Opportunity in the Asian Market

Alain Poncelet, Starbucks Coffee Company

2007 Starbucks Coffee Company.

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Agenda

X Coffee Trends in Asia

X Starbucks Consumer Trends
X Outlook for the Region
X CSR and Asia

Coffee Trends in Asia

Asia Pacific - Growth in Specialty

Coffee Stores
(Source: Euromonitor International - 2007)
18000
16000

Units/Outlets

14000
12000
10000
8000
6000
4000
2000
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

1999: Starbucks Store Count < 200

Today: Starbucks Store Count 1,831

(Q1-FY 07)

Retail Sales Value of Coffee

(Compound Annual Growth Rate Comparison)
11.3%

China
Hong Kong, China
India
Indonesia
Japan
M alaysia
Philippines
Singapore
South Korea
Taiwan

2.6%

10.7%

4.6%
1.5%
1.9%
7.2%

9.6%

3.4%

CAGR 2000-05
CAGR 2005-10

6.4%

3.3%

11.2%
3.1%
5.4%

3.6%

5.8%
6.7%
9.1%
7.8%

Vietnam

Source: Euromonitor International

6.3%

0.6%

Thailand

Total

12.1%

2.7%
4.2%

10.0%
17.1%

Multiple Factors Driving Change in

Emerging Asian Markets

Lifestyle
Binjian, Shanghai

Multiple Factors Driving Change in

Emerging Asian Markets (cont.)

Retail
Hefei Shanxiaokou (

Chongqing Metro Plaza

Multiple Factors Driving Change in

Emerging Asian Markets (cont.)

Economics/Demographics
Government

Qingdao Hisense (

Xi Hu Tian Di
Hangzhou, Zhejiang

Starbucks Consumer Trends

Consumer Trends
Sales mix, store use and value perceptions
continue to shift over time.

Sweet/Creamy
Drinks
Hip Trendy
High Price

Exploration into Drip

Coffee / Whole Bean
Regular Visits
Value Perceived

Japan (market entry 1996)

RTD Japan

X $10+ billion industry

Taiwan (market entry 1998)

China (N. China market entry 1999, overall an early market)

Outlook for the Region

The Brand Travels Asia Pacific

Thailand

China

Korea

Japan

China

Asia Pacific: A Brief History

1996: 2 countries
2000: 9 countries
2007: 11 countries

Starbucks Asia Pacific Vision

10,000

1,831

Asia Pacific

Today:
Future:

1,831 Asia Pacific Stores

at least 10,000 Stores

(Q1(Q1-FY 07)

Asia Breakdown Today

Starbucks Store Counts

Japan, 665

Singapore, 42
Philippines, 106

Malaysia, 79
Thailand, 91
Hong
Kong/Macau,
Taiwan, 189
75

(Q1(Q1-FY
FY07)

Indonesia, 48
South Korea,
187
China, 213

CSR and Asia

The success of the farmers with
whom we do business and the
communities that we operate in
are critical components of our
success.

An Integrated Approach
X Investing in Social Development Projects
X Farmer Support Center for Technical Support and
X
X
X
X

Training
Buying Conservation & Certified Coffees for
Environmental and Economic Stability
Encouraging Coffee and Farmer Equity Practices
(C.A.F.E. Practices)
Providing Farmers Access to Affordable Credit
Paying Premium Prices to Help Farmers Profit

Muan Jai
X Launch Muan Jai Blend

X Integrated Tribal

Development Project

 We are in the people business

serving coffee

Lwyss@starbucks.com