Starbucks Corp in Consumer Foodservice World-1

STARBUCKS CORP IN CONSUMER FOODSERVICE
(WORLD)
September 2014
SCOPE OF THE REPORT
Scope
1
All values expressed in this report are in US dollar terms,
2
using2013
a fixed
exchange
rate (2013).
figures
are based
on part-year estimates.
All forecast data are expressed in constant terms;

inflationary effects are discounted. Conversely, all historical
data are expressed in current terms; inflationary effects are
taken into account.
C
on
su
m
er
Fo
od
se
rvi
ce
Disclaimer
Cafs/Bars
Specialist
Coffee Shops
Much of the information in

this briefing is of a statistical
nature and, while every
attempt has been made to
ensure accuracy and
reliability, Euromonitor
International cannot be held
responsible for omissions or
errors.
Figures in tables and
analyses are calculated from
unrounded data and may not
sum. Analyses found in the
briefings may not totally
reflect the companies
opinions, reader discretion is
advised.
Starbucks enjoyed
positive results in 2013
and early 2014, based on
strong momentum in the
US and organic growth in
major emerging markets.
The company continues
to explore diversification
into new categories
including tea, bakery goods, and even dairy products, on a path towards becoming a
Western Europe and
global consumer brand rather than solely a coffee purveyor. Moving forward,
renewing its focus on
Starbucks is looking to new markets in Latin America, strengthening its position in
China.
CONSUMER FOODSERVICE: STARBUCKS CORP

Euromonitor
PASSPORT 2
International
STRATEGIC EVALUATION
COMPETITIVE POSITIONING
MARKET ASSESSMENT
GEOGRAPHIC AND CATEGORY
OPPORTUNITIES
RECOMMENDATIONS
Key company facts
million US$
US$
million
1
alist
St
arbucks
leads
the
coffee
global
speciali
st
coffee
shops
categor
y,
with
a
value
share
of
40%
in
2013,
signific
antly
ahead
of
Starb shops
Whitbre
ad
Plcs
Costa
Coffee
ucks World CFS value
(4%)share
and
Corp 2013:
McDonal
ds
Head World CFS value growth
McCaf
quarte 2012-2013:
(3%).
rs:
2 Corp: Total Revenues vs
Starbucks
Star
buckss
Seattl
largest
16,000
presence
e,
is
in(63%
the
14,000
US
of
sales
WA,
in
2013),
12,000
but
the
USA
company
10,000
has
also
establish
ed
a
8,000
Regio
strong
internatio
6,000
nal
nal
presence
4,000
.Starbuck
involv
sspecialist
leads
2,000
ement
coffee
0
shops
:
five
outinof
seven
world
regions
and
in 54
30
Global
of
the
markets
research
ed
by
Categ
Euromoni
tor
ory Source:
Internatio
Starbucks
nal.
involv Annual Report 3
Star
ement
bucks
is
working
:
to
establish
itself
as a
global
consume
Speci
rbrand,
goods
with
inter
ests
outsi
de
resta
urant
sand,
more
rece
ntly,
outsi
de
coffe
e.
Whil
e
coffe
e
rema
ins
its
core
prod
uct
and
ident
ity,
the
com
pany
has
expa
nded
into
tea,
carb
onat
es,
ener
gy
drink
s,
prem
ium
juice,
bake
ry
good
sand
even
bran
ded
Gree
kyogh
urt.
pany
experien
ced a
12%
increase
in total
revenue
to reach
US$14.9
billion.
Still,
Starbuck
s
operated
at a loss
of
US$325
million
due to a
pre-tax
charge
of
US$2.8
billion
that the
company
owed to
Kraft
Foods
after
ending
their
distributi
on
4
2 agreeme
013 nt.
was
a
stron
g
year
for
Star
buck
s as
the
com
Euromo C E:
PASSPORT 4
nitor
OSTARB
Internati UCKS
onal
CORP
Strength continues in 2014

1
Starbuckss
in 2013
was the
result
of a US$2.8 end
billion
to Kraft
Foods Global, to settle a
dispute
stemming operating
from 2010loss
when
Starbucks
chose
to prematurely
anpayment
agreement
that allowed
Kraft to distribute Starbuckss packaged coffee to grocery retailers. Without the charge, Starbuckss
operating income would have increased by 23% in 2013, reaching US$2,459 million.
Starbuckss momentum continued into the third quarter of 2014, as the company opened 344 net
new outlets. Global traffic grew 6% during the quarter, driven by innovation in core coffee and beverage
portfolios, progress in reinventing the companys food platform, and strong comparable-store sales growth
in all regions. Starbuckss Americas region saw 6% comparable-store sales driven by beverage innovation
and its popular loyalty programme. The EMEA segment, historically one of Starbuckss most challenging
regions, also experienced a 3% increase in comparable-store sales, while China/Asia Pacific (CAP), saw
the highest increase in comparable-store sales, increasing by 7% in Q3.
Starbucks Corp: 2013 Full-Year Results

US$ million
FY2013
Revenues
14,892.2
Starbucks Corp: Interim Q3 2014 Results
FY2012 Y-o-y growth US$ million

13,299.5
12%
Year to
Year to
date 29
date 30
June 2014 June 2014
Y-o-y
growth
Revenues
4,153.7
3,735.3
11%
Operating
income
(325.4)
1,997.4
(116%) Operating
income
768.5
615.2
25%
Operating
margin
-2.1%
15.0%
(1,710 bps) Operating

margin
18.5%
16.5%
200 bps
Euromonitor International
STARBUCKS CORP
CONSUMER FOODSERVICE:
PASSPORT 5
SWOT: Starbucks Corp
STRENGTHS
WEAKNESSES
S has
tr
established a
o
n
strong social
g
di media
gi
t
al presence,
p
allowing it to
r
e
connect to its
s
e
key customer
n
c
base and
e
strengthen
brand loyalty
S
t
outside stores
a
r
and between
b
u
visits.
c
k
s
First-mover
advantage
The company
has been the first
chained specialist
coffee shop
operator in many
markets and
continues to benefit
from its first-mover
advantage.
OPPORTUNITI
Chin
a
Chi
na
pres
ents
a
maj
Ch
an
nel
de
vel
op
me
nt
Be
yo
nd
co
ns
um
er
foods
ervi
ce,
Star
buc
ks
has
sign
ifica
nt
Euro
ES
reve
nue
buildi
ng
oppo
rtunit
ies
on
groc
monitor I
n
ery t
store
shelv
es.
Such
sales
would
also
streng
Domestic bias
63% of
global
Starbucks
outlets are
located in the
US, a mature
and highly
competitive
market in
which longterm
opportunities
are growing
increasingly
limited.
Weakness in
UK
against local
leader Costa
Coffee.
Starbuckss
performance
has been
comparatively
weak in the
UK, a major
international
market. Its
share has
been in
steady
decline as it
struggles
T
H
ust
breakf
ast
and
parts
of
Latin
platfor
ms
and
Amer
ica.
As
the
mark
et
reas
onab
le-quality
matures,
so too will the
coffee at
lower prices.
competitive
landscape.
Key strategic challenges and objectives

