Bloomberg News

Starbucks to Introduce Verismo Brewers in China Next Year

April 19, 2012

A Starbucks in Beijing's Forbidden City. Photographer: Teh Eng Koon/AFP/Getty Images

A Starbucks in Beijing's Forbidden City. Photographer: Teh Eng Koon/AFP/Getty Images

Starbucks Corp. (SBUX:US), the world’s largest coffee-shop operator, will introduce instant dairy products worldwide and bring its Verismo single-serve brewer to China next year as it triples stores in the Asian nation.

Verismo could be a “compelling business proposition to Starbucks in China,” Chief Executive Officer Howard Schultz said in an interview yesterday in Shanghai. Starbucks in March said it will start selling the Verismo, a machine to make brewed coffee and espresso-based beverages, in the U.S. this year.

Starbucks, based in Seattle, plans to triple outlets to more than 1,500 by 2015 in China as part of the company’s plan to grow outside the U.S. and win more coffee drinkers in the world’s most-populous nation. Single-serve beverages are the coffee industry’s fastest-growing segment, according to Mitch Pinheiro, an analyst at Janney Montgomery Scott LLC in Philadelphia.

“We are very intrigued with the possibility of bringing that to China in 2013,” Schultz said, referring to the Verismo. “And looking very closely on how and when we will do that within our stores.”

China’s coffee shop market is forecast to surge 55 percent to 4.5 billion yuan ($714 million) in 2015 from 2.9 billion yuan last year, data from Euromonitor International show.

Coffee Consumption

Global coffee consumption will grow about 1.5 percent this year and the increase in demand will be driven by countries including Russia, China, Indonesia, India and coffee-producing countries, according to the International Coffee Organization.

The new dairy products which will be sold globally within a year will add to the company (SBUX:US)’s Via instant beverage line, Schultz said, without elaborating.

“We are going to bring tremendous innovation to the dairy category within Via,” he said. “It’ll be fresh dairy done in a way that no one has done before.”

Via is now a $300 million business globally, Schultz said.

In 2009, Schultz introduced Via, a single-serve instant coffee that took 20 years to develop.

Schultz has said Via eventually will become a billion- dollar brand. The company began selling Via instant coffee in China, Hong Kong, Macau and Taiwan in April 2011.

The company (SBUX:US) also plans to introduce Refreshers, energy drinks made with fruit juice and green-coffee extract, in China this summer, Schultz said. The product is already selling well in the U.S., he said.

Starbucks dominated China’s coffee shop market with a 66.3 percent share in 2010, according to Euromonitor. Whitbread Plc (WTB), owner of the Costa Coffee chain, and McDonald’s Corp. trailed with 8.9 percent and 8 percent shares in 2010 respectively, according to the London-based researcher.

Last year Starbucks signed an agreement to form a joint venture with Chinese coffee operator Ai Ni Group to purchase and export high-quality arabica Yunnan coffee. Starbucks plans to sell Yunnan-made coffee globally in two to four years, Schultz said.

To contact Bloomberg News staff for this story: Michael Wei in Shanghai at mwei13@bloomberg.net; Margaret Conley in Shanghai at mconley3@bloomberg.net

To contact the editor responsible for this story: Stephanie Wong at swong139@bloomberg.net


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  • SBUX
    (Starbucks Corp)
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