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Marketing 2019-02-19

How Starbucks is Experimenting in different Markets

The new café will offer coffee and tea cocktails crafted by mixologists along with the premium Starbucks Reserve coffees.

By Deputy Features Editor
How Starbucks is Experimenting in different Markets

World’s largest coffee chain Starbucks is experimenting a lot outside USA with different product ranges, quality bakery products, new age café and concepts.

Entering All-Day Dining

The café chain has opened its first Reserve Bakery Café in Shanghai, which will offer made-to-order breakfast, lunch, and baked goods from Princi Bakery, along with weekend brunch. This new format category is Starbucks’s next step to grow its business in China.

“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 in a press statement.

The new café will offer coffee and tea cocktails crafted by mixologists along with the premium Starbucks Reserve coffees.

Hiring Elderly People

The American coffee chain Starbucks on Friday announced the opening of a new cafe in Jalisco, Mexico, which will be exclusively operated by old age staffs. This is the second Starbucks café in the region to hire staffs aged between 52 to 66; the first launched last year in Mexico City.

“We have become the first job experience for 80% of our partners because we believe in them and have designed a personalized career path,” said Diana González, Head HR, Starbucks Mexico.

Starbucks, had partnered with the National Institute for Elderly People five years ago, is aiming to hire 120 senior workers by 2019. The coffee chain has hired 14 workers at the Jalisco outlet.

Coffee Innovation

Known for its innovative beverages and coffee globally, Starbucks is taking beverage innovation to new heights with the launch of 134 new, crafted beverages. Delivering on the iconic ‘Third Place’ experience, while strengthening commitment to innovation and coffee passion, Starbucks has introduced ‘Starbucks Barista Pride’ where baristas from each Starbucks store will feature a beverage unique to their store, conceptualized and created by themselves. “Starbucks is committed to delivering an unparalleled, unique experience for every customer. 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,” shared Veetika Deoras, Head – Marketing, Category, Digital and Loyalty at Tata Starbucks Pvt. Ltd.

All Starbucks store across India will serve a specially curated beverage, enabling customers to ‘coffee hop’ and try 134 unique beverages till the end of February.

Expanding Delivery Network

The global coffee chain is entering delivering in the UK for the first time with millennial customers willing to double the price of their coffee. The coffee chain recently announced that it will begin piloting the coffee-to-your-door service in London at the end of the month in a deal with UberEats.

This will also allow customers to order a hot drink from Starbucks on the UberEats app.

The café chain has made it 95 per cent of its menu available through the app.

The Seattle based café chain is also expanding its delivery in China offering delivery at around 2,000 stores in 30 cities by the end of this year, up from 150 stores at the end of September. Starbucks began working with its Chinese delivery partner, Ele.me, three months ago. "Customer behaviors are shifting rapidly," shared Kevin Johnson, CEO, Starbucks to The Associated Press. "We must continue to adapt and adapt rapidly to meet our customers where they are,” he added.

Partnering with Nestle for Retailing Coffee

FMCG major Nestlé has launched a new range of coffee products under the Starbucks brand, after the FMCG major sealed a licensing deal with the coffee giant in August 2018. The new range consists of whole bean and roast coffee grounds, as well as Starbucks capsules developed using Nespresso and Nescafé Dolce Gusto proprietary coffee and system technologies.

Nestlé will roll out these products in several markets across Asia, Europe, Latin America, Middle East and the US in grocery stores and major online platforms.

Taking the Vegan Root

Starbucks Portugal has increased vegan food options, adding vegan cakes and plant-based sandwiches to its menu. The new plant-based sandwiches feature ciabatta bread with seasoned pumpkin, sweet cranberries, fresh vegetables, and dairy-free chipotle sauce.

Starbucks Portugal’s has also included its kombucha drinks, fruit and vegetable smoothies, and fruit salads to the menu apart from dairy-free almond, soy, and oat milk.

Expanding Stores

The global coffee chain is expected to break even by the end of FY19, after more than six years of opening its first store, here in India.Tata Starbucks, the joint venture between Starbucks global and the Tata Group, is aiming to achieve break even by FY20.

“The break even is expected for FY 19-20. India, while it presents a tremendous amount of opportunity there are also challenges, “said Navin Gurnaney, CEO, Tata Starbucks.

The coffee chain is also planning to open around 144 stores in India by this fiscal.

Currently, the coffee chain is operating 136 stores in the country and will finish this year at 144 stores, with additional outlets in the future.

Gurnaney, who took charge last month after replacing Sumitro Ghosh said that the growth is always on their mind.  “We have seen that in other Asia Pacific markets, once the market approaches the USD 2000 per capita income point, then it is almost a recognized point of inflection. That’s where the consumption really takes off. It’s a big pie and there is room for everybody to grow,” he added.

Experimenting with Big Formats

The coffee chain is opening its biggest Roastery in the world in Tokyo. Roasteries are large, lavish Starbucks stores that feature specialty coffees and teas, on-premise roasters and massive coffee casks where freshly roasted beans are held.

The cafe will be spread across 32,000-square-foot and will be open to the public on Thursday morning. After Tokyo, Starbucks plans to open one more Roastery, in Chicago.
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