Intelligentsia Coffee will serve up unique drinks for each store, CEO says

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Intelligentsia Coffee will serve up unique drinks for each store, CEO says

Published: 09 Nov. 2024, 06:00 Updated: 10 Nov. 2024, 15:26

KIM JU-YEON
kim.juyeon2@joongang.co.kr

SARAH CHEA
chea.sarah@joongang.co.kr

Audio report: written by reporters, read by AI

Intelligentsia Coffee's Seochon coffee bar in Jongno District, central Seoul [INTELLIGENTSIA]

[INTERVIEW]

No Intelligentsia Coffee shop looks the same in Korea. And soon, no coffee bar will serve the exact same menu, either.

According to the brand's CEO, James McLaughlin, the stores will be rolling out exclusive drinks at each of its three locations in Seoul from early 2025.

The Chicago-based coffee brand launched its first Korean branch — also its first-ever overseas store — near Gyeongbok Palace in the historic Seochon neighborhood in central Seoul in February this year.

While it had been selling bagged coffee and bottled beverages in specialty cafes and offices since 2016, and more recently on Market Kurly, the Seochon coffee bar — with its traditional hanok architecture — was what thrust Intelligentsia Coffee into the spotlight and created an online buzz that had people lining up at the store on its opening day. The brand has since launched two more branches in Seoul, all with distinct interiors that were designed to complement the neighborhood that the store is located in.

As one of the pioneers of specialty coffee, Intelligentsia Coffee prides itself on its sustainable sourcing practices, the quality of its single origin and direct trade beans, its roasteries and its talented baristas, many who have gone on to win prizes in competitions.

Its prices reflect that. An Americano costs 5,500 won ($4) in its Seoul coffee bars; on average, an Americano across 25 brands is 3,001 won, according to the Korea Consumer Agency on Nov. 6, and 1,000 surveyors on average said they thought 2,635 won was more reasonable.

Of course, Korea is no stranger to premium-priced coffee, and is more accepting of added-margin pricing strategies, which is why its saturated coffee market keeps attracting newcomers; but Intelligentsia Coffee says its specialty coffee offering is more substantial.

Intelligentsia Coffee CEO James McLaughlin poses for a photo ahead of an interview with the Korea JoongAng Daily at Coex in southern Seoul on Nov. 6. It was also the first day of the combined Seoul Cafe Show and the ninth Seoul Coffee Festival, for which booths are pictured in the exhibition space. [SEOUL CAFE SHOW]

McLaughlin believes customers are getting a fair deal for their beverage in the brand’s coffee bar for what he says is a “culinary experience.”

The stores’ design, selection of blends by season and presentation has all been curated to provide a special experience for coffee aficionados, the CEO said in an interview with the Korea JoongAng Daily in a small room overlooking a bustling, massive exhibition space in Coex on Nov. 6, where booths showcased their product as part of the combined 23rd Seoul Cafe Show and the ninth Seoul Coffee Festival.

McLaughlin shared the brand’s future plans in Korea and hinted at how the country’s affinity for Americanos — both iced and hot — could be reimported back to Intelligentsia branches in the United States.

Below are edited excerpts from the interview.

Q. How has the Korean market’s reception toward Intelligentsia Coffee been so far? What is the brand’s current approach and future plans for its stores here?

It’s been amazing. I was at the grand opening of the Seochon location and it was exciting to see the line down the block and people being excited about the space.

As seen in the United States, certain cities have preferences for certain drinks. We’re learning those preferences here in Seoul as well, and it’s definitely a much more espresso-heavy culture. The Americano in particular is very popular. So we’ve been experimenting with different espresso blends and really trying to dial in what kind of blend speaks best to the Korean market.

We also do seasonal drinks. We’re trying to educate consumers about the idea of seasonality — just like how tomatoes always taste perfect in the summer, certain coffee beans taste better depending on the season. We then incorporate the feedback from the Korean baristas into the overall program.

We’re also working on some cool unique drinks that will be exclusive to each location. Those will roll out in early 2025.

If there’s something specific that is developed in Korea that is really successful, we could take it back to the United States. Maybe a blend for the Americano.

