Longreach expands Japan coffee shop footprint
The Longreach Group has completed a third investment in Japan’s coffee shop space with the acquisition of Pokka Create Corporation, which operates more than 200 stores under the Café de Crie brand.
The asset is being carved out from alcoholic beverage giant Sapporo Group. Pokka Create, which was established in 1994, is one of two food services brands under Sapporo Group Foods; the other four are involved in food products manufacturing.
Longreach is investing through C-United, a holding entity for its two other coffee chains, Kohikan and Caffe Veloce. They were integrated last year with a view to using management resources more efficiently, sharing accumulated knowledge, and realising synergies. Adding Café de Crie will create an entity with more than 600 outlets.
The private equity firm acquired Kohikan in 2018 through a carve-out from UCC Foodservice Systems in 2018. Kohikan had 277 stores at time of acquisition, making it the second-largest full-service coffee shop chain in the country after Komeda Holdings.
Caffe Veloce occupies a different segment of the market, following a Starbucks-style self-service model. Longreach bought the parent, Chat Noir, in 2020, also taking ownership of several smaller brands, including full-service coffee shops, café-bars, crepe restaurants, and izakaya outlets.
“Café de Crié is differentiated from C-United's existing brands in terms of target customers, price range, value proposition, and location, and each brand is highly complementary. With this acquisition C-United is building a new future of café culture in Japan for the post-COVID-19 era as the leading player specializing in cafés,” the private equity firm said in a statement.
The size of the investment was not disclosed, but Longreach typically pursues control buyout deals in the USD 50m to USD 250m range. The firm is currently deploying its third fund, which closed in 2019 with USD 650m in commitments.
Longreach – which targets the industrial and technology, business services, and consumer sectors – also has exposure to food and beverage through Wendy’s Japan. It acquired the master franchise in 2016 and merged it with First Kitchen, a local restaurant operator.
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