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Tag: coffee

  • Vietnam is Nestlé’s fastest-growing market in South East Asia

    Vietnam is Nestlé’s fastest-growing market in South East Asia

    Nestlé South-East Asia posted solid growth last year underpinned by double-digit growth in Vietnam. The growth was based on strong momentum gained by five of its biggest brands, MILO, NESCAFÉ, MAGGI, NAN and Nestlé itself. This year, the Swiss giant plans to improve organic sales growth and underlying margins as it progresses toward its 2020 target.

    Chris Johnson, Executive Vice President, Chief Executive Officer Zone, Asia, Oceania and sub-Saharan Africa (AOA), speaks to Retail News about how one of the biggest companies in the world has set its business goals for 2019 and contributes to the Vietnam’s overall socio-economic development.

    Can you share the highlights of Nestlé’s business performance last year?

    Nestlé Vietnam has had strong performance in the last four years and we are among the fastest growing food FMCG companies in Vietnam.

    Although Vietnam is not a huge market for Nestlé, it is the fastest growing market in Asia. And its contribution to growth has been important. We have much confidence in the growth potential of Nestlé Vietnam based on a strong and growing economy and burgeoning middle class and population.

    If we look at other countries, sometimes we are strong in one or two categories, but here we have a broad presence in a number of categories. MILO is the strongest brand for Nestlé Vietnam along with four other brands including NESCAFÉ, MAGGI, Nestlé itself and NAN – infant nutrition.

    Last year our efforts were recognized by the government with an award for being the 59th biggest corporate tax payer from the Ministry of Finance, a Certificate of Merit for significant contribution to the FDI sector over the last 30 years in Vietnam from the Ministry of Investment and Planning, a place in the list of top 10 sustainable businesses in Vietnam by the Vietnam Council for Sustainable Development, and an award for prominent employer in manpower development from the Ministry of Labour.

    This year we expect Vietnam will continue to be an important, growing contributor to Nestlé.

    Nestlé Vietnam is a key contributor to not only the growth of Zone AOA but also the Nestlé Group.

    What is Vietnam’s role in the development of Nestlé in Asia?

    Vietnam is important not only because we have a strong business here but also because of the coffee landscape. Vietnam is the second biggest coffee producer in the world and the biggest in robusta. Nestlé is the biggest buyer of coffee in Vietnam with an annual purchase volume of 20-25 percent of the total coffee output. We also invested above $600 million into the economy via coffee purchase and exports.

    In 2011 Nestlé unveiled the NESCAFÉ Plan, among whose important aspects was helping Vietnamese farmers with their crops. Our agronomists provide farmers with training in good agriculture practices and technical assistance. We have distributed 27 million high-yield plantlets since 2011, encouraged farmers to reduce water usage 20 percent and increase their income and resilience through better farming practices, and have provided 200,000 training sessions to farmers to develop the industry.

    The reason we do this, the core philosophy of Nestlé, is that this is not about donations, it is good business for us that Vietnamese coffee farmers do well. That assures we have good-quality supply for the world. Vietnam is a good example of how Nestlé operates well for other countries.

    How does Nestlé plan for short-term and long-term investments in Vietnam for 2019 and subsequently?

    We have a long-term vision and a firm belief in the potential of the country. In 2017 we inaugurated the Bong Sen factory in North Vietnam and a new distribution center in the South.

    In 2018 we further expanded our business, notably through a new distribution center in the northern province of Hung Yen and the NESCAFÉ Dolce Gusto production line in the southern province of Dong Nai. This year will be another year of growth with more and more capacity in line with our ambition in Vietnam.

    Our growth priority remains, and our 2019 activities will continue our long-term strategy that is set for 2017-2020. We want to introduce new products that meet new consumer needs, and Creating Shared Values – CSV will always remain a big driver of our goals.

    Once again, as the world’s top conglomerate in nutrition, health and wellness, we aspire to take a holistic view of our product offerings. This means we must improve our recipe to increase good nutrients, while reducing fat, sugar and salt. At the same time, we want to promote a healthier lifestyle for our Vietnamese consumers and Nestlé looks forward to more collaborations to fulfill this mission.

    The overall plan is to continue to grow, continue to focus on our five core brands in Vietnam. We believe Nestlé Vietnam can reach mid-double-digit growth in 2019.

    What activities have been undertaken in support of the United Nations’ sustainable development goals?

    Since its inception in 2011, the NESCAFÉ Plan has been hailed as one of the most successful public-private partnerships by the Ministry of Agriculture and Rural Development. In eight years we have distributed over 27 million high-yield, disease-resistant plantlets to help farmers replant over 21,000 hectares of aging coffee trees.

    In addition to supporting sustainable farming practices in accordance with international 4C standards, the program also assists farmers in managing coffee quality and supports them in updating market information.

    We see this initiative as a win-win situation because farmers can get a better life and improve their income by 30 percent while Nestlé benefits from high-quality coffee products.

    In addition to the NESCAFÉ Plan, MILO via the Activ Vietnam program in conjunction with the Ministry of Education and the Government’s Project 641 have embarked in grassroot sports development and promoting a healthier lifestyle in school.

    Nestlé Vietnam provided the market with two billion fortified servings in 2018 and has been collaborating closely with the Ministry of Health and the National Institute of Nutrition in the proposal of the national Recommended Daily Allowance (RDA).

