Sumidagawa Brewing.
Image: Yumi Nakatsugwa

Asahi YOU. US, Ltd has found an innovative way to further the circular economy. The wholly owned subsidiary of Asahi Group Japan, Ltd, was established in January 2022 with a focus on sustainable products and activities, not only within the Asahi Group but also in collaboration with municipalities, universities as well as other business entities. Coffee and tea companies are now benefitting from two of its craft beers, Kuramae Black and Sayama Green, which are using coffee and green tea remnants or by-products that are infused into the beer.

Kuramae Black is a coffee-blended stout beer, named Kuramae after the location of Asahi’s initial product partner, Ennoki coffee roastery. The company hopes Kuramae Black will become popular among the local community and be recognised as a special product of the region. As a coffee roaster, Ennoki conducts test roasts before finalising the roasting profile of each coffee bean. They were concerned that there was nothing to do with the remaining test-roasted beans after cupping, other than discard them. Subsequently, Asahi YOU. US developed the idea of making a craft beer using the test-roasted coffee bean.

Kuramae Black launched in July 2021. It is brewed in Sumidagawa Brewing, which had been experimenting with a coffee-flavoured beer for a long time, and it was aware that stout beer could be the best to blend with brewed coffee, as it has some similarities in colour and flavour. “Since we source the test-roasted coffee from Ennoki and another two roasters now, we cannot expect a high level of consistency unlike when we order the specific blend for the product. We closely communicate with those roasters about when and how many beans we need for the next batch so that they can prepare the stock,” said Ichiro Moda, unit leader of Asahi YOU. US. “However, it is inevitable that the taste and flavour of the bean as well as those of Kuramae Black are slightly different each time. We positively see this variability as one of the characteristics of Kuramae Black.”

Sumidagawa Brewing, a microbrewery located on the premises of the Asahi Group’s head office, produces craft beers such as Kuramae Black and Sayama Green. It was originally established in 1995, and now is under the management of Asahi YOU. US. When making Kuramae Black, it brews stout beer and coffee separately, then blends them at about 70 and 30 percent, respectively. The stout beer contains 7-8 percent alcohol, which is reduced to 4.5 percent in Kuramae Black.

Left: Kuramae Black. Right: Sayama Green
Images: Asahi YOU. US, Ltd

Going Green

Sayama Green is beer blended with a green tea infusion, which launched in April 2022. Sayama in Saitama Prefecture, north of Tokyo, is one of the most famous tea-producing districts in Japan. When making Sayama Green, they use a by-product of sencha called keba-cha (hairy tea). Keba-cha is the surface of the stem of the tea leaves that comes off during the rolling and drying process and is separated from the sencha in the final cleaning by a sorting machine.

When producing Sayama Green, keba-cha is brewed in room temperature water for three hours in order to extract a clear liquor with sweetness and umami, without much bitterness or astringency. After the infused keba-cha is strained, the liquor is boiled for a few seconds to sanitise it. Finally, the cooled infusion is blended with an Indian Pale Ale (IPA) of 30 to 70 percent, with an alcohol content of 4.5 percent.

Keba-cha is sourced from three young tea producers in Sayama: Okutomien, Yokotaen and Ishidaen. Masahiro Okutomi of Okutomien explained, “When neatly shaped whole leaf sencha is sorted, some by-products are collected separately such as stems, powdery leaf, keba-cha and so on. Those by-products are still drinkable and usable teas. They are refined by firing or roasting, then sold as stem tea, roasted tea, or powdery tea in tea shops. Keba-cha can be added to tea bags after cutting into smaller particles.” He said that it is also helpful to clean up the tea- processing machines before resuming manufacturing, since the hairy keba-cha can absorb tiny dust or odour in the machines. “We are pleased to offer keba-cha as a raw material for Sayama Green, that is a unique and effective way to utilise keba-cha and increase its value.”

Asahi YOU. US supplies its craft beers in barrels for catering services, mainly beer restaurants or pubs in the neighbouring areas. The canned products are also sold in liquor shops or ecommerce sites. The company produced 3,300 litres of Kuramae Black in 2022 and estimates it will produce 4,200 litres in 2023. Asahi YOU brewed 4,050 litres of Sayama Green in 2022 and expects 4,100 in 2023.

