SINGAPORE — Whenever marketing executive Martin Chu travels overseas, he would often create whole itineraries around the coffee joints that he intends to visit.
While the two 20-somethings are into specialty coffee with its emphasis on high quality and experience, there are also those who find joy in drinking no-frills kopi (Malay for coffee).
For 65-year-old retiree Mr Tay, Nanyang coffee has been his staple beverage for the past five decades.
Mr Tay, who did not want to give his full name, told TODAY in Mandarin that he drinks about one to two cups of kopi (Malay for coffee) each day. As he has high blood sugar, his go-to drink order is kopi-o kosong — or black coffee without sugar that typically costs S$1 to S$2.
Still, Mr Tay — who was enjoying a cup by himself at Ya Kun Kaya Toast on a weekday afternoon — said he would not go out of his way to drink coffee.
Referring to the coffee scene here, he said: “The whole world has changed. Now, people drink coffee that’s crazily expensive.”
Likewise, for 22-year-old university student Prashalini, the perfect cup for her is a blend of quality coffee served at an affordable price point, and situated at a convenient or accessible location.
Ms Prashalini, who goes by one name, said: “I’m not very picky because I just drink coffee to stay awake for school. I’m also a student, so I can’t be spending S$6 or S$7 on a coffee from Starbucks.”
‘MATURE COFFEE MARKET’ STILL ATTRACTS NEW ENTRANTS
From coffee-lovers serious about the brew, to casual drinkers just seeking a caffeinated midday boost, their growing numbers have fuelled coffee consumption and demand for the beverage in Singapore.
The Perfect Daily Grind, a coffee news publication, reported in 2021 that Singapore’s coffee consumption stood at around 15,000 metric tonnes — or about 2.6kg of coffee per capita — a year.
In comparison, Japan — Asia’s largest consumer of coffee — had a per capita coffee consumption of 3.4kg in the same year, based on data from Statista.
However, the figure for Singapore is expected to continue growing.
In April, data and analytics firm GlobalData reported that Singapore’s coffee sales are set to increase by a 3.2 per cent compound annual growth rate between 2022 and 2027.
To cater to the growing market of coffee consumers, international chains and specialty coffee shops have popped up around the island over the years.
In March, Chinese coffee chain Luckin Coffee, nicknamed the “Starbucks of China”, debuted two stores in Singapore on the same day. The stores — at Marina Square and Ngee Ann City shopping malls — marked the Chinese chain’s first foray into an overseas market.
Since then, the brand has expanded rapidly across Singapore. It now serves coffee out of 18 outlets spread across locations like Tampines, Chinatown, Tanjong Pagar, and Katong.
Shoppers at VivoCity mall would have also noticed hoarding bearing Canadian coffee chain Tim Hortons’ logo. The outlet is expected to open at the end of the year, adding to the tally of more than 5,000 Tim Hortons restaurants globally.
For many international coffee chains, entering Singapore’s market is generally part of a larger push to expand internationally in Southeast Asia, Dr Seshan Ramaswami, an associate professor of marketing education at the Singapore Management University (SMU), told TODAY.
“Clearly for upscale chains, Singapore is an obvious choice as there is a mature market of coffee drinkers who are willing to pay high prices for good coffee and ambience.”
Since the island also receives millions of international tourists annually, “these new chains likely have loyal customers in other parts of the world, who may be a natural customer base as visitors in Singapore”, he added.
Singapore’s market is also attractive to international brands because of its low tax rates, few capital constraints, low trade barriers, and welcoming attitude towards foreign investors, said Dr Wang Peng, a business analytics lecturer at the Singapore University of Social Sciences (SUSS).
Mr Kevin Khoo, the chief executive officer of Gloria Jean’s Coffees (Singapore) — which exited the country nine years ago before returning in 2021, and now has four outlets — said Singapore’s affluent and well-travelled English-speaking population being able and willing to appreciate quality products and services were a draw.
When asked if Starbucks has plans to add to its 150 outlets here, Mr Patrick Kwok, the general manager of Starbucks Singapore, told TODAY “it is always on the lookout for new spaces to be present”.