    We also promote woman entrepreneurs under the NESCAFÉ Plan, improve women’s incomes in rural areas through the “Go rural” project with the Women’s Union. We are also a signatory to UN Women Empowerment Principles. We recognise that among others, gender equality and women’s empowerment are critical to Creating Shared Value for our business with a respect for diversity.

    How do you view the challenge of competition from local and foreign firms in the coming years?

    We always welcome competition. At the end of the day consumers benefit from competition because they have more choices. More importantly, that drives us to work hard and be competitive every day. We have been trying to do the right things in producing high-quality products while the market is becoming stronger and stronger thanks to competition.

    This is your first trip to Vietnam since you took over as Executive Chief Officer Zone Asia, Oceania and sub-Saharan Africa (AOA) in January. What is your most valuable takeaway from the trip?

    I have only been in the job now for about two months and Vietnam is the third market I have visited after China and India. The most valuable thing for me is to connect with the people working here. We have over 2,300 employees and I am very proud of the team here.

    The next step will be making sure that Nestlé Vietnam continues to cooperate with the government and farmers to ensure successful operations and make social contributions when doing business in the country.

  • Bo’s Coffee acquiring new Shops

    Bo’s Coffee acquiring new Shops

    ilipino cafe chain Bo’s Coffee plans to more than double its store network within four years and is also eyeing expansion into the Middle East.

    In an interview, founder Steve Benitez says the ambitious growth plan has been fuelled by strong local demand. With 103 cafes currently, Benitez is targeting between 200 and 250 by 2022.

    “Our job is to make sure that we are able to popularize coffee and be able to supply so much, not only in the Philippines but globally,” he said.

    In its home market, Bo’s Coffee, which was founded in 1996, will be targeting Luzon, especially given the brand has “only scratched the surface” there to date.

    In the Middle East, Bo’s Coffee plans to open a second store in Qatar shortly, followed by three more within two years. Other markets in the region are now in its sights.

    The expansion plans will be accelerated following an investment by Philippine-focused Navegar Fund which was attracted to Bo’s Coffee by its efforts to support local coffee-growing communities.

    “Seventy to 80 per cent of our coffee beans are sourced locally,” said Benitez. “We were trailblazers. We started featuring Philippine coffee and the other shops followed after.”

    Bo’s Coffee recently opened a 300sqm flagship store in Cebu which supports social enterprises by partnering with local micro-small entrepreneurs in their store interiors, products, and merchandise inside.

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  • Starbucks India caught profiteering from tax cut

    Starbucks India caught profiteering from tax cut

    Starbucks India could be fined after failing to pass on a hefty GST cut to its customers. India’s director general of anti-profiteering (DGAP) has found that Tata Starbucks profiteered by not reducing its prices when the government reduced the GST from 18 per cent to 5 per cent in November 2017. Starbucks India is a joint venture between Tata Group and Seattle-based Starbucks.

    The DGAP submitted its report to National Anti-Profiteering Authority (NAA) recently.

    “The company is found to have profiteered Rs 4-5 crore (US$564,000 to $705,000) as it did not pass on the benefit of GST rate cuts to its customers,” a source told the online publication. “The case is now being heard by the NAA for a final decision.”

    Last year, a regular latte at Starbucks India cost Rs 205, equivalent to US$2.89 plus 5 per cent GST. An overcharge of 13 per cent is equivalent to 38 cents on every cup sold. Starbucks may argue it increased its prices at the time coinciding with the cut to offset increased overheads.

    The probe was sparked by a customer complaint who was unhappy that the company did not reduce its prices when the tax rate fell by such a large margin.

    says that under India’s GST system, businesses have an obligation to compute and pass on the benefit of tax-rate cuts to consumers.

    “Any reduction in rate of tax on any supply of goods or services or the benefit of input tax credit (ITC) shall be passed on to the recipient by way of a commensurate reduction in prices,” rule 171 of the Central GST (CGST) Act, 2017, reads.

    A spokesman for Tata Starbucks emailed the publication saying the company “conducts its business ethically and complies with all the local laws and regulations”.

    A decision on the case will take up to three months. If the NAA rules against Starbucks India, the company can be forced to reimburse affected patrons. In the case of a coffee chain, it would be impossible to identify all the affected customers, in which case the NAA may order the overcharged sum to be deposited into a government-operated Consumer Welfare Fund. The authority may also impose a fine.

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  • Starbucks Reserve® Roastery Tokyo opened door

    Starbucks Reserve® Roastery Tokyo opened door

    This week, Starbucks celebrates the opening of the Starbucks Reserve® Roastery Tokyo, a four-story tribute to premium coffee quality, innovation and human connection. This will be the fifthRoastery globally, opening to the public on Thursday, February 28, at 7 a.m. JST, reaffirming the company’s 23-year commitment to Japan. The Roastery pays tribute to the important role that Starbucks Japan has played in shaping the foundation of the Company’s international growth. The Roastery introduces customers to more than 100 unique coffee and tea beverages and merchandise, as well as a menu of artisanal Princi Italian fare for the first time in Japan.

    It also celebrates the Japanese culture of connection and craftsmanship through the first AMU Inspiration Lounge –from the Japanese “amu,” meaning “knit together”–to host community gathering events and is planned to become Starbucks first Specialty Coffee Association certified training location in Japan.

    “As the first international market outside of North America, Starbucks Japan has contributed 23 years of innovation for the company globally,” said Kevin Johnson, CEO, Starbucks Coffee Company.