Improving
New focus on one-of- positioning in
a-kind experiences Western Europe
Despite being a
Starbucks has
chain of 20,500
outlets, Starbucks is long struggled
attempting to prove it with low margins
can still offer one-of- and slow growth
a-kind experiences.
in Western
The chain has
Europe. In the
launched concept
stores in key markets, UK, the regions
with unique
largest market
architecture and
for specialist
aesthetics tailored to
local market
coffee shops,
preferences.
the brand has
Starbuckss The Bank lost three
store in Amsterdam,
percentage
points of share
housed in a historic
since 2008. That
bank vault, includes
art made from bicycle said, turnaround
parts, pastries baked efforts are
beginning to bear
in-store and a focus
fruit. The UK saw
on slow brewing
its first
methods.
comparable-store
categorie
Diversificatio s
n into new
In
2013,
Starbuck
ss
global
sales increase in
six quarters in
2013, and
Starbucks
believes its 2pronged strategy
of localisation
and concept
stores will
improve its
appeal and
public
perception.
story
was all
about
categori
es other
than
coffee.
The
company is
pushing its
image as a
global
beverage
brand,
entering into
such
categories as
hand-crafted
sodas,
energy drinks
and tea in an
effort to find
new growth
and serve
every
drinking
occasion. In
particular,
Starbucks is
leveraging its
Teavana
brand to
increase instore tea
sales,
and its
Evolution
Fresh
brand to
expand
its
presence
on
grocery
store
shelves.
Euromoni
tor
Internatio
nal
expansio
n in key
growth
markets
Coffee,
however,
remains
the
bedrock
of the
company
s
business
plan and
the
majority
of
annual
revenue
s.
Starbuck
Internatio CONSU
nal
MER
FOODS
ERVICE:CORP
STARBU
CKS
Latin
America
n
markets
such as
Colombi
a.
There,
Starbuc
ks faces
the
challeng
e of
selling
Latin
America
n coffee
back to
Latin
America
ns,
taking
on local
chains
in the
process.
PASSPORT 7
experience can set the brand

apart, especially in markets
with many similar (and local)
competitors.
Starbucks
success factors
A unique Starbucks
s is
looking
to
expand
more
aggressi
vely into
Asia
Pacific,
ramping
up
China
expansi
on and
entering
new
markets
such as
Vietnam
. The
compan
y is also
looking
to
expand
into new
The third place benefit

continues to drive traffic in key
markets, especially those with
a shortage of leisure venues.
An engaging social
media presence has

helped Starbucks gain
traction with young
people and deepen
customer loyalty.
The addition of La
Boulange bakery goods
has helped Starbucks
compete for a wider
variety of dining
occasions. This will be
complemented by a new
lunch programme to be
launched in all US
stores in 2015.
Unique
Similarly, new
beverages and wider
options help the brand
opt-in to the widest variety
of dayparts. Starbucks
hopes to expand its
Starbucks Evening
programme which offers
alcoholic beverages to
1,000 stores.
Expansion into
new consumer
packaged goods has
built new revenue
streams and vertically
integrated outlet supply
chains.
Experien
ce
CPG
Growth
Third Place
Beverage
Diversification
2013
Success
Factors
Social
Media
Expanded
Drinking
Occasions
Euromonitor
International
Improved
Food Offer
CONSUMER FOODSERVICE: STARBUCKS
CORP PASSPORT 8
Operating structure
1
Starbucks
usesAmericas
a 4-segment
operating
structure:
which
includes
outlets
in
the
US,
Canada
and
Latin
America;
EMEA,
including
Europe,
the
Middle
East
and
Africa;
CAP
including
China
and the
rest of Asia The
Pacific;
and
Channel
Development.
latter
segment
comprises
Starbuckss
sales
throughas
the
retailVIA
channel,
under
such
brands
Tazo,
and Starbucks Refreshers.Ready Brew
At the global
level,
over half of
Starbuckss
outlets
are company-owned,
much
lighter
franchising
model
than
most a
major
global
operators.
This
has
allowed
Starbucks
to maintain its operational
control
volatile but
risk.also left it exposed to more
3
In will
international
markets,
licensed
outlets
to
make
up
the
majority
as continue
thestrong
company
takes
advantage
of
local
operating
partnerships;
however,
it
is
also
making
moves
towards
the opposite
extreme
in
key
areas.
Starbucks
acquired
full
ownership
of
its
China
outlets
in
2011
from
what
was
a
joint
venture
partnership
with Maxims
Caterers, absorbing maximum profits
from the key growth market. Similarly,
Starbucks acquired full ownership of
Swiss and Austrian operations in the
same year, and French and Brazilian
operations in fiscal 2010.
Global
Starbucks
Outlets
as at 29
September 2013
Licensed
stores
drove
outlet
expansion
in 2013,
asfor
846
net
licensed
outlets
opened
to
432
company-owned
opened.
However,
companyoperated
stores
remain
Starbuckss
bedrock,
accounting
79% of total net revenues during fiscal
2013.
Americas
CompanyOperated
Americas Licensed
EMEA Company-Operated
Source: Starbucks
Annual Report
EMEA Licensed
CAP Company-Operated
FOODSERVICE: STARBUCKS CORP

PASSPORT 9
CONSUME
R
Moving
beyond CFS
blend
Starbucks Iced
Coffee
RTD coffee with

or without milk
Evolution Fresh
Juice
Nationwide
launch
Starbucks Corp: Evolution

Revenues
Harvest
FY201
3
Americas
CAP
Other Segments
EMEA
Channel Development
New CPG Products 2013-2014