Even as international players set up shop here, more homegrown coffee chains and specialty coffee outlets are also out to stake their claim on the coffee scene.
Mr Sydney Teo, the director of Kopi & Tarts — a local brand serving traditional Nanyang coffee and baked pastries — told TODAY that it hopes to have up to 20 to 25 outlets in Singapore within the next three years.
The chain, which first opened its shop in July 2017, currently has 14 outlets.
Still, trying to enter or expand — much less, sustain and succeed — in such a competitive and saturated market is no walk in the park for any coffee business, local or foreign.
Last month, coffee chain Flash Coffee closed all 11 of its outlets in Singapore, after its owners told regulators that they were unable to keep operating due to liabilities.
In August, homegrown specialty coffee brand Double Up Coffee shuttered its only physical store at Jalan Klapa in Lavender — after operating there since February 2020.
While such developments have raised questions about the future of the coffee market here, experts said that the closures may not be reflective of the product’s demand.
SMU’s Dr Ramaswami said: “Businesses exit for various reasons, not just because the industry is not growing.”
Often, it is a particular strategy that has not paid off for the business, he added.
For Double Up Coffee, Mr Mervin Lim, its founder, told TODAY that its physical store’s closure was due to two main factors: An almost-100 per cent increase in the unit’s rent, and the plateauing of the store’s sales and appeal.
Thus, “it didn’t make financial sense for us to continue”, he said.
Finances aside, a coffee chain’s success is also dependent on factors such as store location and ambience, product assortment and quality, and staff, the experts said.
SUSS’ Dr Wang added: “Coffee chains need to find their unique value proposition and cater to a specific target audience effectively.”
For instance, Flash Coffee initially targeted young professionals due to their relatively higher disposable income, but its pricing emphasised affordability, creating a mismatch in their approach, said Dr Wang.
Furthermore, its choice of store locations, such as opening outlets among public housing blocks in older estates like Bukit Merah, does not align with their target demographic of young professionals, he added.
“This disconnect between their business model and their intended customer base likely contributed to their challenges in the market,” said Dr Wang.
“In a mature coffee market like Singapore, where consumers have access to a wide range of coffee options, both budget-friendly and high-end, strategic positioning becomes critical.”
‘FINER WAY OF LIFE’, NOT JUST ‘MERE CAFFEINE BOOST’
From international coffee chains, to specialty coffee houses and traditional kopitiams serving Singapore-style Nanyang coffee, connoisseurs and casual drinkers are spoilt for choice as they decide between kopi siew dai for S$1.20 or iced latte at five times more for S$6.
While getting a caffeine kick was top priority in the past, “third wave” coffee drinkers are discerning consumers who are conscious of the beverage’s supply chain, its social and environmental footprints, and coffee quality — which has elevated coffee’s status to one almost synonymous with the “finer way of life” today.
Dr Vanessa Liu, an associate professor at SUSS’ marketing programme, said Singapore’s growing affluence undoubtedly contributes to the continuously expanding demand for coffee in the country.
“Some might assume that Singaporeans consume more caffeine due to the country’s top ranking as the most fatigued nation in the world. However, this is a common misconception.
“The surge in coffee consumption and the increased demand for coffee shops or chains are not solely driven by basic needs. What locals truly desire is not just the nutritional value of coffee but rather the lifestyle symbolised by the coffee culture.”
The finer things in life, of course, do not come cheap.
In 2017, specialty coffee chain The Coffee Academics retailed single espresso-size cups of Esmeralda Geisha coffee at S$85 a cup, reportedly the most costly in the world at the time.
Singapore was the first country in Southeast Asia to taste the beverage, and only 80 cups were available for sale then.
Later this month, local cafe-roastery Glyph Supply Co will host Mr Boram Um, the World Barista Champion 2023, on Nov 22 and 23.
A look at its online shop shows that a “sharing session and coffee cupping” with Mr Um is retailing at S$140, while an hour-long “omakase experience”, would cost S$210.
