First-Generation Coffee Franchises See Profits Fall; Desserts and Premium Beans Key to Survival

South Korea's once-dominant first-generation coffee franchises are facing a significant downturn, with major players like Starbucks and Coffee Bean reporting decreased operating profits for the past year. Chosun Ilbo's analysis reveals a clear divergence in the market: while many established brands struggled, those that strategically pivoted towards enhanced dessert offerings or the use of high-quality, premium coffee beans managed to buck the trend and continue their growth trajectories. This shift indicates a maturing consumer palate and a growing demand for more specialized and differentiated coffee experiences. The retail sector interprets this trend as a signal that the era of relying solely on a 'good enough' cup of coffee and a comfortable ambiance is over. Consumers are now seeking more value, whether through unique food pairings or a superior coffee quality, forcing older franchises to re-evaluate their business models to stay relevant in an increasingly sophisticated market. The success of dessert-focused and premium-bean businesses highlights the need for innovation and adaptation in the highly competitive Korean coffee landscape.