    “The opening of the Tokyo Roastery will further amplify what Starbucks Japan has done across all stores in the market for more than two decades—innovating and delivering the finest quality coffee one person, one cup and one neighborhood at a time.” Takafumi Minaguchi, CEO, Starbucks Japan, added, “The Roastery will amplify and inspire coffee passion across all Starbucks stores, and will serve as a catalyst for a new wave of growth centered on the customer experience and passion for coffee and service. Beginning with the “Make it Yours” campaign that will commence at every store in Japan upon the opening of the Roastery, customers will be invited to experience the first Starbucks coffee roasted exclusively in Tokyo, for Japan, and available in a variety of coffee beverage styles.”

    Collaborative Design Highlights Japan’s Natural Beauty

    Located in Tokyo’s vibrant and creative neighborhood of Nakameguro, the Roastery’s enchanting design was inspired by the famous cherry blossom trees lining the Meguro River.

    The building’s glass walls and terraced floors seamlessly fold into the fabric of the neighborhood, bringing visitors eye-level with the cherry blossoms and the four seasons of the river to reflect the natural beauty and sense of harmony found across Japan.

    The Tokyo Roastery is the only Starbucks Roastery location designed in collaboration with a local architect from the ground up.

    The exterior was brought to life in collaboration with renowned Japanese architect Kengo Kuma. Envisioned by Liz Muller, Starbucks chief design officer and lead designer for all five Roasteries globally, the Roastery highlights the work of local craftsmen and women to create an enchanting destination for coffee exploration and discovery.

    The Tokyo Roastery merges traditional and modern design to deliver a unique and inspired experience across all four floors. Upon entering the Roastery, customers are greeted by the world’s largest Starbucks Roastery coffee cask, four-stories and over 55 feet of blush-tinted copper adorned with hand-crafted copper cherry blossoms, which changes hues throughout the day in different lights.

    The expansive cask was built using the technique of tsuchime, a tradition of copper beating, where each person involved in the building of the Roastery was offered the chance to hammer a portion to create its texture and pattern. The cask’s unique color is balanced against the light wood which has been carried into the interior to give the store a brightness found throughout traditional Japanese architecture.

    Throughout the Roastery, local craftsmen and women were brought together to incorporate their expertise and traditional craft into the design elements.

    The wood-tiled ceiling was inspired by the art of origami, providing a stunning visual experience. The light and airy space carries the light wood used on the exterior to the inside, giving the experience an enchanting aura.

    The wood, sourced locally, has been treated throughout with a traditional technique which prevents it from aging, ensuring the brightness is maintained inside and outside in the years to come.

    Enchanting Immersive Coffee, Tea and Mixology Experience

    The coffee journey at the Reserve Roastery Tokyo is an immersive experience and education in coffee, and its process—from green bean to cup—which begins at the Main Bar on the first floor.

    The open floor plan draws customers into the immersive experience, introducing them to the skilled art of roasting, brewing and hand-crafting beverages. The Reserve Roastery serves the freshest cup of coffee and it is here on the first floor that customers can taste Reserve coffee beverages such as Barrel-Aged Cold Brew.

    The Princi bakery serves handcrafted, authentic artisanal Italian fare that is baked fresh in the Roastery throughout the day. For the first time in Japan, customers can enjoy freshly-baked breads, cornetti, focaccias, pizzas, salads and more.

    An airy staircase leads to the second floor, where customers will be transported into the tradition of Japanese tea at the world’s largest Teavana Bar.

    Exclusive tea beverages, such as the Pop’n Tea Sakura Jasmine, featuring a vibrant hibiscus and cherry popsicle atop a floral jasmine tea, will delight customers with their charming appearance, Japanese ingredients and unique flavor combinations, modernizing the tea experience. On the terraced third floor, Starbucks Japan’s first cocktail bar, Arriviamo™, puts innovation, mixology and cocktail craft on full display.

    The two walls of spirits bring together the Arriviamo menu, featuring coffee and tea-inspired cocktails only available at the Tokyo Roastery, including the Nakameguro Espresso Martini made with chestnut liqueur, crème de cacao and espresso, then paired with decadent chocolate  from Nakameguro’s “green bean to bar CHOCOLATE” brand. Wine, beer and classic mixology beverages will also be available.

    Conversations with an Impact

    Starbucks Japan has more than two decades contributing to the communities it serves.

    The fourth floor of the Starbucks Reserve Roastery Tokyo is home to AMU Inspiration Lounge–a dedicated space for the community to gather for hosted social impact conversations. The concept of “AMU,” which means “to knit together” in Japanese, is founded on human connection and passions coming together, something Starbucks has long believed in. For the first time at any Starbucks location in the world, this intimate space will serve as a platform to host change-makers and creative thinkers from across Japan. The first event in April will celebrate the role of women leaders in Japan.

    The Roastery is planned to become Starbucks first certified Specialty Coffee Association (SCA) location offering training for coffee professionals in the near future.“We believe that where passions connect, the future is sparked, and we will offer the Tokyo Roastery as a gathering space to spark new ideas and create an impact,” said Minaguchi.

    “The Roastery signifies our commitment to fostering moments of human connection over a cup of coffee and using these moments to create positive social impact in the communities we serve.”

    With more than 37,000 partners who proudly wear the green apron across Japan’s 47 prefectures and 250 at the Roastery itself, Starbucks Japan will amplify coffee craft and innovation by freshly roasting small-batch coffees from around the world every day in Tokyo and introducing new beverages, concepts and inspiration to all 1,400 stores across Japan. This amplification will begin with Tokyo Roast coffee, a Starbucks Japan-exclusive coffee, available throughout the market on opening day.