An Intelligentsia coffee bar opened in Lotte World Mall in Songpa District, southern Seoul, on Sept. 8. [NEWS1]

Q. Will Intelligentsia Coffee be opening more stores in Korea? Do you plan on capping that number?

Yes. I can’t confirm anything specific, but we’re opening more in Seoul. We like that we don’t take a cookie-cutter approach to design and even for the ones we open in 2025, the designs will all be different.

The idea is that we don’t want to be on every street corner. We want to create these little... Let’s say sanctuaries, where someone can get the full Intelligentsia experience where every single detail is perfect. The coffee is extracted perfectly, it’s dialed in, the latte design is beautiful and it always goes across that way.

We want to create a handful of shops that are in the right neighborhood so that we can reach the right audiences and expose people to the brand.

Q. 2024 has been a year of coffee for Korea. Overseas chains like Tim Hortons and Bacha Coffee entered the market and have positioned themselves as novelty brands. How does Intelligentsia Coffee stand out from the crowd?

We want consumers to appreciate coffee as a culinary experience. For us to do that, every single part of the experience has to be thoughtful and every single detail considered. It’s like going to great restaurant. Every single detail is considered; like how someone is there when you get up to go to the bathroom, they fold your napkin and put it back on the table. That’s the level of service and hospitality that we’re trying to bring.

That starts with the design. We want customers to walk in and think that the space is really beautiful, because that sets their expectations.

In the United States, a common example is Starbucks. If you’re accustomed going to Starbucks you expect a certain experience. Its uniformity is like a fast food model. And we don’t want that at all.

When you walk through the door at Intelligentsia, you’ll see a beautifully designed coffee bar. No two will look alike. That’s very intentional. The only design commonality in the coffee bar locations is the red bags you’ll see on the shelves, but otherwise it’ll be a completely different experience.

When you walk up to the menu and order, it’s a seasonal menu. We want customers to realize that, for instance, in November you should be enjoying some beautiful Ethiopian coffees. Or, you shouldn’t be drinking coffee from Peru right now because Peru’s in harvest. Creating these subtle details — when you add them all up, creates a special experience.

And through this, hopefully they will understand why Intelligentsia is charging what they charge for the coffee and that what we’re delivering is a different experience than they’re accustomed to getting in other places.

Q. The coffee market is becoming increasingly polarized. Budget and premium chains are doing better while middle-range priced chains suffer. Do you think the trend is going to continue, and does Intelligentsia have any plans to go in the middle or low price range?

That’s a hard no. As a brand you don’t want to be caught in the middle. The inexpensive brands are delivering something very clear — it’s coffee that doesn’t cost a lot and you know exactly what you’re going to get.

What we’re delivering is amazing hospitality, design and coffee, which is why customers pay for it.

If you’re in the middle it’s neither great, it’s neither cheap and there’s no proposition that’s super compelling to customers. That’s why you’re going to see that stratification continue.

Intelligentsia Coffee CEO James McLaughlin gives a talk on sourcing coffee beans at the Seoul Cafe Show on Nov. 6. [SEOUL CAFE SHOW]

Q. Natural disasters in the world’s largest coffee bean producing nations have affected coffee bean supply and, subsequently, production prices. How is Intelligentsia Coffee navigating this problem? Will customers have to worry about their coffee becoming more expensive?

Intelligentsia is one of the early pioneers with direct trade. We work directly with the farmers and not through middlemen; we visit them every year and negotiate directly. That insulates us a bit from what’s happening in the marketplace.

The value proposition we give to farmers is: we’re not buying commodity coffee and you’re not producing commodity coffee; you’re some of the best coffee farmers in the world and we’re going to pay you like you’re the best coffee farmers in the world. So, prices are relatively disconnected from what’s happening in the commodity market. Companies that are affected by the volatility in bean prices are the big commercial players whose costs have increased. It doesn’t affect Intelligentsia as much because we weren’t paying commodity prices in the first place, we were paying well above the market.

Q. But your producers’ crops must still be affected if they’re grown in the same region.

Supply hasn’t been affected for Intelligentsia so far. The farmers that we work with are less affected than many others. And the reason I say that is because the farmers that we work with are literally the world’s best farmers. They’re super sophisticated — they're taking good care of their plants with a nutritional program, making sure that diseases and blights aren’t there. And again, even when you have a drought or excess rainfall, the farmers take much more care of their land because they’re getting paid differently.

BY KIM JU-YEON [kim.juyeon2@joongang.co.kr]