85C Bakery Cafe: Why it's beating the competition!

If you've heard about the newly opened 85C Bakery Cafe - check out their 85 Cafe website(85度C咖啡蛋糕烘焙專賣店 - translated as "85 Degrees Celsius Coffee, Cakes and Baked Goods Specialty Store"), you'll likely be familiar with an interesting story about a popular coffee shop in Taiwan which has made quite a splash with its range of baked goods and specialty coffees.

Starbucks coffee shops are facing increasing competition all across Asia as Asian coffee follows the economic and social trends here, and local competitors emerge.

One very popular coffee chain here is now selling coffee with salt. I'm familiar with the coffee chain, it's called 85 Degrees in English. Next time I'm there I will see if I can buy it!

One thing is sure: 85C Bakery Cafe has really licked Starbucks in the local market in a number of ways. They have far better cakes and pastries than Starbucks ever had, for one. I've tried a number of their products, and I really enjoy the range of cakes.

While their coffees are average in flavor, they are no less 'average' than Starbucks, and they seem able to whip out a much larger range of products than Starbucks in short order, too, including teas, ice-teas, etc..

台北 > 85度C咖啡蛋糕 (台北和平東店) MiNe-iPAQ_0112 by MiNe (sfmine79)

High Prices - Low Quality

Starbucks has always tried to maintain its price-point in Taiwan, and in the early days hiked prices on baked goods several times; but with only a minimal improvement in product quality. Their range is much better than it used to be, but 85C Bakery Cafe still stocks more delicious cakes AND notably sells much more.

It's not unusual to go into a Starbucks in the late afternoon or early evening and find nothing left on the shelves to eat. The managers are SO scared of ordering too much food, and some of it going to waste that they'd rather not take the rist of not selling it out. They, of course, leave a lot of extra money on the table.

Negative Image

Starbucks has a large number of negatives in my mind these days: the trouble over their attempt at upsizing drinks really annoyed me; they tried to tell us that a medium cup was no longer 12fl.oz but 16oz because the large size was now 20oz.

This was just unfair and unjustified to customers, IMHO. I really complained more than once on that point. I don't mind price increases, really I don't. But don't increase the price by such underhand methods. It undermines your confidence and trust in a retailer.

Poor Quality Control

Starbucks quality has also suffered in recent years, in a number of obvious ways. First, coffee flavor is no longer ubiquitous; there are two types of coffee machines in use now - the traditional cappuccino machine and the automated machine.

The flavor of the coffee produced is different in strength and color between these two types of machines. I have complained so often that I no longer frequent stores that use these automated machines. It's just a waste of money to get a cup of brown water with milk in it. Even I make better coffee.

Just Being Cheap

They also cut a number of their services (including free water, and some stores no longer put out milk or cream for coffee, ... ); they make little effort at recycling by encouraging even sit-in customers to use paper cups, disposable plates and cutlery when all of these simply shout premium cheapskate. Worse, they make no effort at separating garbage that I can see.

And in the other corner?

So, naturally, when competitors arose in Taiwan; I was eager to find out which ones were better: I am a big fan of Barista Coffee which makes one of the best cappuccinos; 85C Bakery Cafe (known here as '85度C咖啡') which has great cakes and Americano; I also occasionally buy coffee at Dunkin Donuts (which is strong, succulent, and delicious). Even McDonalds is making great coffee these days. So I wonder: What will Starbucks have to do to regain my undying devotion?

A Typical Order

Oh, and by the way: I didn't mention price. I no longer value a cup of coffee by its price alone. There are great coffee shops that make really affordable coffee, in much the same way 85C Bakery Cafe does; and really high priced restaurants that can't tell instant coffee from fresh. Price is no longer an indicator of how 'good' a cup of coffee will be.

My typical order in Starbucks these days is a tall Americano with a dash of milk and a cake or pastry. That's easily NT$150 or more. And these prices seem to be rising. When I go to 85C Bakery Cafe (85度C咖啡), I typically buy a cake and an Americano (no milk) which is about NT$75-110 depending on the cake choice. And even the cheap cakes are good! At Barista, I order a cappuccino at NT$120 and a sandwich or cake for an additional NT$80 or so.

Visit 85C Bakery Cafe

If you are unlucky and don't have a branch near your home, then you can visit them virtually. The local store in Taipei is pretty much the same, except ours doesn't have a bakery, just coffee and cakes. And I recognize many of those in the video... just not the names in English! Or the pricing!

How not to run a global giant!

But their biggest challenge has been their insistence on selling only a couple of kinds of coffee on their stands. They were the first real coffee chain that went global, and they educated their clientele to buy good coffee rather than the Nestle instant coffee we've all been drinking since soluble records began.

At some point, though, their education stopped; and they ramped up the marketing instead. I can see so many ways a good coffee shop can run rings around Starbucks, that I wonder how the managers sleep soundly at night.

Now, we're treated to their vintage blend coffee served with as many toppings as a man or woman can unreasonably handle, with cream, sugar, caffeine, chocolate, etc.. it just becomes ridiculous to call this coffee any more.

Yet the nimble competitors are finding gaping holes in the market and serving them gladly. Starbucks, wake up! Smell the coffee! There are voracious and strong competitors in every niche here - each of which is itching to take part (or all?) of your business.

Coffee colored future for 85C Bakery Cafe

In 2010, the 85C Bakery Cafe (85度C咖啡) listed its shares on the local stockmarket in Taiwan as 'Gourmet Master Co. Ltd.' on the Taiwan Stock Exchange. With its symbol '2723', it started trading November 22nd. You can see its chart of performance here. You can also read the profile of Gourmet Master Co. Ltd. which describes it as producing not just coffee drinks, but also beverages (teas and other cold drinks), bakery products (cakes, sweet bread, pastries, etc.) and breads from Japan, Europe and Taiwan. There are now branches in four territories worldwide, including Taiwan and China. The English speaking world has branches in Australia and the US.

Update in 2011

This post was originally written on Jan 15, 2009 and posted on my Taiwan Blog. Fast forward to 2011, and we've seen a number of changes at Starbucks worldwide, and the growth of 85c Bakery Cafe (85度C咖啡) in several markets worldwide.

How much has really changed, though? The last iced drink I bought at Starbucks may have tasted the same the world over, but it was made from a coffee formula not fresh espresso... and now Starbucks is entering secondary coffee markets...? I wonder if they can save the specialty coffee that I have come to love!

And finally...

Wherever you are, remember "Only Coffee Beans Make Great Coffee"! And enjoy that cup of coffee!

Return from 85c bakery cafe to coffee brands.

Return from 85c bakery cafe to coffee beans.