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A Green Tea Business Modeled on Coffee Culture

Updated: Dec 31, 2022

Green tea might be regarded as Japan’s national drink. It is associated with the tea ceremony and was Japan’s first major export “brand.” Yet despite these deep cultural associations, since the twentieth century, the coffee shop has come to dominate urban spaces in Japan. It is not that people stopped drinking tea, but rather that tea has been treated as a relatively cheap and quotidian beverage that one gets for free with a set meal. Broadly speaking, green tea lost its stylish or exclusive image and was thus difficult to market as an expensive sit-down drink. The specialty tea shops that do exist in urban Japan mostly market their English-style black teas. Even now in Tokyo, there are relatively few specialized teahouses in comparison to coffee shops. Still, in Japan and around the world, some entrepreneurs have seen the “green tea café” as a business opportunity. And one of their chief techniques has been to borrow from marketing in the global coffee culture. Online media, and even “barista” competitions, play an important role. This culture of the green tea café has now been brought to Nishiogi by the Green tea café Saten.

Why Nishiogi?

Koyama Kazuhiro, the Founder, and CEO of the company, along with Hibiki Fujioka, opened Satén Japanese Tea in 2018. We asked Koyama what prompted him to open Satén. “Fujioka was a head barista at Blue Bottle Coffee,” he said. “After working for around three years, Fujioka decided to leave Blue Bottle and become an independent Barista. And that’s when we decided to open a Japanese tea-inspired shop, and out of luck came across this property in Nishi-Ogikubo. Interestingly, Fujioka and I are Nishiogi locals and my grandmother's house happens to be around here. So, we both understand the trends and culture around Nishiogi. I also had this store called UNI STAND and figured it would be easy for customers from that store to come to my new store. And that’s basically why we decided to open up Satén.”

While “tea cafes” and sweet shops already exist in Tokyo, this is the first tea stand in Nishiogi that sells matcha as well as Kyushu green tea. “In the first place, there were not many Japanese tea cafes. Even today, there are very few places that serve matcha this seriously, but four years ago when we opened, there really weren't any. So, we were able to attract customers with our catchy matcha lattes and matcha puddings.”

In fact, both Koyama and Fujioka have a very close relationship with Nishi Ogikubo.

“The main reason I chose Nishiogi was that it just happened to be available. But we decided on Nishiogi because it is Fujioka's hometown and I have known this place since I was a baby.”

“This place actually used to be an Izakaya called Cardboard. When this izakaya was still in business, Fujioka and I came here for dinner and thought that we could use the interior as it was. And the layout remains the same. The ducts that we're here and the liquor cabinets we got rid of, but the refrigerator and this table are still here. I mean we’ve put black washi paper on top of this table and made small changes here and there but nothing big. We figured it would be a good way to save the extra cost. Soon after we saw the interior of this place, we were really drawn to it and settled on this property.”

Koyama’s focus when creating and running Satén was creating a specific local space. “Instead of making a store like Starbucks and expanding throughout the country,” he said, “I want to focus on the concept of locality. So, although I have thought about creating more stores, I’m not really looking to open more than two or so in the near future. Like I said before, I really want to focus on creating a local community with a welcoming atmosphere.”

Despite this focus on locality, however, the store became an attraction through social media, broadening its customer base, especially before COVID. “Our store is like Nishiogi but in some ways, unlike Nishiogi, and we attract around 70 to 80 percent of our customers from outside of Nishiogi.”

Since the opening of Satén, the store has been a hit amongst female customers, especially female university students who popularized the store on social media. “Luckily, since opening, we were able to attract customers from my former job in Kichijoji and Fujioka being a head barista at Blue Bottle Coffee. Many people from the industry came, and we were fortunate enough to be introduced in the media… Another big factor was the female students from [the nearby] Tokyo Woman's Christian University who really spread the word online and it became a big hit. So nowadays we get female customers in their early twenties and even teenagers thanks to them.”