Teavana Oprah
Chai
Spiced black tea

and rooibos
Snack bars and

freeze-dried fruit
likely
to increase
thegrocery-store
years to come.
Indeed,
entry
intointhe
channel
may
even
precede
a coffee
shop
presence,
as was the case
in
Norway
and Finland.
3
1
Starbucks has
been
taking
considerable
steps
to
grow
its packaged
consumer
goods
(CPG)
segment
in recent
years,
which
accounted
for
7% of the
companys overall
revenues in fiscal
2013. This is a
major component
of Starbuckss shift
in strategy towards
becoming not just
a global coffee
chain, but a global
consumer brand,
operating in food,
beverages and
health and
wellness.
In coffee
addition
to packaged
ground
coffee,
RTD
coffee,
Starbucks
alsobeans
has
aand
strong
presence
the
fast-growing
fresh
ground
coffee in
pod
market.
In
North
America,
Starbucks
coffee
pods are available for
the
popular
Keurig
system
(called
K- Green Mountain
Cups) as well as Starbuckss own system
called the Verismo. In 2013, Starbucks
was the second largest brand of K-Cups
in the US with sales of over US$373
million.
Starbuckss other segments

includes revenues from acquired brands,
Teavana, Seattles Best Coffee and
Evolution Fresh, as well as the
companys Digital Ventures business.
Teavana, which was purchased at the
end of 2012, is part of Starbuckss new
focus on increasing tea sales. In Q3
2014, the company reported that tea
accounts for just 9% of US store sales, a
2
Starbucks
is
present
in
the
retail
channel
inmarkets,
close
to number it hopes to increase in the near
20
global
a number which is future.
4
STARBUCKS CORP
PASSPORT 10
And looking beyond coffee
b
e
g
a
n
t
e
s
t
i
n
g
a
n
1
S
t
a
r
b
u
c
k
s
R
e
f
r
e
s
h
e
r
s
a
r
e
ener
gy
drink
s,
that
cont
ain
caffei
ne
from
unro
aste
d
gree
n
coffe
e
bean
s.
1
In
Jun
e
201
4,
Star
buc
ks
laun
che
d
Fizzi
o
Han
dcra
fted
Sod
as
in
thre
e
flav
ours
Spic
Tea
Handcrafted Sodas
1
St
a
r
b
u
c
k
s
ev
eni
ng
me
nu
at
sel
ect
loc
ati
on
s
in
the
US
.
Ite
ms
inc
lud
e
wi
ne,
be
er
an
d
sh
ar
ea
ble
sm
Starbucks Refreshers
EveningsStarbucks
Facing slowing growth and the possibility of future saturation in major markets such as the US, Starbucks
is looking beyond coffee in an attempt to carve out a share of all beverage-based drinking occasions. To
this end, Starbucks experimented with all manner of non-coffee beverages in 2013 and 2014, from alcoholic
drinks to tea and juice.
Phot
Pressed Juice Blends
1
Global health and wellness trends have led to
increasing popularity of tea blends. Starbucks launched
fruit iced teas in the US and abroad, and has expanded its
Teavana offerings.
o
s
u
t
i
o
n
1
Starb
uck
s
Evol
F
r
e
s
h
acqu
isitio
n
mark
ed
its
entra
nce
into
the
g ds.
MARKET ASSESSMENT
OPPORTUNITIES
RECOMMENDATIONS
Outperforming the market (finally)

Starbucks Performance vs Global Specialist Coffee Shops 2008-2013
% value growth
1
5
1
0A
5
0
5
1
0
2008-2009
2009-2010
2010-2011
Global Specialist Coffee Shops
A: Mid-recession troubles: . B
Starbucks tumbles to a
7% value decline in 2009, F
drastically underperforming i
g
the industry due to troubles
h
in its domestic market. The
t
company is able to turn its i
business around relatively n
quickly by closing
g
unprofitable stores, retraining baristas and
t
improving the in-store
h
e
experience.
2011-2012
Starbucks
C: Outperforming in
2012-2013:
Starbucks finally
surpasses global
category growth,
surging to nearly 9%
annual growth in 2012
and 12% growth in
2013.
The companys
momentum stems from
continued improvement
in the US as well as the
first signs of turnaround
in
Western
Europe.
2012-2013
Moves back up in global rankings
remainin
g flat for
In 2013, Starbucks
the entire finally
review
period.
moved back
up in the rankings,
Largest Global Foodservice Operators
2013
2013 %
having dropped
0.7 from fourth
value
Company
Th
largest global foodservice
e
share
operator in 2008 to sixth
glo in
bal
3.4
2012, as
7to
Eleven
p
parent
McDonalds
Seven
10
re
1& I
Yum! Brands Inc
m
Holdi
ngs
ain
and
s
Doctors Associates Inc
Sub
fir
way
ml
pare
Seven & I Holdings Co Ltd
y
nt
1.6
Doctor
Starbucks Corp
0.4
s
Associ
d
Burger King Holdings Inc
ates
o
m
have
i
Wendys Co, The
0.7
surged
n
up the
a
top
10
Dunkin Brands Group Inc
t
ranking
e
s.
d
Darden Restaurants Inc
Starbu
b
cks
y
Corps
Dominos Pizza Inc
f
global
a
share
s
0.7
also
t
increas
ed
in
f
2013
o
from
o
0.6
d
o
0.7
to
p
0.7%
e
after
rato
rs
due
to
mas
sive
glob
al
0.3
catego
ry,
especi
ally in
key
Asia
0.3
opportunities Pacific
in the fast-growing
0.3
m
a
r
k
e
t
s
.
Euromonitor STARBUCKS CORP
International
PASSPORT 14
A firm hold on specialist coffee shops

1
Within
specialist
coffee
shops
(SCS),
Largest Specialist
Starbucks
Coffee Shop Brands remains
remarkably
dominant
worldwide.
2013
Despite
many
global
players
competing
fiercely
share
infor
key
markets
Brand
(US$
million)
(Costa
Coffee
in
the UK,
McCaf
in no
Australia),
coffee
shop
brand
has yet
Starbucks
to
achieve
anything
close
to
Starbuckss
stake.
Costa Coffee
3.3domina
2013.
nce over Indeed,
in
the
the
Doutor Coffee
last
year,
industry
Shop
by nearly Starbuck
ss sales
Coffee Bean two
&
increase
Tea Leaf, The
percen
d
by
tageUS$1.9
Caffe Nero
points,
billion,
thanks
Gloria Jeans
more
to than the
Caff Bene
strong
overall
years
Barnes & Noble
in
2012
2.0
and
McCaf
2
After losing
share for three
consecutive years
between 2009 and
2012, Starbucks
has increased in
8.8
1.1
7.2
0.9
1.6
0.9
10.0
0.8
sales of the second-ranked player, Costa Coffee.
Costa Coffee is UK-based and primarily
concentrated in Western Europe, but has been

pursuing a stronger global presence. The brand is
especially focused on growth in China, now
operating over 300 outlets, and recently gained entry
into Eastern Europe through the acquisition of the
-6.0
0.7
60-unit Coffeeheaven chain.
McCaf is also
pursuing global
expansion,
Angel-in-us
Coffee
244.5
10.0
We
ster
n
Eur
ope
.
Euromo
nitor
Internati M
E
onal
CONSU R
FOODS CKS CORP

ERVICE:
STARBU PASSPORT 15
0.6 adding a
net 515 outlets
in 2013,
Cafs/bars belongs to independents

