Sojitz Royal Café acquires exclusive franchise rights for Costa Coffee in Japan

Sojitz Royal Café will initially open Costa Coffee outlets in Japan’s Kanto region | Photo credit: Costa Coffee

Sojitz Royal Café has acquired the exclusive franchise rights to operate Costa Coffee across Japan. 

The company, a newly launched joint venture between Japanese conglomerate Sojitz Corporation and restaurant group Royal Holdings Co., said it will facilitate Costa Coffee’s ‘full-scale entry into Japan’s café market’ with the aim of establishing the brand as one of Japan’s largest coffee chains. 

Sojitz Royal Café will initially open Costa Coffee outlets in Japan’s Kanto region, which includes the greater Tokyo area, before scaling the coffee chain across the country via company-operated and franchised stores.  

“Sojitz Royal Café will introduce Costa Coffee’s authentic, high-quality coffee hand-brewed by baristas and expand store locations in Japan to meet the diversifying needs of café customers, enrich people’s lives, and realise sustainable growth,” a statement by the company said. 

Founded in 1971, UK-based Costa Coffee currently operates approximately 2,700 stores in the UK and more than 1,100 outlets in over 40 international markets. 

Costa Coffee entered the Japanese market in 2020, utilising its relationship with parent company Coca-Cola to scale its Costa Express self-serve coffee machine network to 180 sites across the country and distributing its ready-to-drink bottled coffee products via vending machines and convenience stores. 

The coffee chain has also trialled pop-up stores across Tokyo, most notably within the Ginza Loft department store and a take-away kiosk outside Harajuku Station, both of which launched in 2021. 

Sojitz Corporation, one of Japan’s largest sogo shosha companies, formed a ‘capital and business tie-up' with restaurant group Royal Holdings in February 2021.  

Alongside six restaurant chains, Royal Holdings also operates two outlets of The 3rd Café by Standard Coffee in Tokyo. 

Costa Coffee will likley face stiff competition in the Japanese branded coffee shop market, which is led by Starbucks' 1,500-plus stores. Domestic coffee chains, Douter Coffee Shop and Komeda's c
Coffee operate around 1,100 and 900 stores respectively. 

World Coffee Portal research forecasts the total Japanese branded coffee shop market will exceed 9,180 stores by 2025.