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Coffee business set to take down tea industry

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Coffee business set to take down tea industry

If you were looking for a place to drink coffee four years ago, you would have had to roam all around the city to find a coffee shop in Mongolia. Now, it’s everywhere. Coffee is definitely tantalizing both the young and old in Mongolia. Seeing Mongolia as a promising market, coffeehouse chains from Asia, especially South Korea, have opened their branches across Ulaanbaatar. Considering that there are so many coffee shops in the small city of some 4,704.4 square kilometers, you would think that you can find an empty, uncrowded coffee shop easily but it’s quite the opposite. Nowadays, most cafes and coffee shops are crowded during the day, especially during lunch time. This shows how popular coffee and coffeehouse chains have become over the years. Many frequent customers of coffee shops told me that the main reason they go to coffee shops is the comfortable and quiet venue they provide besides the various types of coffees they offer. Coffee shops are the best place for a casual meeting with friends, going on a date, and doing your work and assignments. Mongolia spends more than 350,000 USD on importing about 70 percent of coffee beans and other products, according to a 2015 study on coffee consumption of Mongolians conducted by Mongolian Marketing Consulting Group.  INSTANT COFFEE VERSUS GROUND COFFEE  Manager of Mongolian Marketing Consulting Group B.Khangal said that out of 233 survey respondents aged 15 to 60, 53 percent of them drink coffee based on a 2015 survey. He says that coffee is the sixth most commonly used beverage in Mongolia – milk came in first place. “The use of coffee is high in Mongolia. All consumptions dropped between 2014 and 2015 due to economic difficulties, but the decline in coffee consumption was the lowest. In particular, it faced a decline of just three percent. There are instant coffees and ground coffees. The nationwide research shows that 73 percent of people drink instant coffee and the rest prefer ground coffee.”  YOUTH ARE QUITTING MILK TEA  Mongolians are notorious tea lovers who have made 25 variations of tea, milk tea being the specialty. However, it was surprising to discover that young Mongolians between the ages of 15 and 24 are quitting milk tea for their new found delight in coffee. “Looking at age-based studies, the consumption of milk tea is high among elderly people. When young people were asked why they don’t drink milk tea during the survey, they replied that it doesn’t suit their taste or that it makes them feel like they’re grandmas or grandpas,” noted B.Khangal. “On the other hand, so many coffee shops are opening here. Young people, especially students, are going to coffee shops to spend their leisure time productively by doing their homework, working on school projects and surfing the internet. Like so, more and more young people are drinking coffee and their tendency to drink milk tea and other beverages is decreasing.” EXPLORING MONGOLIA’S COFFEE MARKET  Mongolia imports coffee and tea worth 60 billion MNT to 65 billion MNT every year, according to Brandarte Marketing Consulting Company. Statistically, tea takes up 55 percent of this consumption while coffee accounts for 45 percent. The local coffee market grew by 16 percent in 2015 before seeing a slight decline of two percent in 2016. Since 2013, popular South Korean franchises such as Cafe Bene and Tom n’ Toms have opened more than 40 brands each, increasing the number of coffee shops operating in Ulaanbaatar to over 200. Coffee shops such as United Coffee Lovers, Ubean Coffee, Nayra, Caffe Ti Amo, Jack’s Coffee, and Bugis Coffee also provide delicious tasting coffee and service. The Ubean Coffee house, for example, has introduced green coffee, imported from Latin America, Africa, and Asia. However, the traditional tea still takes up 66 percent of the market. This market rose by nine percent in terms of revenue and by 12 percent in volume in 2016. Research shows that Expresso, cappuccino, Americano and Cafe Latte are popular among Mongolians. Coffees cost 3,500 MNT to 7,500 MNT depending on the type and coffee shop. As for instant coffee, Ye Ye, Coffee King, Mac Coffee, NesCafe and Jacobs are most commonly used and are imported from Malaysia (35 percent), Vietnam (32 percent), South Korea (12 percent), Kazakhstan (7 percent), and Russia (4 percent). Locally-produced instant coffees are Khaan, Ugudei Khaan, and Khaan Classic. A visiting coffee lover consultant from the US said the coffee brewed at the Nayra coffee shop tasted similar to Columbian coffee. He complimented the shop’s cozy ambiance for business and leisure. Patrons engage in conversation there and read interesting books and magazines. A Japanese expat says that even though Mongolia doesn’t grow coffee, the coffee market is emerging with an emphasis on specialty coffee. A main problem faced by coffee shops in Mongolia is the shortage of coffee making equipment and the absence of repair and maintenance services, says G.Ganbat, a barista at Bossam House Korean Restaurant. He hopes to open a repair service in the near future to repair espresso coffee machines. G.Ganbat criticizes some coffee shops for serving instant coffee from a single-serve packet with powdered milk, and others for automatically pouring milk and sugar into coffee without asking customers.

 DON’T DRINK MORE THAN 4 CUPS OF COFFEE A DAY

International studies have proven that consuming large amounts of coffee can cause side effects such as insomnia, nervousness and restlessness, stomach upset, nausea and vomiting, anxiety, agitation, ringing in the ears, and irregular heartbeats among others. However, low-to-moderate amounts can benefit you by boosting your mood, metabolism, and mental and physical performance. A scientist at the School of Industrial Technology of the Mongolian University of Science and Technology, M.Purevjav, gave some recommendation on the correct way to drink coffee. “No more than four cups of coffee is recommended worldwide. Two to four cups a day is a moderate amount. Drinking more can cause all kinds of side effects. There’s also the quality of coffee. The true sense of coffee is grounding coffee beans and brewing it into coffee,” he said. M.Purevjav warned that over-consuming coffee can cause side effects but gradually increasing the amount of coffee intake can help you get used to drinking large amounts without experiencing negative impacts on your health. He added that coffee can influence people’s mind and body differently and advised everyone to stick to four cups of coffee a day at maximum.

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