1
Cafs/bars is a diverse category that comprises a range of beverage-orientated foodservice formats.

As a whole the category remains largely dominated by independent operators, as in cafs and bars/pubs
consumers tend to place a heavy emphasis on service, familiarity and local appeal rather than the
consistency and heavy branding that distinguishes categories such as fast food.
The reverse, however, is true in specialist coffee shops, thanks in large part to the dominant position
of Starbucks, particularly in its domestic US market. In most markets where specialist coffee shops have
seen significant growth, they have done so precisely by offering a more modern alternative to traditional
cafs, or by building caf culture from the ground up in markets where little existed before.
The US is a key example of the latter, which saw the growth of an entirely new category of
foodservice driven by Starbucks in the 1990s. The brand has now driven similar growth worldwide, resulting in
a heavy emphasis in the category towards major chained players.
Cafs/Bars Value Sales by Type 2013 Specialist Coffee Shops Value Sales by
Type 2013
Chains
Independents
STARBUCKS CORP
PASSPORT 16
Specialist coffee shops vs cafs: Whats the difference?
Value share
Cafs and specialist coffee shops share many similarities - an emphasis on coffee being the most
prominent - but they serve very different types of demand. While cafs have a wide selection of both food
and drinks (often including alcohol) and serve primarily eat-in customers, specialist coffee shops are more
modern, coffee-themed outlets with a large variety of coffee types and coffee-related products. Drinks are
typically served on their own or with pastries, biscuits, cakes, or sandwiches, for consumption either on or
off the premises. They also present a modern environment, high-end dcor and an inviting, social
environment. Globally, the cafs category far outsizes that of specialist coffee shops, but a very clear trend
has been evident for over a decade. Caf culture is shifting away from traditional independent and towards
more modern specialist coffee shops, driven by the emergence of chains such as Starbucks and its many
competitors, as well as the popularity of modern caf culture among young people in all manner of global
markets. Modern coffee shops also serve a much wider variety of consumers in markets such as Japan or
Turkey where cafs have traditionally served only men. With this in mind, while Starbucks competes primarily
for specialist coffee shop value, a market with a strong, traditional caf culture can sometimes signal an
opportunity for future coffee shop growth as this evolution of the category continues.
Specialist Coffee Shops vs Cafs: Sales Breakdown by Region 2013
1
0 20%
00
%%
8
0
%
6
0
%
4
0
%
Asia Pacific
Australasia
Eastern Europe
Latin America
Specialist Coffee Shops

Euromonitor International CONSUMER
Middle East and

North America
Africa
Cafs
PASSPORT 17
Western Europe
Strength in North America, Western Europe, Asia Pacific

ce. The company has
40% of global
specialist coffee shops
value sales and more
than 50% in a number
of major markets,
including the US,
China, France and
Spain.
2013 Starbucks Specialist Coffee Shops Ranking:

First
Ranking
Second Third Fourth or below Not
s do not
present
tell the
whole
story of
Starbuck
ss
dominan

Eu
ro
monitor
International
CONSUMER FOODSERVICE: STARBUCKS

CORP PASSPORT 18
Global chains to watch

1
While a handful of markets still account for the lions share of sales, a number of local players have
achieved respectable sales numbers in a very short time. Furthermore, while most are primarily present in a
single market or region, many are starting to expand their reach.
While Starbucks and McDonalds remain dominant, already it would appear the specialist coffee
shops category is taking a different path than, for example, burger fast food, with local players often
competing on an even footing at the market level with major competitors. Such local players have also
been very quick to exploit the growing category, with some cementing their dominant presence in a country
before Starbucks or McCaf can even gain entrance.
Regional Players Find Rapid Growth in Specialist Coffee Shops 2008-2013

%
2013 Sales
Brand
Market
(US$ million)
C
A
Caff Bene
South Korea
299.6
G
R
Angel-in-us
Coffee
South Korea
244.5
Shokoladnitsa Eastern
242.4
Caf Coffee
Day
162.7
Europe
India
R
e
c
e
n
t
s
t
r
a
t
e
g
y
2
0
0
8
2
0
1
3
Achieved rapid
growth through
aggressive
305.3 expansion,
diverse
menu and
promotions;
opened its
first
US
outlet
in
2012.
Experimenting
with drivethrough service
to
34.8 appeal
to
ppali ppali
(hurry)
culture and
increasingly
busy
lifestyles in South Korea.

21.7 Focused on broadening expansion into
smaller markets in Russia and Ukraine.
Appeals to young people with trendy,

Euromonitor
International
social
18.7 branding,
and has
grown an
CONSUMER
FOODSERVICE:
STARBUCKS CORP
entirely
new
kind of coffeedrinking culture
in India.
PASSPORT 19
Competition beyond specialist coffee shops

1
Starbucks competes increasingly against a number of categories, as foodservice operators try to capitalise on the
popularity of premium coffee and on-the-go breakfast consumption.
While the most direct competition stems from specialist coffee shops, fast food competitors also pose
a threat with their strong brand recognition, reputation as a breakfast/snack destination, considerable
pricing power and global presence.
In search of stronger traffic at breakfast and throughout various snacking dayparts, fast food
operators are adding better coffee, stronger value breakfast offerings and more comfortable dcor. This
has led to their continuous evolution towards becoming one-stop locations for good-quality coffee,
breakfast and snacks, which is threatening specialist coffee shops ownership of their hard-earned category
share. This is particularly true in developed markets such as the US and Western Europe, where stagnating
growth in transactions and total foodservice spending is forcing operators to scramble for new ways to find
sales.
4
Bakery within
products fast
food brands
perhaps the
strongest
threat
to Starbucks
as they
already
play
heavily
breakfast
space.are
global
brands
such
as
Dunkin
and
Tim
Hortons
have their the
strongest
presence
inWhile
Northlarge
America,
other
small
chains
such asDonuts
Paris Baguette
and Mister
Donut are very popular in parts of Asia. US players are also working to broaden their reach: Dunkin Donuts
announced a return to the UK in 2013 and Krispy Kreme is moving into Russia.
Starbucks has historically set itself apart from fast food operators by serving speciality coffee and
coffee-based beverages, but the slowdown in the global economy has intensified competition as
consumers seek out better value over a name brand.
Starbucks is combating this by improving food offerings and adding more convenience with drivethroughs and broader outlet expansion. Starbucks has also joined forces with Subway and Burger King via
licensing deals, tapping into fast food growth via an additional revenue stream.
STARBUCKS CORP
PASSPORT 20
MARKET ASSESSMENT
OPPORTUNITIES
RECOMMENDATIONS
MARKET ASSESSMENT
Cafs and bars/pubs lose out to fast food, but coffee shops shine
1
Cafs and bars/pubs were hit hard by the economic downturn, especially in some of the categorys
largest markets in Western Europe, and these effects have lingered for the independent outlets that make
up the majority of both categories. In contrast, however, specialist coffee shops have recovered sharply,
recording the highest CAGR of any major foodservice category over 2008-2013.
Fast food has performed similarly well, benefiting from trade-down traffic from full-service and
even cafs/bars during the recession. The category has since continued attempting to attract
customers from specialist coffee shops with good-quality and low-priced coffee offerings.
These two macro trends are expected to continue, with global cafs/bars losing share to more
modern forms of inexpensive foodservice. Specialist coffee shops is expected to remain the lone point of
healthy growth in beverage-based foodservice, but competition with fast food operators will only continue to
rise.
2
0
0
0
, -50,000
0
0
0
1
5
0
,
0
0
0
3
2
1
0
-1
-2
Full-Service
Restaurants
Fast Food
Street
Stalls/Kiosks
8 200-
CAGR
7
6
5
2 100,000
5
05
,
00
0,
00
0
0
US$ million
Global Foodservice Value Growth by Category 2008-2013
3201
3
-
4
Absolute Value Growth
2008-20