• Yumi Nakatsugawa has been working as a freelance writer specialising in food and restaurant management. While freelancing, she developed a love of black tea as well as tea- producing countries and tea people. Her passion for black tea has brought her to Sri Lanka, India, Kenya, Indonesia, Nepal, Malaysia, and Papua New Guinea to see tea production firsthand. Based in Japan, Yumi may be reached at: ym_n@nifty.com.

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• Project Café East Asia 2024 shows the total East Asian branded coffee shop market grew 24% in terms of outlets over the last 12 months to reach 119,221 stores, with China representing nearly 42% of the total market.
• 17 out of the largest 18 East Asian markets achieved net outlet growth over the past 12 months, with seven markets experiencing double digit store growth.
• Eighty-five percent of the 645 branded coffee chains currently in operation across East Asia originate in the region with 95 operators from outside the continent.
• 72% of East Asian industry leaders surveyed report increased sales over the last 12 months, with the same percentage believing trading conditions will further improve next year.

China leads significant coffee shop growth across East Asia

China has overtaken the US as the largest branded coffee shop market in the world by outlets, growing
58% over the last 12 months to reach 49,691 outlets. Growth was led by the rapid expansion of small
store format and delivery focused Luckin Coffee and Cotti Coffee, which added 5,059 and 6,004 net new stores respectively. Starbucks opened net 785 outlets in China during the period and is the second
largest branded coffee operator in the country by outlets.

China is the fastest growing market in East Asia ahead of Malaysia (28%) and the Philippines (15.3%).
Overall, six of the largest ten markets by outlets achieved double-digit outlet growth over the last 12
months.

Starbucks remains East Asia’s largest coffee chain – but competitors challenge dominance

Starbucks remains the largest branded coffee chain in East Asia, having opened 1,223 net new outlets in the last 12 months to reach 13,524 stores across 15 markets. However, domestic operators such as
South Korea’s Mega Coffee, Indonesia’s Tomoro Coffee and Malaysia’s Zus Coffee are challenging
Starbucks’ dominance and increasing their market share.

As the total East Asian branded coffee shop market matures, rapidly expanding operators are
increasingly seeking international growth opportunities. Cotti Coffee has entered South Korea, Indonesia, Japan and Hong Kong since opening its first store in China in 2022, while Luckin Coffee, Kopi Kenangan and Compose Coffee all opened their first international stores within the last 12 months.

Convenience key concern for Chinese coffee consumers

More than 90% of 4,000 Chinese coffee shop consumers surveyed drink hot coffee weekly, while 64%
consume iced coffee at least once a week. Indicating the role of coffee shops in driving consumption,
89% of consumers surveyed visit or order from a coffee shop at least once a week with a fifth of those
doing so daily.

Small format stores focused on convenience are widespread in the Chinese branded coffee shop market. More than 85% of those surveyed have pre-ordered or ordered for delivery from a coffee shop within the last 12 months, with 57% preferencing beverage delivery over visiting a coffee shop.

Industry optimism remains high with further sales and outlet growth on the horizon

The majority (72%) of industry leaders surveyed achieved annual sales growth in their respective markets, with the same percentage positive about current trading conditions.

World Coffee Portal forecasts the total East Asian branded coffee shop market will exceed 136,500 outlets by November 2024, and 181,500 by 2028 representing five-year growth of 8.8% CAGR.

China’s booming outlet growth is expected to slow to 24% in 2024 and 6% in 2028, while Indonesia, Malaysia and the Philippines are forecast to achieve double-digit outlet growth over the next three
years.

Commenting on the report findings, Allegra Group founder and CEO, Jeffrey Young said, “The East Asian coffee shop market is clearly experiencing rapid growth led by phenomenal outlet expansion in China, which has fast become a global coffee industry powerhouse. It is encouraging to see the established South Korean and Japanese markets continue to perform strongly alongside the growth of coffee culture in fast-developing markets such as Vietnam, Malaysia and Indonesia.”

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