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  • Wayne’s Coffee debuts in China

    Wayne’s Coffee debuts in China

    Swedish cafe chain Wayne’s Coffee has opened its first outlet in China. The new store on Shanghai’s Nanjing Xi Lu serves coffee, sandwiches and Swedish pastries to consumers. The move represents a courageous first step in a market dominated by international and local competitors. China is Wayne’s second market in Asia after the brand launched in Vietnam in June last year. It currently operates seven locations in Ho Chi Minh City.

    While the brand has been criticised for lacking a distinctive look and presumed by some observers to be a local Starbucks clone, the brand has in fact been running in Sweden since 1994, where it was the first venue in the country to serve cafe latte. It was also the first to serve the latte in Saudi Arabia when it opened there in 2010.

    Wayne’s more aggressive expansion phase was recognised when the brand won “Franchise chain of the year 2017” in Stockholm. It currently operates more than 140 locations internationally.

  • Starbucks China unveils new third-place experience concept

    Starbucks China unveils new third-place experience concept

    Starbucks today unveiled its first Starbucks Reserve® Bakery Cafe, featuring fresh Italian Princi food, in China. This brand new third-place (in-store) experience is dedicated to the premium Starbucks Reserve® coffees served alongside artisanal and made-to-order food prepared by Princi bakers onsite every day.

    Each baker has been meticulously trained in the acclaimed Italian baker Rocco Princi’s distinctive method of artisanal craft of baking to perfect the recipes for each food item. The cafe also features an expanded menu of Starbucks signature Mixology, including distinctive coffee and tea-inspired cocktails, Italian classics like Aperol Spritz, fine Italian wines and beers.

    This will be the first-of-its-kind Italian Aperitivo experience (early evening social cocktails paired with small bites) in a Starbucks store location within China.

    “For 20 years, Starbucks has revolutionized, and set new standards, around the third-place for our Chinese customers. Today marks yet another significant milestone as we take everything we have learned around coffee and our relentless pursuit for food innovation, to create a new exciting all-day cafe dining and Italian Aperitivo experience,” said Belinda Wong, ceo, Starbucks China. “Our ability to consistently elevate the customer and brand experience in a meaningful and respectful manner truly reflects Starbucks unmatched energy and operational capabilities to execute against our Purpose-driven Growth Agenda to play the long game in China.”

    As a showcase of Starbucks undisputed coffee leadership in China, the cafe features Starbucks ReserveTM Princi™ Blend as the signature coffee offering for its handcrafted espresso beverages made using the Black-eagle Espresso Machine. This special Reserve blend can also be enjoyed freshly-brewed using the Siphon brewer, Pour-over or Starbucks Draft Nitro.

    Authentic, freshly prepared food is the centerpiece that creates the vibrancy and intimacy within the cafe. Customers can share meals with family and friends at the large community table just feet away from the baking oven and the bountiful display of food creations.

    Inspired by the passion and romance of Rocco Princi’s belief to infuse ‘Spirito di MilanoTM’ into this new retail environment, the coffee theatre transforms into a full mixology bar to offer Starbucks-distinctive coffee or tea-infused craft cocktails, beers, and a fine selection of Italian classics and wines specially curated by Rocco Princi, as the day turns into evening.

    Each day from 5 pm to 7 pm, the store celebrates “Aperitivo Time” where customers can enjoy handcrafted cocktails, wine and beer with free-flow of pizza bites, green olives, and schiacciatine.

    They can choose to enjoy this unique Italian evening social occasion by relaxing at the cafe’s outdoor patio with friends and loved ones, just like Italians would across the streets of Milan.

    “I am excited to work with my Princi partners, and Starbucks, to unlock the infinite possibilities of Princi food elevating every daypart for our Chinese customers, from breakfast, lunch, to the new evening Aperitivo experience. This exceptional opportunity to pair Starbucks Reserve coffees with Princi’s 30-year heritage of serving only the freshest and artisanal food, in a brand new store format, is another dream come true for me,” said Rocco Princi.

    With more than 3700 stores in 158 cities, no other coffee retailer in China has the depth of Starbucks coffee expertise, strength of the most sought-after world-class retail locations, and pipeline of meaningful innovations to elevate the customer experience.

    Building on the overwhelming positive reception of freshly baked Italian PrinciTM food at the Shanghai Roastery, and the continued enthusiasm customers have towards Starbucks portfolio of innovative store concepts, the Starbucks Reserve® Bakery Cafe is yet another reflection of Starbucks holistic approach to build an exceptional third-place experience, further cementing its unparalleled leadership and success in China.

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  • Starbucks Malaysia celebrates Reserve’s success

    Starbucks Malaysia celebrates Reserve’s success

    Starbucks Malaysia plans to open two or three of its premium Reserve concept stores annually. The brand’s eighth Starbucks Reserve store opened at the end of last month, a 5000sqft flagship at Berjaya Times Square, three years after the first outlet launched at The Gardens Mall.

    “We did not anticipate such a strong reception for the new concept store”, said Starbucks Malaysia & Brunei MD Sydney Quays. “We were surprised because a lot of people were interested to learn about coffee and the various ways of brewing.

    “This is what inspired us to open more Starbucks Reserve stores. The opening of the Starbucks Reserve Berjaya Times Square amplifies our passion for coffee and our ongoing commitment to continue providing unprecedented coffee experiences and knowledge to the Malaysian community, while fostering a culture of human connection”, he said.