ASSPORT 22
P
MARKET ASSESSMENT
A dichotomy in beverage-based foodservice categories

SW I N N E R
4.4% CAGR (2013-2018)
Juice/Smoothie Bars
3.3% CAGR (2013-2018)
Bars/Pubs
Cafs
-0.1% CAGR (2013-2018)
LOSERS
0.8% CAGR (2013-2018)
just US$2.9 billion in 2008,

juice/smoothie bars was the
S second fastest growing
D category over the review
period. The majority of growth
stemmed from the Middle
East and Africa, where freshsqueezed juice is a common
snack. Smoothies are also
growing in popularity
worldwide due to health
trends.
Bars/pubs have similarly
looked to become all-day
eating and drinking
destinations, expanding into
coffee, breakfast, and dinner
selections. Still, the categorys
reliance on Western Europe
(36% of value in 2013), where
bars/pubs value sales have
contracted each year since
2008, has dragged down
more positive results in other
areas.
Cafs was similarly
constrained by a 4%
contraction in Western
Europe value between 2008
and 2013, which counterbalanced strong

growth in Latin America and Middle East
and Africa. The cafs category has also
struggled due to an overwhelming majority
of participants being small,
indepen
d losing ground to
chains.
MARKET ASSESSMENT
Specialist coffee shop influence is growing

1
While specialist coffee shops remains a niche market on a global level, accounting for 10% of total
cafs/bars sales in 2013, it is an important category in regions such as North America where it accounts for
40% of total sales. Starbucks is largely responsible for this growth in North America, where it has acted as a
catalyst to spur future growth in the category.
Specialist coffee shops is also a key growth area in most major markets, as demand for
comfortable, upscale, social spaces continues to surge. While most markets can boast a pre-existing
caf/bar culture, these often tend to be dominated by traditional, independent outlets patronised by older
men, whereas specialist coffee shops offer a pleasant, socially-acceptable leisure venue for women,
young people and professionals alike. Likewise, the cachet of premium coffee is driving sales in
emerging markets, particularly among the young and upwardly-mobile.
Regional Cafs/Bars Value Distribution by Type 2013

1 30%
0
0 20%
% 10%
Value share
0%
9
0
%
8
0
%
7
0
%
6
0
%
5
0
%
4
0
%
Asia Pacific
Australasia
Eastern Europe
Latin America

Cafs
Bars/Pubs
Middle East/Africa
North America
Juice/Smoothie bars
PASSPORT 24
Western Europe
MARKET ASSESSMENT
Specialist coffee shop opportunities persist in all world regions

1
All market
regionsinregions
are
expected
to growth,
offer growth
opportunities
in specialist
withUS$1.2
evenanother
the
most
mature
showing
positive
moves
over 2013-2018.
North
America
will contribute
US$2.5
billion
absolute
value
while
Western
Europe
will
see coffee
a moreshops,
moderate
billion
increase.
Starbuckss performance in the former has been very strong since it bounced back from dismal results in
2009 with the help of improved service, a restructuring of its outlet system and improved branding. In
Western Europe, Starbucks is beginning to regain a positive public perception, thanks in part to the overall
growing acceptance of specialist coffee shop culture.
The majority of global value will stem from Asia Pacific, where Starbuckss position is improving
due to accelerated outlet growth in China. Latin America will be a major expansion target moving
forward, as Starbucks looks to expand aggressively in Brazil, Mexico and Argentina. The company
also entered Colombia in July 2014 in an attempt to take on local premium chain Juan Valdez.
2,000 and
Specialist Coffee Shops Market Size 2013
Growth
1,000
Prospects
20130
2018 by Asia Pacific North America Western Europe Latin
Region America
Middle East and Eastern Europe
million US$
5
,
0
0
0
4
,
0
0
0
3
,
0
0
0
Australasia
Africa
CAGR 2013 -2018
10
8
6
0
Absolute Value Growth 2013-2018
CORP
CONSUMER
% CAGR 2013PASSPORT 25
2018
MARKET ASSESSMENT
OPPORTUNITIES
RECOMMENDATIONS
GEOGRAPHIC AND CATEGORY OPPORTUNITIES
A category in transition
Segmen
tation
advance
s
Particul
arly in
coffee
shops
but also
in the
broader
cafs/b
ars
categor
y, there
is an
ongoing
process
of
market
segmen
tation
as
consum
ers
grow
more
sophi
sticat
ed
and
mark
ets
conti
nue
to
matur
e.
Broa
dbase
d
dema
nd for
coffe
e
and,
incre
asingl
y,
other
bever
ages
suc
h as
smo
othi
es
or
tea,
has
crea
ted
spa
ce
for a
wide
vari
ety
of
appr
oac
hes
from
fast,
valu
epric
ed
opti
ons
to
more
relax
ed,
upsca
le
envir
onme
nts.
This
trend
is a
global
phen
omen
on:
Starb
ucks
is
exper
imenti
ng
with
more
premi
um
conc
ept
outlet
s in
North
America Alone
,
no
Western more
Europe,
and
even
The
India,
rapid
expa
while
nsion
other
and
chains high
are
margi
experim ns in
speci
enting
alist
with
coffe
e
valueshop
priced
s
kioskhave
style
not
outlets. gone
unnot
iced
by
oper
ators
in
other
categ
ories.
Fast
food
chain
s
have
led
the
way
in
this
rega
rd,
with
Mc
Don
ald
s
now
ope
ratin
g
over
4,2
00
Mc
Caf
outl
ets,
and
chai
ns
suc
h as
Bur
ger
Kin
g
and
Sub
way
upgr
ading
their
coffe
e
offeri
ngs.
This,
in
turn,
has
incre
ased
press
ure
on
speci
alist
coffe
e
shop
chain
s to
diver
sify
their
offers
and
demo
nstrat
e why
their
coffee is
worth
the
extra
expens
e.
Starbuc
kss
respons
e to
rising
competi
tion has
been
improve
d
outlets
with
more
unique
dcor
as well
as new
food
offering
s from
its La
Boulang
e
Bake
ry
acqui
sition
.
Up
next:
Diffe
renti
1
ation
Goin
g
for
war
d,
this
co
mp
etiti
on
1-
fro
m
bot
h
ne
w
pla
yer
s
risi
ng
wit
hin
spe
cial
ist
coff
ee
sho
ps
and
other
cate
gory
play
ers
clam
ourin
g to
take
shar
ewill
only
grow
as
the
mark
et
expa
nds.
This
has
led
to a
great
er
need
for
differ
entia
tion
among
emergi
ng
players
who
are
looking
to find
a new
angle
that
can
draw
consum
ers
away
from
the
competi
tion. In
the
largest
speciali
st
coffe
e
shop
s
grow
th
mark
ets,
such
as
Sout
h
Kore
a
and
the
US,
this
trend
is
alrea
dy in
full
swin
onit
C
or
O
Inte
N
rnati
S
Eurom
U
onal
GEOGRAPHIC AND
CATEGORY
OPPORTUNITIES
Rapid
g.
In
So
uth
Kor
ea,
de
sser
t
caf
s
hav
e
beg
un
appl
ying
the
thir
d
plac
e
mod
el to
them
ed
coffe
e and
dess
ert
shop
s,
while
in the
US
opera
tors
are
exper
iment
ing
with
teabase
d
conc
epts.
ME VICE: STARBUCKS
R CORP PASSPORT
FO 27
OD
SER
g
Large
st
Abso
lute
Valu
e
Growth
Markets
in Specialist
Coffee
Shops
2012/2013
FastestGrowing
Markets in
2013
China
South Korea
SW I N N E R
US
Russia
UK
Venezuela
70%
China
58%
Malaysia
45%
Peru
43%
Argentina
32%
Argentina
Vietnam
Static/Decli
ning
Markets in
2013
Turkey
Mexico
0 200 400 600 800 1,000 US$
million
LOSERS
Malaysia
Finland
(17%)
Slovakia
Portugal
(4%)
(2%)
CONS STARBUCKS CORP
UMER
PASSPORT 28
FOOD
SERVI
CE:
Asia Pacific is a primary target

