communications. Last
year there were only 84,000, or roughly half of the peak
number. Yet the numerical decline has not been uniform
nationwide. It has been minimal in western Honshu and
Shikoku. Tetsuro Nobutoki, an assistant professor at Konan
Women's University in Kobe, attributes the persistence of
the coffee shop in those regions to their inhabitants' close
neighborly ties and emphasis on mutual assistance. In Kobe,
for example, regulars will patronize a coffeehouse whether
or not it serves a good cup of coffee.

The coffeehouse's role as a gathering place may be its
salvation after the baby boom generation starts retiring from
2007. Notes Sumiko Matsumoto, director of the Institute
of Work and Adult Lifestyles, "After retirement people,
men in particular, will need a place to go. The coffeehouse
will return to the limelight as a place where one can relax
and relate to others."

How to provide gracious service and a space for relaxation
and intimate conversation? How to fit into a locality?
Companies will be inventing imaginative ways to exploit
latent demand.

May 10,000 coffee klatches bloom!

--Burritt Sabin

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EDITOR
Written and edited by Burritt Sabin (editors2@japaninc.com)

(C) Copyright 2005 Japan Inc Communications KK. All Rights Reserved.

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