TOKYO, Japan – Japan's convenience store operators are jostling for the top spot in a famously competitive industry, and in recent years, coffee has become a differentiator for stores, says a report from Reuters.

Inspired by a popular 100 yen (just under $1 U.S.) blend launched by McDonald's in 2008, 7-Eleven touched off a boom in convenience store coffee last year, lifting Japan's long-stagnant coffee market and upsetting rival businesses. Late last month, Lawson became the latest convenience store chain to offer 100 yen coffee, a move that its president says has already helped boost sales.

Much like in U.S. convenience market, coffee has relatively high profit margins and is a top item that attracts both new and repeat customers, who typically also spend money on other items.

And while Japanese convenience stores have been serving machine-made coffee for years, it never caught on due to quality reasons. That is, until Lawson launched its over-the-counter drinks service in 2011, with a menu including blends, lattes and teas. FamilyMart followed in 2012, with self-service espresso machines offering coffee, lattes and frappes. And last year, 7-Eleven gave rivals a jolt with black coffee that was not only low-priced but also considered high quality. The 100 yen, grind-on-the-spot all-Arabica "Seven Cafe" ignited a coffee war that has intensified as FamilyMart and Lawson matched the price.

The popularity of so-called "conbini coffee" pushed coffee consumption in the world's fourth-biggest market up 4% in 2013, according to the All Japan Coffee Association, and the rise in Japanese coffee drinking isn’t expected to slow anytime soon.

And while a rising tide may float all boats, industry insiders say that canned coffee, which typically costs more than 100 yen, has seen steady declines since the introduction of bargain-priced coffee at national convenience chains. At the same time that convenience store coffee heats up Japan's 1.3 trillion yen (approximately $12 billion) coffee market, Starbucks Coffee Japan is planning to step up its premium teas and ready-to-drink products.