Responding to queries from TODAY, a spokesperson from Glyph Supply Co said the Omakase experience would mimic the World Barista Championship experience, where competitors served coffees from three categories — espresso, milk beverage, and a signature beverage — to judges.
“Here, Boram will serve different competition-level exquisite coffees. These are rare coffees that cost 20 to 50 times your usual coffees. A total of five drinks will be served at this session,” the spokesperson told TODAY.
Currently, about half of the maximum registration capacity of 30 people for the Omakase experience has been filled. The sharing session would be split into two sittings, with a maximum of 12 participants per session. About half of these slots have also been filled.
Dr Liu from SUSS said: “Since the 2000s, marked as the third wave of coffee consumption, coffee has become more than just a mere caffeine boost.”
The Perfect Daily Grind said that third wave coffee is centred on increasing coffee quality, more direct trade, sustainability, and innovative brew methods — and consumers are generally happy to pay more to enjoy it.
Dr Wang added: “The third wave of coffee consumption has elevated coffee to an art form, where each cup is a carefully curated experience, reflecting a desire for quality, craftsmanship, a sophisticated coffee culture, and a finer way of life.”
To this end, curating a suitable space and unique ambience for coffee to be savoured is arguably also as important as ensuring that a quality cup of coffee is brewed and served.
Dr Ramaswami from SMU said: “Singapore has always had that ‘kopi’ culture nurtured over decades at hawker centres and kopitiams.
“The burgeoning interest is just a response to meet that underlying need to socialise but in a nicer atmosphere with more premium coffee made to order.
“Starbucks pioneered the idea of the coffee shop as a ‘third place’ in our lives, after home and work; and that idea has stuck in many consumers’ minds.”
He added that a third place refers to one which can serve multiple purposes — from quiet solo work, to a date, social meeting, or business meeting. As such, a coffee house’s environment and ambience should allow for these different types of “coffee consumption occasions”.
For Ms Elysia Tan, co-founder of Homeground Coffee Roasters, this means building a space that is a “home away from home”.
Her cafe, at Teo Hong Road at Outram Park, is clothed in beige hues, with dark red tiles and wood accents. A small overhead skylight lets natural light in, which bathes the cafe in a warm and inviting glow.
“At the end of the day, a cup of coffee should make you feel good. Comfort’s always the feeling that we want to give,” said Ms Tan, who was also second runner-up at the World Brewers Cup 2022, and two-time champion of the Singapore Brewers Cup.
Cafes like Soul Coffee at Kinex in Paya Lebar also hope to build a different space offering a unique ambience that could complement customers’ enjoyment of their coffee.
Describing itself as Singapore’s first 4D immersive cafe experience, customers stepping into the space will find themselves faced with a wall displaying floor-to-ceiling light projections of an aquarium.
Mdm Violet Wong, its owner, told TODAY that the cafe also employs an artificial intelligence Robot Barista, and offers tarot card readings and horoscope-inspired drinks.
Beyond coffee houses shaping up as third spaces, Dr Liu from SUSS added that the influence of new media and content marketing strategies, especially through social media and key opinion leaders, has also played a pivotal role in elevating Singaporeans’ love for coffee.
“This impact is particularly evident among Gen Z and younger consumers who are heavily immersed in the digital realm. One illustrative example is the growing popularity of Korean dramas, which often prominently feature coffee brands and shops.”
Besides influencers, good locations and creating “Instagrammable servings of food and drinks” may be conducive to patrons spreading the message about the brand to their peers on social media, said Dr Ramaswami from SMU.
‘POCKET-FRIENDLY’ COFFEE AND ‘CONDUCIVE’ SPACES
For casual coffee drinkers like Ms Ng Shi Teng and Ms Law Dan Qi — both 21-year-old food science university students at the Singapore Institute of Technology — being able to enjoy a good cup of coffee at “pocket-friendly” prices are the central things they look for in a coffee retailer.
Ms Ng said: “Price is what would make people see (and decide). Because if their coffee is good, what our next comparison would be is money.”
After price comes convenience, with Ms Ng saying that she is more inclined to buy coffee from an outlet in an area that she happens to be in.