    The new rollout schedule aims to cater to Starbucks’ loyal customers’ burgeoning interest in coffee. The brand is planning 30 Starbucks outlets per year including the Reserve venues, as well as regular stores, drive-thrus and small-format stores.

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  • Starbucks India to add around 10 stores this fiscal

    Starbucks India to add around 10 stores this fiscal

    Starbucks, a 50:50 joint venture between Tata Global Beverages and Starbucks Coffee of the US, is planning to add up to 10 new stores in the next two months, taking the total count to around 145 outlets, said a top company official. According to a report, the premium coffee chain is increasing the number of roll outs as it is getting overall good consumer response, said Tata Global Beverages (TGBL).

    “We currently have around 136 stores and we would open another between 5 to 10 stores by the end of the year (fiscal). We have seen an increase in the store roll out. We look at activating more stores roll out in the next few years, what we have seen in the past,” L Krishnakumar, CFO, TGBL Group said.

    Tata-Starbucks has recently started food delivery through online food aggregator apps like Swiggy.

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  • Top 9 things to know about Starbucks Dewata coffee sanctuary

    Top 9 things to know about Starbucks Dewata coffee sanctuary

    Recently, Starbucks celebrated the journey of coffee from seed-to-cup by opening its largest destination in Southeast Asia – the Starbucks Dewata Coffee Sanctuary.

    1. Original Logo

    Starbucks opens the Dewata Coffee Sanctuary with an original logo, crafted in the Geringsing Double Ikat technique, inspired by the deep traditions of the seed-to-cup story. Double Ikat, found only in Bali, is a weaving technique used to create geringsing fabrics, traditionally taking five years to create, and an essential textile used in ceremonial dress as it is believed to have extraordinary powers. The logo itself is a lotus flower, the symbol of beauty, prosperity and fertility, and highly respected in Bali. The 18 petals represent the Balinese philosophy of Tri Hita Karana – the three causes of prosperity: harmonious relationships between people, the environment and God.

    2. Store Façade

    The store’s façade is created with locally made red bricks in the shape of half circles to create the illusion of the many waves found on Bali’s famous beaches. The exterior appears to move to passersby on Sunset Boulevard as they drive past the storefront, and combines modern building techniques with traditional Balinese architecture for an east-meets-west design. The design is carried into the interior of the store at the core bar where baristas handcraft favorite Starbucks beverages.

    3. Micro-Plot of Arabica Coffee Trees

    Upon entering the space, customers are invited into a micro-plot of Arabica coffee trees. This 1,000 sq. ft. plot will be a working, coffee producing farm cherrying during harvest season in the region, typically in the early springtime, and mirrors the size of 90 percent of all coffee farms in Indoneisa.

    4. Hand-Carved Wooden Mural

    As customers enter the café, their eyes are immediately drawn to the unique artwork filling the store. A 30-foot tall hand-carved wooden mural from Jepara features a depiction of the history of coffee in Indonesia, from the coffee growing regions of Java, Sulawesi, Bali, West Papua, Brastagi and North Sumatra, home to Starbucks Indonesia Farmer Support Center. Over the Reserve bar, customers eyes are drawn up to the bamboo installation inspired by the smoke, steam and vapor that create the familiar aroma of coffee. Both expansive pieces were created by Indonesian art agency, Atrovale, while two Jakarta-based artists, Janet Jane and Jamal M. Aziz, created pieces to highlight the store’s moments of discovery. Janet’s macramé art was inspired by the lush landscapes of Indonesian coffee farms, while Jamal’s two murals illustrate the first-ten-feet of the coffee bean’s journey at origin.

    5. Hand-Carved Stone Tiles

    In the Reserve Bar, hand-carved stone tiles create the ornate floor and wall design. The traditional, local craft found across Bali was reimagined into patterns which reflect a modern interpretation of coffee flowers and coffee beans.

    6. Living Wall

    To the left of the entrance, customers are invited to Starbucks core bar featuring a living wall filled with flora from the region. The botanicals are arranged in the form of Bali’s signature gapura, split gates, a symbol to welcome guests into our stores. This living wall is set back behind the bar where Starbucks partners will enter the café to connect with customers and handcraft their favorite Starbucks beverages.

    7. Clay Pots

    Around the store, customers will be enchanted by the surrounding flora, bringing the unique Indonesian environment inside. Trees throughout the space are planted in beautiful clay pots inspired by a traditional Sumatran pattern and the Starbucks Siren. Motifs of Indonesia’s mountainous terrain and coffee beans remind customers of the unique surroundings found only in Indonesia.

    8. Coffee Seedling Nursery

    On the second floor, customers are invited into the first coffee seedling nursery to be located inside of a Starbucks store. Our partners work with local farmers to take special care of these seedlings and invite customers to help tend to the delicate plants. Inside this greenhouse, customers can touch the first stages of the seed-to-cup journey that brings us our favorite coffee flavors around the world.

    9. Interactive Media Installations

    The experience continues throughout the expansive space where customers can find two interactive media installations to further immerse themselves in the coffee journey. On the first floor, a first-of-its-kind digital wall can be accessed through pressing and twisting various portions of the wall to participate in the planting, processing, roasting, shipping and brewing processed. Above them, customers can hear the stories of Starbucks Farmer Support Center in Indonesia. Two synchronized videos guide visitors through the FSC on walls fashioned from the traditional rattan weavings which inspired the Dewata Bali logo.