A Tea Menu Based on a Café Concept

Japanese Matcha has become a staple in cafes internationally and Starbucks can be said to have spread the Matcha Latte and made it an international phenomenon. “Not long ago, Starbucks’ Matcha Latte was the main drink amongst matcha beverages in Japan,” Koyama said. “But for some people, it was too sweet so many of our customers have told us they prefer our matcha latte because it isn’t as sweet and different from what they offer in other cafes…. Around the second year after our opening, we were known as a matcha specialty store. Like on social media we were often known for our matcha. We don’t consider ourselves a matcha specialty store but rather a Japanese tea specialty store, so when we are introduced in the media we make sure to make that clear…. The matcha latte has always been the most popular since our opening. Recently though, there has been an increase in customers who order straight Japanese green tea and matcha”

The original way of enjoying Japanese tea is starting to become popular again.

They also have food to go with Japanese tea. Red bean paste (an) butter toast is most popular.

“We had sandwiches in the beginning but not that many people were ordering them, so we decided to cut down on the food menu. We currently have four items. Well, in Spring there is seasonal food, so we actually have three. We have matcha pudding, monaka, and baked goods. We make the pudding here, and the outside part of the monaka and red bean paste, we order online.”

In what ways could the coffee business differ from the tea business? “It's exactly the same,” Koyama said. “We make the drinks, sell the food, and in our case, we sell coffee beans and tea leaves.”

We asked if the process of making matcha lattes differed from making a traditional coffee latte. While the difference might just be the matcha and coffee, from a barista's standpoint there is a lot more attention needed. “The concept is the same,” Koyama explained, “but the skills required are distinct. In the case of coffee, there is much more logic involved. For example, you use a scale and measure the coffee, or use a densitometer to measure the density of the coffee. But for matcha, there is no concept of grams and it's measured by spoons. Recently we have been measuring by scale but until recently it wasn’t really a thing.”

Here at Satén, the milk they use for the lattes is key. “We use different types of milk when making matcha latte and coffee latte,” Koyama explained. “The main reason is to keep as much of the flavor and umami of the matcha since unlike coffee which is potent and strong in smell, matcha is not the same. Even though fine quality matcha is potent and rich in smell and flavor, it still loses these components when mixed with milk. Since matcha is not extracted like coffee, it tends to leave a grainy sensation in your mouth, so we tested over ten types of milk. But then the milk we use for our matcha lattes does not suit the coffee lattes.”

That being said, there are few customers who order coffee at Satén.

The average prices in cafes in deflationary Tokyo are now usually less than 500 yen, and we asked Koyama how he increases his unit sales. “We are seeing an increase in the demand for take-out products such as tea leaves,” he said. “Prior to the pandemic these products barely made ten percent of our sales. Now, more customers are buying tea leaves and containers which we sell here.”

One consideration in the tea business is that tea leaves' expiry date is far longer than coffee beans. Although this sounds like an advantage, it creates some difficulties in producing repeat customers. “After all,” he said, “the price per customer is low, so from that point of view, these kinds of product sales such as tea leaves, which attract repeat customers, is a crucial aspect [of business]. However, the biggest difference between coffee and tea, to put it simply, is that with tea is harder to create repeat customers since the expiry date is long…, and it lasts long in your refrigerator. With coffee, it doesn’t last more than one month, and customers will usually return to buy more in the span of around a month. So, I do feel that having worked in both (coffee shops and tea shops), it's harder for tea to create repeat customers…. That doesn’t create much movement within the industry.”

Open Design

Satén has a very open design with some seats facing the streets. It reminded us of the woodblock prints of premodern Japanese teashops along the major highways. How often are the seats facing the street used? And which season does this tend to increase in?

To be honest, not that many customers sit outside,” Koyama said. “Even those who sit outside will come inside once the seats inside become available. However, there are also those who prefer to sit outside, which is interesting…. But I would say the majority of the customers prefer to sit inside. I think it also has to do with the weather because when it's warmer, some sit outside. The months when the outside seating is used are relatively short. I would say the months of March, April, May, and June. But once it reaches 30 degrees, we can no longer keep it open since it's too hot. Once it's October and November, we open it for a bit and then close it as soon as it gets colder outside. So, I would say it’s open for more or less half a year.”