1
Starbucks has already achieved a widespread presence across Asia Pacific, with 4,044 outlets
concentrated primarily in China, Japan, South Korea and Taiwan. Indeed, in FY2013, the companys China
and Asia Pacific segment was the fastest-growing segment, increasing by 27% in revenue terms.
In 2013, Starbucks reached over 1,000 outlets in both China and Japan. Starbucks aims to continue
to focus particularly on expanding its China business enough to make it the companys second-largest
market outside the US. (As of 2013, China was third in terms of foodservice value, still trailing Japan and
the US.)
Starbucks is also looking for major growth opportunities over the long term in India, where it opened
its first outlets in 2012 as joint ventures with local company Tata Global Beverages. The partnership plans
to open outlets across India and compete with local coffee shop chain Caf Coffee Day, which will provide stiff
competition.
Largest Growth Opportunities in Asia Pacific 2013-2018

3,000
25
2,000
1,500
15
3 201
-2018
US$ million
2,500
10
%CAG
R
20
1,000
0
500
0
China
South Korea
Indonesia
Absolute Growth 2013-2018
Note: Grey indicates market in which Starbucks is not category leader
Starbucks solidifies dominance in China by regaining share
Starbucks considers China to be among the most

China:
Specialist
attractive growth markets due to
its rapidly
growing
Coffee
Shops
Specialist coffee shops remains a small,
middle class, ongoing urbanisation, and high-income,
rapidly-growing niche in China. Sales were
Brand to Western
less than US$5
young professionals who are attracted
million in 1999 and have since grown to US$1.7
billion trends. This targeted positioningShares
lifestyle
has allowed
2008in 2013. By 2018, the market will reach US$4.5Starbucks
billion. to flourish despite offering prices
that are
2013
Much of this growth has been driven by Starbucks,
very high relative to local wages.
which plans to reach 1,500 outlets by 2015.
The Coffee
revenues from
spread
Bean & Tea
20
over 400 net new
modern
Leaf
coffee
Although Starbucks is the store openings
house
unequivocal leader, its share during the year. At
this
early
stage
in
culture
eroded in the middle of the
10
the
markets
review period as McCaf and
where
development,
Costa Coffee also set their
none
0
sights on China. However, in competitor growth
previously
2008
2009
may
have
a
2013, Starbucks regained six
existed.
mutually beneficial
Starbucks
percentage points in market
Costa Coffee
effect
by
helping
to
share, thanks to the increased
Euromonitor
International
ER
CONSUM FOODSERVIC
Role reversal in India

1
Starbucks faces a relatively unfamiliar

uphill battle in India, where a host of chains both local and international - have already
established a significant footprint even as
Starbucks makes its initial push.
E:
S CORP PASSPORT 30
STARBUCK
This late entrance has not been for

the lack of trying; after several
unsuccessful attempts, Starbucks finally
leveraged an existing local sourcing
relationship with Tata Coffee to create a
new joint venture, Tata Starbucks, in
2012. The partnership opened its first
Indian outlet in late 2012, and as of July
2014 had a total of 50 outlets in India, a
number it hopes to double by the years
end.
That said, Starbucks faces a tough
challenge: Caf Coffee Day claims a
steady 50% of local market share and is backed

by one of the largest local coffee manufacturers,
Amalgamated Bean Coffee Trading Company. The
company has been very adept at growing coffee
culture in India through appealing to professionals,
couples and young students who need an informal
social or business outlet. In 2010, the company
rebranded itself with a new slogan, A lot can
happen over coffee and a logo shaped like a
dialogue bubble, evoking an image of conversation
among friends.
%value
share
India: Specialist Coffee Shops

Brand
Shares 2008-2013
80
60
40
20
0
2008
2009
Caf Coffee Day

Coffee Day Xpress
Starbucks
2010
2011
2012
2013
Barista Coffee Co
Costa Coffee
To set itself apart, Starbucks has

opened ultra high-end outlets
incorporating locally-sourced design
materials, architectural dcor and art
customised to the neighbourhood. Indeed,
localisation is a key component of the
companys strategy in India. This is
reflected in both the addition of regional
Indian dishes to its food menus and
interior design. While the decoration at a
Mumbai outlet reflects the citys mercantile
past, the furnishing in a Pune
Starbucks pays homage to the
citys rich copper culture.
Euromonitor International FOODSERVICE: STARBUCKS CORP