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  • Starbucks to open three more Starbucks Reserve in Malaysia

    Starbucks to open three more Starbucks Reserve in Malaysia

    Berjaya Starbucks Coffee Company Sdn Bhd, which opened its eight Starbucks Reserve concept store in Berjaya Times Squar, plans to open two to three more such stores this year. “The reception has been really good for Starbucks Reserve (stores). We hope to be able to have about two or three Reserve (outlets) every year,” Berjaya Food Bhd’s CEO and Starbucks Malaysia and Brunei managing director Sydney Quays said.

    “The Reserve concept store is not something that you can open many because it is very exclusive. The coffees that we have in a Reserve are very exclusive and you don’t get that in other outlets. So it is very critical that we expand carefully and in locations that are very well appreciated,” he added.

    Historically, Quays said the group has always aimed to open 30 stores a year, with investment around RM50 million to RM60 million.

    According to Quays, the investment for a Reserve concept store is 30% higher compared to the non-Reserve concept stores.

    The Starbucks Reserve Berjaya Times Square joins locations at The Garden Mall, Sunway Pyramid, SkyAvenue Genting Highlands, Publika, Desa Parkcity, Four Seasons Place Kuala Lumpur and Paradigm Mall Johor.

    On its outlook, Quays believes the consumer sentiment has improved as a lot of uncertainty is over, and the rising tourists numbers also augurs well for its business.

    Asked whether the sugar tax announced in Budget 2019 will impact its business, Quays said he is of the view that the new tax will not be a big issue for Starbucks Malaysia.

    “Obviously sugar is an add on product for us, but we have not experienced any negativity in that and I don’t think it will affect us very much,” he said, adding that increase in price to its products is unlikely at this point of time.

    Berjaya Starbucks has 282 outlets in the country comprising 42 drive-thru outlets.

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  • Starbucks China sales grow – with a but

    Starbucks China sales grow – with a but

    Net revenues for Starbucks China and Asia-Pacific region soared 45 per cent in the first quarter to US$1.2 billion. While a change of ownership in the East China business at the end of the first quarter of the previous year boosted the figure, the company says the opening of a net 1010 stores during the 12 months – a 13 per cent increase in the network – and a 3 per cent increase in same-store sales also played a part.

    First-quarter Starbucks China operating income rose 13 per cent to US$225.1 million, from $196.8 million. But the company’s operating margin declined 530 basis points to 18 per cent, primarily due to the impact of the East China ownership change.

    CEO Kevin Johnson said the company delivered solid operating results in the first quarter, demonstrating continued momentum in the business, as it drives a growth-at-scale agenda “with focus and discipline”.

    “Comprehensive efforts to streamline our business have allowed us to focus on three key strategic initiatives that position Starbucks for long-term success: accelerating growth in our targeted markets of the US and China, expanding the global reach of the Starbucks brand through our Global Coffee Alliance with Nestle, and increasing shareholder returns.

    “Combined with our efforts to build and amplify the Starbucks brand, we expect these initiatives will position the company to drive predictable, sustainable growth and shareholder returns for years to come,” concluded Johnson.

    In the 13-week first quarter, which ended December 30, global comparable-store sales increased 4 per cent, driven by a 3 per cent increase in the average sale. Americas and US comparable-store sales increased 4 per cent, with transaction numbers flat.

    China-Asia-Pacific comparable-store sales increased 3 per cent, including 1 per cent transaction growth, with China comparable-store sales up 1 per cent, but the number of transactions down 2 per cent.

  • Freshly brewed coffee is rising in China

    Freshly brewed coffee is rising in China

    Although Luckin Coffee, a chain of coffee shops in China,  disclosed a loss of 857 million yuan (RMB) last year, they are still positive about the potential for growth in China. Meanwhile, a Canadian coffee brand, Tim Hortons, announced its expansion into the country, planing to open more than 1,500 stores in China in ten years.

    Convenience store’s brewed coffee stand out in a crowded market

    Coffee brand giants are everywhere, but  coffee sales from convenience store never falls behind, occupying the lower level consumer market. According to the FamilyMart Co., Ltd., there are more than 2,000 stores in the country now selling freshly brewed coffee and the annual revenue in 2018 has exceeded 50 million cups. FamilyMart  revealed that their goal is to sell 100 million cups of coffee in 2019.

    Food plus coffee combo drives sales

    Another profitable coffee sales business people usually neglected is the Western-style fast food restaurant. Since KFC, also known as Kentucky Fried Chicken, upgraded the coffee products in 2015, their coffee sales has grown rapidly. In the first three quarters of 2018, KFC sold more than 63 million cups of coffee at an average rate of 2.5 cups per second.

    “The growth of coffee market among convenience store and western restaurant reflects the characteristics of current Chinese coffee market, a market with multi-level, multi-channel and multi-consumer profile.” China food industry analyst Zhu Danpeng said that this also proves the Chinese coffee market still have a big room to invest and develop.

    The current high profit of the coffee industry leads to competition

    Some industry consulting companies predict that the sales of the Chinese coffee shop will grow at a compound annual growth rate of 15% from 2017 to 2025, and will reach more than 100 billion yuan (RMB) by 2025. The number of coffee shops in China is expected to reach more than 80 thousand in the near future.

    However, the competition between freshly ground coffee market cannot be avoided. Zhu believes that one of the fundamental reasons for tight competition is that the profit of the this particular beverage industry is extremely high.

    Recently, Zhu went to Yunnan for site visit and he communicated with the local farmers. He said that the coffee bean purchase price of the famous coffee brand is about 12-16 yuan/kg, which can be used to brew 10-12 cups of coffee. In other words, the cost of coffee beans is less than 2 yuan (RMB) per cup. “It is obvious that the gross profit of this industry has reached several hundred percent.”