Ms Law told TODAY that while she enjoys drinking specialty coffee, price is an influential factor, and she would still opt for “kopitiam kopi” to keep it “pocket-friendly” on a day-to-day basis.
“If money wasn’t a problem, I would choose Arabica (coffee),” she added.
In commercial coffee production, coffee beans largely come under two main types: Arabica and Robusta beans. Most specialty coffee are brewed from Arabica beans, while the Nanyang coffee or kopi is traditionally brewed using Robusta beans.
An article titled “Brewing Nostalgia” — published in June 2019 on the Singapore Tourism Board’s digital resource platform, the Tourism Information & Services Hub — attributes the generally-lower prices of Nanyang coffee to the Robusta beans it uses.
According to the article, early coffee brewers had to “make do with cheaper ingredients”, given the difficult circumstances these early 20th-century Chinese immigrants were faced with.
“Robusta beans were used instead of the traditional Arabica variety because they were cheap and could better grow in the Southeast Asia climate.
“Robusta also has a strong and bitter taste, with a higher caffeine content than Arabica, so early coffee brewers had to balance the flavour with sugar and condensed or evaporated milk (as) fresh milk was also considered expensive,” it added.
Such taste is something long-time coffee drinkers like Mr Tay, the retiree, are familiar with.
Asked how he has seen the coffee landscape in Singapore evolve in his 50 years of enjoying the beverage, Mr Tay said: “It’s different now”.
“There are also a lot of cafes and restaurants for drinking coffee,” he said, adding that these may not typically appeal to older folks.
“But I think the younger generation likes it. These cafes are always portrayed beautifully in television dramas.”
Mr Chu, the marketing executive, is among those who appreciate having coffee in a cafe with a pleasant ambience.
“It’s not just about drinking the coffee, but people want to have the experience of being in a nice space, maybe catching up with a friend. So how conducive that (space) is actually plays a part behind the experience of the cafe.”
Agreeing, Mr Tan, the financial consultant, said that he looks for places that are not noisy, as he enjoys having conversations around coffee.
“A coffee shop is really just a conducive environment to have heart-to-heart discussions, and to talk about life. I think most of the more eventful conversations in my life happen either around the dining table or at coffee shops.”
For businesses, tweaking their strategies and offerings to meet audiences’ different needs — while accounting for overhead costs to ensure it stays profitable in the market — will be key.
Mr Khoo from Gloria Jean’s Singapore said that Singapore is “a vital but extremely challenging market” for international brands.
“While many brands continue to view Singapore favourably as a regional headquarters for expansion into Southeast Asia, they will have to contend with stiff competition, exceptionally high rents, rapidly increasing operating costs as well as a tight labour market in the foreseeable future.”
Asked if he finds the current market too saturated, Mr Lim from Double Up Coffee said: “It is saturated in quantity but not as saturated in identity. Every specialty coffee shop has something different to offer, be it their products or branding…there is diversity.
“In a larger context, this perceived saturation is not from having too many specialty coffee shops, but rather too few customers who enjoy specialty coffee.”
Getting more people to drink quality coffee is what Ms Tan, from Homeground Coffee Roasters, hopes to do with the “Playground” — a space owned by the brand which she likens to an “Aesop or Apple store, but for coffee”.
“We expanded this space (beside our cafe) called Playground, where we call it the playground for home-brewers and coffee professionals.
“You can see it as the Aesop or Apple store, but for coffee. It’s like an experience space, where you can try anything — you don’t have to pay, there’s no commitment.”
She added: “The whole mission is always about getting more people to want to drink coffee and want to make coffee at home.”
To this end, she believes the presence of more international coffee chains in Singapore is not necessarily a bad thing, as it could signal an “opportunity”.
These chains would have the “capacity” to offer huge discounts to consumers, which could entice customers into trying coffee or getting acquainted with the field of specialty coffee.
WHAT’S NEXT FOR THE COFFEE CULTURE?
Besides the growing out-of-home coffee consumption, more consumers are also venturing into home-brewing — which has seen a market for coffee gear and equipment, coffee subscriptions, and coffee capsules.
