Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
Tim Hortons, Blue Bottle struggle with fast-changing consumer tastes
A barista prepares for the opening of the first Korean store of Tim Hortons in Gangnam District, Seoul, Dec. 14, 2023. Newsis
By Park Jae-hyuk
Premium coffee brands lose steam amid fierce competition
Foreign premium coffee chains are losing ground in Korea’s fiercely competitive market, with the recent closure of a Tim Hortons store in Incheon’s Cheongna International City signaling the growing challenges they face.
BKR, the Korean licensee of the Canada-headquartered brand, shut down the company-operated store on June 1, just over a year after it opened in April 2024.
It was the first time BKR has closed a Tim Hortons store since December 2023, when it introduced the brand to Seoul and drew long lines of customers eager to get a taste.
The company said it is looking for a better location to open another store in Incheon, but the closure is widely seen as a signal that the brand was outcompeted by lower-priced local rivals, as Tim Hortons has faced criticism for charging higher prices in Korea than in Canada.
Without directly addressing the pricing issue, BKR recently decided to cut the price of the Tim Hortons Original Iced Capp to 1,999 won ($1.47) from 5,100 won between the June 5 and 18 period. Even after the promotional period, consumers will be able to purchase the blended frozen coffee for 1,999 won using coupons distributed starting June 19.
With plans to open more than 150 Tim Hortons stores in Korea by 2028, BKR is also seeking franchisees, who can reduce the company's financial burden of operating stores directly.
Although BKR has not disclosed separated earnings from its Tim Hortons operations, industry officials have questioned the brand's prospects, pointing to the declining performance of Blue Bottle Coffee in Korea.
People walk past a Blue Bottle Coffee store in Seoul, March 23, 2022. Newsis
The U.S. premium coffee brand also drew hundreds of customers when it opened its first Korean store near Seongsu Station in Seoul in 2019. Building on that momentum, the California-based chain pursued aggressive expansion in Korea.
However, Blue Bottle Coffee Korea's operating profit plummeted 89 percent year-on-year to 200 million won in 2024. The Korean operator also reported a net loss of 1.1 billion won that year.
As of the end of 2024, its cashable assets totaled just 1.9 million won.
In response to slowing growth, Blue Bottle began offering delivery through the Baedal Minjok food delivery app last October, despite criticism that the move clashes with the brand's identity of offering high-quality hand-drip coffee.
"Foreign brands tend to lose favor among Korean consumers when they are no longer seen as something new," a franchise industry official said. "To survive in the Korean market, they have no choice but to adopt strategies tailored to local consumer preferences."