     

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  • Starbucks India showcases coffee craft and innovation with ‘Starbucks Barista Pride’

    Starbucks India showcases coffee craft and innovation with ‘Starbucks Barista Pride’

    Starbucks is taking beverage innovation to new heights with the simultaneous launch of 134 new, crafted beverages. Delivering on the iconic ‘Third Place’ experience, while strengthening commitment to innovation and coffee passion, the global coffee chain has introduced a new initiative called Starbucks Barista Pride where baristas from each Starbucks store will feature a beverage unique to their store, conceptualized and created by themselves.

    Till the end of February, all Starbucks stores across India will serve a specially curated beverage, enabling customers to ‘coffee hop’ and try 134 unique beverages across the 134 Starbucks stores in India.

    Based on the idea of customization and personalization, while celebrating the heart and soul of the signature Starbucks Experience, Starbucks Barista Pride is here to showcase the talent and innovation the Starbucks baristas have to offer.

    The wide range of unique beverages includes Turkish Espresso Praline available at the Chapel Road store in Mumbai, Chai White Chocolate Mocha available at the Vega Mall store in Bangalore and Winter Chocolate Cream available at the DLF Hub store in Delhi.

    “Starbucks is committed to delivering an unparalleled, unique experience for every customer. We are delighted to introduce ‘Starbucks Barista Pride’- a new coffee forward initiative which highlights the exemplary coffee skills of our Starbucks baristas and brings to our customers a wide range of artisanal beverages. At Starbucks, we believe in celebrating each customer’s individual coffee preference and profile. For us each cup of coffee is unique and especially suited to the coffee palette of our customer. With a deep understanding of coffee, our Starbucks baristas personalize each cup to perfection,” said Veetika Deoras, Head – Marketing, Category, Digital and Loyalty at Tata Starbucks Pvt. Ltd.

    “We are humbled to lead specialty coffee in India and initiatives like Starbucks Barista Pride are a tribute to our customers and reflect the Starbucks 47-year legacy of sourcing, roasting and serving world’s top Arabica coffee,” she added.

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  • Coffee exports jump for Korean firm

    Coffee exports jump for Korean firm

    Namyang Dairy Products said Friday its coffee exports jumped more than 20 percent in 2018 on market diversification and the rising popularity of Korean pop culture abroad. Overseas shipments of its freeze-dried coffee and instant coffee products totaled 36 billion won ($32 million) last year, compared with 28 billion won a year earlier.

    Exports of freeze-dried coffee totaled 2,000 tons last year, compared with 1,500 tons a year earlier. The value rose to 30 billion won from 23 billion won. The company also exported 50 million instant coffee mixes, up from 40 million the previous year.

    A company official attributed the export jump to its development of premium products as well as the overseas popularity of Korean pop culture.

    Namyang Dairy Products said it will ramp up efforts to diversify its export markets to Europe. Last year, Korea’s overall exports of coffee products came to 75,100 tons, up slightly from 75,000 tons a year earlier.

    Meanwhile, Korea’s exports of milk powder surged to 32.5 billion won last year from 26 billion won a year earlier.

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  • Luckin, Starbucks rivalry heats up

    Luckin, Starbucks rivalry heats up

    Luckin vs Starbucks: baristas and technology are engaged in a gigantic battle for Chinese coffee drinkers’ loyalty. Seattle, Washington-based Starbucks Corporation has been the indisputable market leader in the Chinese coffee industry ever since its Beijing World Trade Center branch opened its doors in January 1999. Yet Starbucks’ two decades of coffee dominance in China appears to be reaching its end.

    While “China watchers” and retail industry insiders have been expressing concerns about Starbucks for months, it has taken Wall Street a few months to catch on; just last week, Goldman Sachs downgraded the Starbucks stock from “buy” to “neutral” for the first time in recent memory, specifically citing Starbucks’ bleak business trajectory in China as a major concern.

    Most of this concern is linked to Luckin Coffee 瑞幸咖啡 Ruixing Kafei, the young tech-forward coffee startup that has managed to build more than 2000 outlets throughout 30 mainland cities in just about 14 months of operations, reaching startup “unicorn status” seemingly overnight.

    While China is Starbucks’ largest market after the US, with roughly 3600 stores across 150 cities, it took Starbucks nearly 13 years to achieve Luckin’s current size. Perhaps even more shocking, Luckin is showing absolutely no signs of slowing down any time soon; the Luckin team has publicly announced its goal of reaching 4500 outlets across China by the end of 2019, and as of November, Luckin Coffee’s overall value was estimated to be about US$2 billion, a figure that has almost certainly risen since.

    Luckin is clearly trying to develop a mass-market coffee product that can bring the “coffee shop experience” to the working class at an ultra-competitive price point.

    While its early success may seem unfathomable, it mostly comes down to three distinct points of difference within its business model: the Luckin app, delivery infrastructure, and competitive pricing. For outsiders visiting China or first-time Luckin customers, the most noticeable quirk of Luckin’s business model is that customers are forced to use the Luckin app to purchase a coffee in a Luckin store or have Luckin coffee delivered to their office or home. Luckin does not accept cash payments at all: there are no tills inside Luckin stores. Fortunately, Luckin offers new users a free beverage after their first download, to lessen the pain a little. While this may seem perplexing to many outsiders, this is a feature that distinctly appeals to an increasingly app-focused Chinese consumer base who prefer digital payments to cash.

