Starbucks Expands in Japan and U.K.

by Zacks Equity Research - 15/07/2010

"Starbucks Corp announced the launch of two new innovative quick-brew products to expand the coffee giant's presence in grocery stores in the U.K. and Japan."

With the launch of Starbucks ORIGAMI Personal Drip coffee — the first-ever Starbucks single-use drip coffee product — the company will sell coffee products outside its retail stores for the first time in Japan. The Starbucks VIA Ready Brew coffee will also make its debut in the U.K. grocery arena.

Starbucks VIA Ready Brew Coffee Debuts in the U.K. Grocery Stores

Following the positive response to Starbucks VIA Ready Brew coffee in the Starbucks retail stores, the company will sell the product in U.K’s largest supermarket chain, Tesco. With Sainsbury’s, Waitrose and other major retailers following suit later this year, the product will be sold across more than 2,000 grocery stores across the U.K. To secure the grocery retail distribution of the product, Starbucks has joined hands with R.H. Amar & Co. Ltd., the leading importer and national distributor of fine foods in the U.K.

Starbucks VIA will be sold in Tesco in single-serve packets in boxes of 3 or 7. It is available in both Starbucks Italian Roast and Starbucks Colombia and its recommended retail price is a respective £1.39 ($2.10) and £2.99 ($4.53). A decaf Italian Roast variety will be available in the 7-pack and will retail at £3.49 ($5.29).

Starbucks took nearly 20 years to develop Starbucks VIA and, through the product, it aims to provide an instant coffee that tastes like its fresh filter coffee for coffee aficionados who also seek convenience. VIA had been under trial for a year before Starbucks introduced it nationwide. The customer response had been overwhelming and Starbucks expects a similar response now that customers can also purchase the product in grocery stores.

Starbucks whole bean coffees have been available in grocery stores across the U.K. since 2006, and Starbucks Discoveries chilled coffees and Starbucks Doubleshot espresso drinks were launched in the U.K. in April 2010.

Starbucks ORIGAMI Personal Drip Coffee to be Launched in Japan

Starbucks and Ajinomoto General Foods Inc. announced the upcoming launch of new coffee products this autumn in grocery and convenience stores in Japan. Ajinomoto General Foods Inc. is a 50:50 joint venture of Kraft Foods Inc. (KFT - Analyst Report) and Ajinomoto Co.

Starbucks and Ajinamoto had announced the business agreement to market at-home coffee products in Japanese retail stores in May 2009. Starbucks ORIGAMI Personal Drip coffee and Starbucks VIA Coffee Essence are the first products being launched as part of this collaboration.

Starbucks ORIGAMI Personal Drip coffee is a convenient, single-use, pour-over brewing system that allows customers to brew a cup of Starbucks coffee at home without any special equipment. It will be available in three variants — Starbucks House Blend, Breakfast Blend and Espresso Roast, in grocery and convenience stores in the Kanto area.

In addition, Starbucks VIA Coffee Essence will also be available in grocery and convenience stores. Starbucks VIA Coffee Essence is Starbucks’ first premium soluble coffee stick product in Japan. Launched in Starbucks coffeehouses in Japan, in April 2010, it has become a popular and convenient product for coffee drinkers looking to enjoy Starbucks quality coffee anytime and anywhere. It will be available in Colombia and Italian Roast blends, in grocery and convenience stores in the Kanto area.

Starbucks has a significant presence in the international market. The company’s international division sells coffee and other beverages, complementary food, whole bean coffees, and coffee brewing equipment and merchandise through company-operated retail stores in Canada, the U.K. and several other markets.

The total net revenue at the international segment climbed approximately 23% year over year to $534.2 million in the most recent quarter. Significant international presence has boosted the company’s growth and, we believe, will continue to do the same in the coming years.

Starbucks is the leading roaster and retailer of specialty coffee in the world. The company buys roasts and sells high-quality, whole bean coffees globally. Starbucks’ offerings include fresh, rich-brewed coffees, Italian-style espresso beverages, cold blended beverages, many complementary food items, a selection of premium teas in addition to beverage-related accessories and equipment.

More Details: http://www.zacks.com/stock/news/36854/Starbucks+Expands+in+Japan+and+U.K.