Europeans might be surprised how little these streetside seats are used by Japanese guests. “To be honest,” Koyama said, “I don’t think there’s a culture of eating outside on the terrace in the open air in Japan like in European countries. Even those places with outside seating tend to be surrounded by some type of wall or cloth. I think some people find it a bit embarrassing to be seen eating outside in the open air. But I don’t think young people care as much.”

The Impact of COVID-19

It is no surprise the huge impact COVID-19 has had on the restaurant industry. In the midst of that, Satén surprisingly had the highest recorded sales in March of 2020 with the sale of solely food and beverages. “Yeah, 2020 was definitely a strange year,” Koyama said. “Sales fell considerably but surprisingly, in March of 2020, we had the highest recorded sales of foods and beverages. We were working like it was the weekend every day, and the flow of customers was pretty crazy. Around that time, the Japanese government was mandating people to avoid tourist locations like Shinjuku and Kichijoi so many of those people started coming to Nishiogi. And actually, during this time we were trending on Instagram and other social media platforms. However, in April, when the government declared a state of emergency, and when Ken Shimura (a famous Japanese comedian) passed away, sales fell considerably. It was astonishing to see the sudden decline in the flow of people from the streets. April sales were one-fifth of March sales, so 2020 had a huge impact on us. It really made us think about how to run our business. On Friday and the weekends, we had been opening until 11 pm, but we had to close earlier because of government regulations. At one point we were doing take out only, so inevitably sales fell considerably.”

“But today, customers are back,” Koyama said, “and fortunately we don’t really see the impact of the pandemic anymore in terms of sales. That being said, we do have a one-hour time restriction and are required to close at 7 pm (during the period of our interview). Although we’re not planning on returning to night business.”

Creating Tea Media

Koyama is not only running a teashop but also actively involved in promoting his vision of tea culture through online and other media. Alongside Satén, Koyama runs The Leaf Record, a Japanese tea media platform, and also hosts Matcha Latte Art Competitions. We asked him about his future plans. “I created a company called Chushutsu Sha and work on The Leaf Record, a Japanese tea media platform where I interview people in the food and cafe industry. I am running this with two others, Mr. Ooi, the owner of Cafe Snap, an app that mainly focuses on Japanese cafes, and Mr. Yoshida who is a son of a tea garden owner and a cameraman on the side.”

The Leaf Record publishes a variety of articles and interviews related to tea. “We post advertisement articles and receive advertisement fees related to the tea industry. We also take up various topics and recently we interviewed a Japanese tea startup in Shirakawago in Gifu prefecture. We also hosted Matcha Latte Art Competitions, and last year we had the fourth competition. And this year we’re also planning on hosting the fifth competition.”

Before COVID, participants in the Matcha Latte Art Competition come from overseas as well. “The baristas are mainly Japanese from Tokyo who usually make coffee,” Koyama explained. “But for the first and second Matcha Latte Art Competitions, since it was hosted before the pandemic, we had a few baristas from overseas such as Taiwan. We get sponsors from companies and hope to do our contests abroad using Matcha from other countries as well.”

In short, Oyama is focusing on developing his own vision of tea culture through online media and investments in tea competitions. His approach promotes a culture of tea appreciation that frames the consumer experience in terms of the type of shop he has created at Satén. This culture of tea appreciation, like the green tea café itself, is modeled on the success of coffee culture, including the concept of “latte art.” The remaking of the Japanese tea house is thus still studying the success of the global coffee shop industry. (James Farrer and Izumi Tanaka July 22, 2022)

(Interview by James Farrer and Izumi Tanaka, translation and transcription by Izumi Tanaka, Japanese editing by Fumiko Kimura, copyright by James Farrer, all rights reserved).



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