    Tensions rising

    With tensions rising between China and the US, Luckin has another unique competitive advantage: its status as a truly Chinese coffee brand, owned by Chinese people and tailored specifically to the unique tastes of the Chinese market. If these tensions continue to grow worse, one can expect Luckin to follow the trend of many other Chinese companies by appealing directly to this patriotic sentiment and further distancing itself from the distinctly American image of Starbucks.

    With Luckin’s CEO Jenny Qian Zhiya and most of its senior leadership coming directly from UCAR, a ride-hailing service spun out of rental car giant Car Inc, it should come as no surprise that transportation and delivery are two key focus points of the business. With the exception of a few sit-down locations in hot real estate areas, the vast majority of Luckin Coffee locations do not offer customers a place to sit. While many locations have space for customers to wait in line and pick up drinks, roughly half of Luckin stores are “preparation stores” that focus solely on preparing beverages for the endless queue of Luckin delivery drivers. Thanks to this elaborate and effective delivery system, customers can usually expect to get their coffee quickly; Luckin claims the average delivery time is roughly 18 minutes, (and even during the busy morning hours in my Beijing office park, I never had to wait longer than 30 minutes). With young Chinese city-dwellers becoming more and more reliant on delivery services like Ele.me and Meituan Waimai, Luckin’s impressive delivery capabilities allow the company to remain convenient and attractive. As a side benefit, this store setup also allows Luckin to place most of its shops in cheaper out-of-the-way locations with limited foot traffic, allowing for significant real estate savings.

    Price the differentiator

    Perhaps the most important point of differentiation between Luckin and Starbucks is price.

    While Starbucks generally charges at least 35 RMB (US$5) for most of its coffee drinks, Luckin’s prices generally fall in the 20 to 25 RMB range, with only a 6 RMB surcharge for delivery.

    Luckin also regularly runs promotions that bring the price per cup down to as little as 10 RMB, prices no competitor has been willing to match. While the exact price of a Luckin coffee fluctuates dramatically due to promotions, customers can generally expect to pay 30-40 per cent less than they would pay for a similar drink at Starbucks. Perhaps even more appealing, Luckin’s widely used “refer a friend” system rewards users who convince their friends to download the Luckin app with a free beverage.

    These three aspects of Luckin’s business platform have clearly caught on with young Chinese customers and urban office workers, who are increasingly looking for cheaper and more convenient coffee options. It appears that Starbucks ultimately has little chance of competing with Luckin in this lower end of the market. While Starbucks does have an app developed for the Chinese market, it is not nearly as intuitive or eye-catching as Luckin’s well-developed system. Similarly, after Starbucks failed to catch the wave of China’s food-delivery boom, it may be too late for Starbucks to substantially overhaul its delivery capabilities. Starbucks did not implement its own internal delivery service until August last year, arguably three years too late.

    Until last summer, Chinese customers have been forced to improvise their own “hacked” Starbucks deliveries through the app Ele.me; those wanting Starbucks coffee had to use an unwieldy two-step process using two separate apps to get their drinks delivered.

    While Starbucks could use its resources to develop a more effective app and more efficient delivery system for the Chinese market, it is likely too little, too late; after ignoring these two major trends in Chinese retail over the past few years, Starbucks is already considered an inconvenient option by rushed coffee customers, an image that will prove hard to shake off. And after spending nearly two decades cultivating the company’s image as a high-end aspirational brand for the emerging Chinese middle class, it is unlikely Starbucks can drop its prices enough to compete with Luckin’s promotional pricing.

    Going high

    Ultimately, it seems Starbucks has no choice but to “go high” in this market. While Luckin has already cemented itself as the most popular option among working-class coffee drinkers looking for an everyday beverage option, the startup has yet to grab the attention of the more status-driven higher end of the coffee market. As many industry insiders have pointed out, Luckin’s “take-and-go” model and delivery focus does not offer customers the high-end experience of whiling away an afternoon sitting at a coffee shop. So while Starbucks executives certainly have significant reason to be concerned over their dwindling market share, Starbucks still maintains a solid grasp on the market for customers seeking a true coffee experience, rather than just caffeine boost to get them through the day.

    This split in the market has been happening naturally, and is quite apparent: if you visit a Luckin outlet in any tier-one Chinese city, you will most likely encounter either a delivery man holding several bags to be delivered or a young office worker making the coffee run for his or her office, taking 10 or 20 cups back up to the office. Meanwhile, the most common sight at an urban Starbucks location is a store filled with tables, each crammed with Chinese millennials or parent groups chatting the afternoon away. In a sense, this harkens back to the ethos of the company’s original entry into China in the late 1990’s: Starbucks built its business in China by providing customers with第三空间 di san kong jian, a “third place” between home and work that functioned as a public conference room or a relaxing respite from the busy world outside, an important societal role that was traditionally satisfied by China’s ancient tea house culture. As Gwynn Guilford, reporter for Quartz, puts it: “In China, Starbucks doesn’t sell coffee to make its millions… it rents couches.”

    If the statistics are to be believed, there is certainly space in the market for both companies; Chinese citizens drink just four to six cups of coffee per year on average, compared to 250 among British residents and 360 for Americans. While Starbucks will likely continue to face struggles as the company redefines its hold in the Chinese market, this year we will see how Luckin Coffee’s unique business model fares – will Luckin continue to set record-breaking growth numbers, or will it shatter before showing any profit?

    –Hunter White-

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