CONSUMER
PASSPORT 31
Demand for affordable luxury drives opportunity in Mexico

1
Starbuckss attention has also turned to Latin America as a secondary growth market. The market is
unique in that it has a very well-developed coffee-drinking culture but very little in the way of modern coffee
shops, as many have viewed the vast network of independent cafs/bars as a significant barrier to entry.
However, chains are slowly beginning to make inroads, and specialist coffee shops in particular are
enjoying increasing popularity among young consumers in the upper-middle-income segments as well as
urban consumers seeking out low-priced ways to participate in premium foodservice.
The success of specialist coffee shops in Mexico, despite the countrys affinity for economically-priced
instant coffee in retail channels, stems from a new type of hybrid consumer who purchases both premium
and discount products. While the middle class in Mexico has been on the rise for many years, allowing
more consumers to afford a few luxuries, many cannot increase spending in all categories. These
consumers look to save on practical, everyday purchases in order to afford small splurges such as a trip to
a specialist coffee shop.
S hops Foodservice Value 2013 and Absolute
p
Foodservice Value
e
Growth 2013/2018 in
Key Latin American
c
Markets
i 800
a
l
i 600
s
t 400
US$ million
C200
o
f 0
f
e
e
S
Mexico
Argentina
Colombia
Brazil
Chile
Venezuela
Foodservice Value 2013

PASSPORT 32
Peru
Domestic players will be challenging to overcome in Latin America

leader
Muchofofany
Starbucks
challenge,
and
indeed
the
challenge
shop
trying
to enter
theinternational
region,
in coffee
identifying
achain
way to
sell Latin
American
coffeeisback
to Latin Americans.
Brazil is the worlds largest coffee producer, but
much of the coffee actually consumed in the market
is value-positioned and of relatively low quality,
served in small, no-frills cafs. Although interest in
specialist coffee shops, particularly in metropolitan
areas is increasing, local chains with their more
competitive pricing, are the most successful as Frans
Caf and Gro Espresso lead the market with 22%
and 16% market shares, respectively. Nonetheless,
Starbucks has named Brazil as a major growth
opportunity going forward, with a goal of opening
several hundred stores over the forecast period.
The company has made considerable progress,
increasing its share from just 6% in 2008 to 15% in
2013.
Starbuckss
Largest
Markets in
Latin
Am
eric
a
201
3
Mexico
Argentina
Chile
Brazil
Peru
Starbucks faces even more competition in

Argentina, where it ranks fourth behind domestic
players, Havanna Caf, Bonafide, and Caf
Martinez.
Euromonitor
International
In June 2014,
Starbucks opened its
first outlet in Colombia,
the third largest coffeeproducing country in the
world. There, as in
Brazil and Argentina,
Starbucks will also face
the threat of local
competitors with a
significant home-field
advantage. Colombian
chain Juan Valdez has
181 outlets in Colombia.
In addition to its
emphasis on its status
as a home-grown chain,
Juan Valdez, although
positioned as a
premium brand, is still
50
100
more affordable than
Foodservice value (US$ million rsp)
Starbucks.
Note: Grey indicates markets in

which Starbucks is not the category
CONSUMER STARBUCKS CORP

FOODSERVICE:
PASSPORT 33
The tide is turning in Western Europe

1
Specialist coffee shops have taken longer to find success in Western Europe than other regions due to
the importance of traditional caf culture. However, faster-paced lifestyles and interest in more inventive
coffee types is increasing interest in coffee shops, at the expense of cafs. Indeed, over the forecast,
specialist coffee shops sales are expected to increase by US$1.2 billion in Western Europe, while sales
through cafs will contract by US$5.1 billion.
Starbucks has established a widespread presence in the region, and is the leader with 23% of the
overall specialist coffee shops market. The majority of its sales and outlets are in the UK, which is also by
far the regions largest market for specialist coffee shops. Costa Coffee, owned by UK-based company,
Whitbread Plc, is Starbuckss biggest competitor in both the UK where it claimed a majority share of 44% in
2013, as well as Western Europe as a whole. Although second to Starbucks in terms of overall foodservice
value, Costa Coffee topped Starbucks in terms of absolute growth in the region, increasing by US$522
million between 2008 and 2013, thanks mainly to its strong position in the UK, as well as its 2013 expansion
efforts
into Spain and France.

Largest Growth Opportunities in Western Europe 2013-2018
350
20
15
250
200
10
US$
150
100
50
0
UK
Turkey
Italy
Netherlands
Spain
Norway

% CAGR 2013-2018
Note: Grey indicates market in which Starbucks is not the category leader
STARBUCKS CORP
Sweden
PASSPORT 34
% CAGR 2013-2018
million
300
Western Europe turnaround strategy

1
Starbuckss
European
struggles
areEuropean
due to high
pricing, poor
quality
perception
in some markets,
flavours
that are
not
in line
with
Western
preferences,
and
its
image
as a in
corporate,
American
giant.
These
woes
were
compounded
in
2012
when
Starbucks
faced
a
tax
scandal
theissues,
UK, forcing
it to
reveal
that
it
pays
far
less
in
local
taxes
than
competitor
Costa
Coffee.
To
combat
these
Starbucks
has
taken
steps
that
mimic
its
successful
US
turnaround
blueprint:
improve
the
experience,
and
show
customers once again that a trip to Starbucks is about more than just obtaining a cup of coffee.
this end, in
the
company
introducing
concept
stores much
like
those that
would in
later
go on
to
beTo
successful
India
in
earlybegan
2013.from
The bicycle
Bank outlet
inan
Amsterdam,
for
example,
is housed
apremium
historic
bank
vault
and
includes
dcor
made
parts,
emphasis
on
slow
coffee
theatre,
single-cup brewing methods and a food menu of pastries that are baked fresh daily inside the store.
Starbucks
alsoUK,
implemented
market-specific
initiatives
designed
to better
appeal
to unique
preferences.
In the
traditional
English
Chesterfield
sofas
were added
to outlet
seating
areas,a and
beverages
with
additional
shots
of
espresso
and
stronger
flavours.
In
France,
Starbucks
added
second
espresso
roast
to
reflect
French
preferences
for
more
choice.
More
broadly,
Starbucks
also
added
nametags
to
barista
uniforms
and
began
writing
customers
names
on
cups
to
provide
a
more
intimate,
personalised experience.
Finally, Starbucks has also taken steps to resolve its balance sheet issues. The company has begun
moving away from high-profile outlet locations and choosing those with lower rents in business and
residential districts. The company is also shifting its ownership structure by focusing on growing its licensed
outlets in profitable locations, while closing underperforming company-operated stores. These initiatives are
beginning to bear fruit with the companys EMEA operating margin improving to 5.5% in FY2013. The
company expects positive results to continue over the long term, targeting an operating margin in the midteens.
STARBUCKS CORP
PASSPORT 35
Starbucks tests tea strategy in North America

