“The future of cafés is not ‘unmanned’—it’s ‘experienced.’”
How robots, data, and specialty-grade beans create a new standard for customer return
South Korea is often called a “Café Republic”—a nation where coffee culture is not just widespread but deeply embedded in daily life. With cafés on nearly every corner, the market has become brutally oversaturated. Today, the industry stands at a major inflection point, facing the simultaneous pressures of skyrocketing labor costs, raw-material inflation, and relentlessly rising rents. For many operators, the traditional labor-dependent franchise model no longer works.
In response, “automation” has become a buzzword in the café industry. But many existing unmanned cafés have failed to gain consumer trust, falling into the trap of low-price competition and vending-machine-level quality. They adopted technology, but failed to preserve the core of a café: taste, ambiance, and experience.
This is precisely where LoungeX CEO Dongjin Kim offers a fundamentally different answer. As a veteran roaster with nearly two decades of experience, he sees robots not as cost-cutting replacements but as instruments for quality innovation. His philosophy—“Use the money saved from labor to upgrade your beans”—is rewriting the survival formula in a collapsing market. DIOTIMES sat down with Kim to hear how LoungeX blends technology, taste, and data to build the café of the future.
“Automation is no longer optional—it’s essential for survival.”
It’s great to meet you. The café market seems quite unstable these days. Why pursue aggressive expansion now?
Likewise, thank you. And yes—today’s expansion is not driven by desire but by necessity. The market is changing far faster than most people realize.
For years, café entrepreneurship was seen as romantic and accessible. But that era is over. When we speak with shop owners, their biggest pain point is always the same: labor. It’s increasingly difficult to hire, and even when they do, the cost makes profitability nearly impossible. Combined with currency volatility and unprecedented increases in green-bean prices, the traditional labor-heavy franchise structure is reaching its breaking point.
Many owners now ask us, “We can’t survive with the old model—what’s the alternative?” And they come to us. Because the pace of this shift is so fast, a purely company-owned model won’t scale quickly enough. That’s why we’re introducing an investor-participation model to accelerate expansion. It’s both a reflection of our confidence and a practical response to a rapidly changing market.
How severe is the rise in ingredient costs, specifically green coffee beans?
People outside the industry may not realize it, but the green-bean market is in a state of shock. The green-bean index, which typically sits around 100, recently surpassed 400. When combined with the weaker Korean won, the effective cost for roasters has jumped more than three to four times.
Brazil’s crop issues, coupled with global consumption growth, are driving the spike. The real problem is that prices cannot easily be raised due to intense competition. In many franchise systems, the more a shop sells, the less profit the owner makes. It’s a structural paradox—and the only sustainable way out is to dramatically reduce fixed costs through automation.
“Robots are the tool—but the essence is still ‘taste.’”
People often assume robot cafés are gimmicky but lack good flavor. LoungeX constantly emphasizes quality. Why?
Because that assumption is exactly why most unmanned cafés fail. They focused on novelty, not on the essential reason customers visit cafés: delicious coffee.
I originally studied exercise physiology in college. But during a working holiday in the Philippines, I happened to work on a coffee farm—and one cup of coffee changed my life. It tasted nothing like the coffee I had known in Korea. I returned home, bought every coffee book I could find, and spent the next 19 years selecting beans, roasting, and building extraction profiles.
LoungeX’s core philosophy is simple:
“Money saved through automation must be reinvested into quality.”
If robots save labor, that savings should not become profit—it should become better beans and better roasting. Robots may extract the coffee, but humans design the flavor. Through robotics, we achieve consistency that even skilled baristas cannot maintain hour after hour. Automation does not lower quality; it enables specialty-grade coffee at a reasonable price.
Your robots are not enclosed like typical vending-machine systems. Why insist on an open-air design?
Because a café is not a vending station—it’s a sensory space.
Many unmanned coffee machines hide their mechanisms inside metal boxes. Customers cannot see what’s happening, which creates distrust. LoungeX takes the opposite approach. Our barista robot grinds, brews, and serves coffee in full view. Customers enjoy watching the arm’s smooth, almost human motions. Vision sensors ensure safety, making the open-air experience possible.
This is what we mean by “unmanned, but experience-driven.”
“A café run not by intuition, but by data.”
You describe LoungeX as a data-driven café. What kind of data do you actually collect and use?
Cafés are one of the high-frequency offline spaces people visit—sometimes two or three times a day. When you combine order data with robotic motion logs, customers’ behavioral patterns become crystal clear.
Over four years, we’ve amassed a massive dataset: order volumes by time slot, robot speed, peak-time bottlenecks, maintenance cycles, dwell times, and more. This allows us to optimize everything—from how the robot should move during rush hours to inventory management and personalized menu recommendations.
Traditional cafés rely on the owner’s intuition.
LoungeX relies on quantifiable, operational data.
What does profitability look like for a LoungeX shop?
One of our biggest strengths is the low break-even point. Since labor cost is near zero and operational variables are minimal, a shop can be stably profitable with around 10 million KRW (approx. USD 7,500) in monthly revenue.
Our Seongsu location, for example, achieved 40% net profit margins on monthly revenues in the 20 million KRW range. In traditional franchises, reaching such margins requires much higher revenue and far more labor. While initial CAPEX exists, the payback period is highly manageable with proper site planning. And many owners say the greatest value is not financial—it’s the absence of labor stress.
Your expansion strategy seems to be shifting. Why move beyond direct ownership?
We needed to. For years, we operated 100% company-owned stores to perfect the technology and collect data. Now that the system is mature, we’re opening it to investors.
In this model, investors finance the space and equipment while our team handles operations, maintenance, and quality. Investors gain a stable, low-touch income, and the brand ensures consistency. Several pilot stores—including at Lotte World Mall—have already shown strong results.
“Automation doesn’t replace people—it sustains the industry.”
Some argue that robots take away jobs. What is your perspective?
I believe automation is not a job-destroying tool but a sustainability tool. Korea faces irreversible trends: population decline, labor shortages, and rising wages. Robots should handle repetitive tasks, while humans focus on creativity and customer experience.
Premium handcrafted cafés will always exist. But for the everyday coffee market, where millions of cups are consumed routinely, a model like LoungeX—high-quality, consistent, and reasonably priced—will become the new normal. We’re not replacing people; we’re offering a survival kit for an industry that can no longer operate the old way.
What future does LoungeX envision?
We don’t want to be remembered simply as a “robot café.” We want LoungeX to be known as a place where great coffee and engaging experiences always coexist—a content-driven brand.
Technology will continue to evolve, but our commitment to flavor will not. Saving labor cost to reinvest into better beans—and better experiences—is the virtuous cycle we want to build. That is the café of the future we envision.
[Editor’s Note]
Throughout the interview, CEO Dongjin Kim spoke with a tone of calm confidence—not born from optimism, but from 19 years of craftsmanship and four years of real-world robotic data.
In a market clouded by uncertainty, LoungeX delivers a simple yet powerful message:
“Return to fundamentals—innovate the method.”
If a cup brewed by a robot feels warmer than one made by a human, it may be because behind that robot is a commitment to genuine quality.