This niche is something that coffee business-owners, like Ms Tan from Homeground and Mr Lim from Double Up Coffee, hope to fill.
Mr Lim told TODAY that Double Up Coffee would pivot to other functions within the coffee industry, after closing its physical store in August.
This includes ramping up its online presence, and focusing on its coffee roasting arm, intermediate barista training, and providing consultancy services to its wholesale clients.
It will also work towards a coffee subscription model, and diversifying its products to make specialty coffee “more approachable to mass consumers” — including exploring the production of specialty coffee capsules.
Amid the ever-growing competition in a relatively small market, coffee businesses would do well to diversify their product offerings, and innovate within the industry, said coffee business-owners and retail experts.
Mr Lim said: “Innovation is critical to push the industry forward.”
This could manifest itself in many aspects of coffee — from upstream farming practices that “improve the quality and resilience of coffee species” to new technology downstream — including ways in which roasters and baristas could increase the quality and consistency of coffee served to consumers.
One way to do the latter is via specialty coffee capsules, something that Mr Lim is exploring to “make specialty coffee more approachable to mass consumers without compromising on its quality”.
Ms Tan from Homeground said such specialty coffee capsules could be a hit in Singapore, where it is “very hard to slow down” and people may find it difficult to introduce coffee-brewing to their daily routine, even if they wanted to.
Such specialty coffee capsules will make it easy for them to still enjoy a good quality cup of coffee. Already, some specialty coffee brands both locally and overseas have begun to offer these.
Citing Singapore-based coffee machine company Morning, Ms Tan said the ability to calibrate the settings on the machine means that consumers could access a product that is very much like brewing — but which is more convenient and ultimately, much easier to use.
From the consumer point of view, offering plant-based alternatives to dairy-based coffee could also help coffee businesses better align themselves with the global sustainability push.
Ms Law, the university student, said: “I think there is room for expansion, because local coffees are mainly dairy-based.
“Now, the industry is moving towards plant-based (alternatives to milk)… there’s a potential for plant-based Nanyang coffee.”
Coffee subscriptions — which are already offered — could further catch on among coffee consumers, as more turn to perfecting their craft or brew from the comforts of their home, said some industry players.
Common Man Coffee Roasters, for example, began offering its coffee subscription programme in 2018 when it saw a growing trend in the consumption of artisan coffee, said a company spokesperson.
“Many consumers are discerning and want more than sub-standard coffee at home. They want cafe quality.”
To support customers on their home-brewing journey, the brand also introduced coffee brewing kits and machines.
Common Man Coffee Roasters said it has seen a “steady growth” in consumers’ demand for such coffee subscriptions since the programme started.
“The convenience, coupled with the ability to enjoy top-notch coffee without having to leave your house or office, is a big draw.
“We don’t see any slowing down of the desire for top-notch coffee, be it at the cafes or at home,” the spokesperson added.
Such views resonated with coffee enthusiasts like Mr Chu and Mr Tan.
For Mr Chu, brewing his own coffee means being able to control what he wants out of a cup — from the coffee beans used, to its grind size, brewing temperature, and the taste notes expressed in the coffee.
“You are taking control, you are brewing coffee the way you like best. And no one knows you better than yourself.”
The brewing process is also therapeutic for him.
“In a way, it’s some sort of a meditation — just you and the coffee in front of you, pouring, determining what you want to extract from the coffee. All these are your own experiences.”
For Mr Tan, who owns coffee brewing equipment worth around S$800 in total — including scales, electric and non-electric kettles, grinders, and brewers — the investment is worth it.
These allow him to brew his own coffee, which is akin to “taking time off to enjoy”, and helps him to “unwind”.
“I’ve done (my own brewing even) when I was at my workplace. I brought my brew, I brought all my coffee equipment there, and then it’s like a smoke break.
“I give myself 10 minutes off to just unwind and brew a cup of coffee, enjoy a few sips of it and get back to work.
At home, he brews coffee whenever he can find the time.
“It’s just like me taking a step back to re-align, and what I get out of that five to 10 minutes is a good cup of coffee I can enjoy, and a pick-me-up for the rest of the day.”