Teavana branded tea
products became available
1
in US Starbucks outlets,
In late December
while the first Teavana
2012, Starbucks acquired
Teavana, a retail speciality Fine Teas + Tea Bar - a
foodservice and retail
tea shop, as part of the
companys plan to transform outlet devoted exclusively
the tea industry as it has
tea - opened in several
done to the coffee industry. to
US cities, including New
According to company
York, Chicago, Seattle,
reports, tea currently
represents just 9% of US
and Beverly Hills. If these
Starbucks outlet sales.
succeed, Starbucks
However, the company sees outlets
may consider extending
considerable potential in
tea, which also rings true at the Teavana tea bar model
the retail level, as
to other markets.
forecasts that global retail
sales of tea (both hot tea
and RTD tea) will reach
US$112 billion by 2018, just
slightly behind retail sales of
coffee (both hot coffee and
RTD coffee) which is
expected to hit US$115
billion by 2018.
Nevertheless,
increasing consumer
foodservice opportunities
for tea are likely to prove
more challenging than in
the retail space. While
consumers may be willing
to pay a premium to forgo
brewing their own coffee,
they may be less inclined to
pay for a cup of tea, which
requires minimal equipment
(mainly just hot water) to
prepare at home. Iced tea
may offer the most potential
for Starbucks, which is both
harder to make at-home
and growing in popularity as
indicative of the forecast
increase in RTD tea sales
over 2013-2018.
Beginning in 2013,
Globa
l
Absol
ute
Retail
Value
Growth
2013/2
018:
T
e
a
v
s
C
of
fe
e
25,000
US$ million
20,000
15,000
10,000
5,000
0
Tea RTD Tea
Coffee
RTD Coffee
Euromonitor
International
CONSUMER
FOODSE CKS CORP

RVICE:
STARBU
PASSPORT 36
MARKET ASSESSMENT
OPPORTUNITIES
RECOMMENDATIONS
RECOMMENDATIONS
Key
recommen
dations
Do not lose
core focus
Starb
ucks
continued
to make
bold
moves in
2013,
especially
in terms of
ramping up
its tea
portfolio
through its
Teavana
brand and
juices,
investing in
a high-tech
juicing plant
for its
Evolution
Fresh brand.
While each
of these
initiatives
opens the
company up
to new
opportunities
that extend
dayparts and
reach new
consumers,
Starbucks
should make
sure to
remain firmly
focused on
its core
coffee
identity.
Indeed,
coffee will
remain the
key to
attracting
and
sustaining
consumers
in core
markets,
particularly
Western
Europe,
where
interest in
coffee
shops for
the coffee
is
increasing.
Localise the
menu, localise
the
experience
As
Starbucks
continues to
move into new
markets,
localising the
menu and the
experience
should be a
primary focus.
Its success in
emerging
markets thus
far shows the
company is
well aware that
in order to
grow a new
kind of caf
culture, it has to
make
concessions to
that which
preceded it.
China, China,
Local dishes on China
food menus can
appeal in
markets where
consumers
Of perhaps
typically dine-in
little surprise
at cafs, and
to Starbucks,
local beverage
international
favourites such
focus should
as tea or juice
continue to be
can help ease
firmly on China
the transition to
moving
more exotic
items. Similarly, a forward. By
focus on a
2018, it will be
unique dining
the third
experience largest global
through menu,
specialist
dcor and
coffee shops
service market behind
highlights the
the mature US
strength of the
and Japanese
Starbucks brand. markets, yet
nowhere close
to its saturation
point. It will
contribute 27%
of global
absolute value
growth in the
category over
2013-2108,
increasing at
an equally
dramatic 22%
per year.
Starbucks is
well positioned
to benefit from
this growth,
with a leading
65% share, but
it will have to
expand quickly
to keep pace.
Competitors
are coming,
and Starbucks
will have to
expand
aggressively just
Euromoni
tor
to maintain its
position.
Internatio ER FOODSERVICE: STARBUCKS

nal
CORP PASSPORT 38
CONSUM
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Internati MER FOODSERVICE: STARBUCKS

onal
CORP PASSPORT 39
Euromonitor
CONSU

Starbucks Corp in Consumer Foodservice World-1

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STARBUCKS CORP IN CONSUMER FOODSERVICE

All forecast data are expressed in constant terms;

Much of the information in

CONSUMER FOODSERVICE: STARBUCKS CORP

Key company facts

Strength continues in 2014

Starbucks Corp: 2013 Full-Year Results

Starbucks Corp: Interim Q3 2014 Results

FY2012 Y-o-y growth US$ million

(1,710 bps) Operating

SWOT: Starbucks Corp

Key strategic challenges and objectives

experience can set the brand

The third place benefit

media presence has

FOODSERVICE: STARBUCKS CORP

RTD coffee with

Starbucks Corp: Evolution

New CPG Products 2013-2014

Spiced black tea

Snack bars and

Starbuckss other segments

And looking beyond coffee

Pressed Juice Blends

Outperforming the market (finally)

Global Specialist Coffee Shops

Moves back up in global rankings

A firm hold on specialist coffee shops

sales of the second-ranked player, Costa Coffee.

Costa Coffee is UK-based and primarily

concentrated in Western Europe, but has been

60-unit Coffeeheaven chain.

FOODS CKS CORP

Cafs/bars belongs to independents

Cafs/bars is a diverse category that comprises a range of beverage-orientated foodservice formats.

Specialist coffee shops vs cafs: Whats the difference?

Specialist Coffee Shops

Middle East and

Strength in North America, Western Europe, Asia Pacific

2013 Starbucks Specialist Coffee Shops Ranking:

CONSUMER FOODSERVICE: STARBUCKS

Global chains to watch

Regional Players Find Rapid Growth in Specialist Coffee Shops 2008-2013

lifestyles in South Korea.

Appeals to young people with trendy,

Competition beyond specialist coffee shops

Global Foodservice Value Growth by Category 2008-2013

Euromonitor International CONSUMER

A dichotomy in beverage-based foodservice categories

4.4% CAGR (2013-2018)

0.8% CAGR (2013-2018)

just US$2.9 billion in 2008,

and 2013, which counterbalanced strong

of participants being small,

Specialist coffee shop influence is growing

Regional Cafs/Bars Value Distribution by Type 2013

Specialist Coffee Shops

Specialist coffee shop opportunities persist in all world regions

CAGR 2013 -2018

GEOGRAPHIC AND CATEGORY OPPORTUNITIES

GEOGRAPHIC AND CATEGORY OPPORTUNITIES

Asia Pacific is a primary target