Starbucks offers local brew to boost sales in China

by Yuliya Talmazan | February 5, 2009 at 11:12 am

653 views | 10 Recommendations | 19 comments

Starbucks's new drink to be sold in China is a locally created brew. The drink called 'South of the Clouds' will be brewed from locally grown beans, and is the latest attempt of the stuggling coffee chain to improve its finances. While its US market share is shrinking, Starbucks wants to maintain its Asian market. The company plans to introduce the new blend in China first, and than try selling it in Singapore and Malaysia as well.

This latest strategic move can be viewed differently. Starbucks might be trying to appeal to the tastes of local consumers and cater to their demands better through offering local brews. On the other hand, the company might just be saving costs by using local ingredients. However, Starbucks's President Martin Coles maintains that the company still roasts its coffee in the States, and has to bring roasted beans back into China, so the expense is still there.

Banking on China growth to offset the business slump in the United States, Starbucks, the world's largest coffee shop chain, is doing more than just opening more outlets. It is brewing a new blend, romantically called "South of the Clouds", of beans grown in Yunnan, the scenic southwest province that is better known for its dark tea than brown coffee.

How would the Seattle-based coffee vendor describe the taste of its new brew to attract newly converted Chinese coffee drinkers? Imagine these definitions of the abstract taste: bright acidity, herbal spiciness and cocoa feel.

Starbucks has been working for three years with farmers and government officials in Yunnan to look for coffee beans that meet its strict standard.

For previous NP coverage of Starbucks financial struggles, see here.

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Marisa Olivia

at 11:27 on February 5th, 2009

Yunnan coffee is amazing! Doesn't matter if Starbucks is trying to cut costs by going local - every business should try to do this, and they don't have to do it under the guise of being environmental. It's something sensible that businesses can do regardless of their position, which should hopefully make the transition easier - helping the environment while lowering operating costs.

Yunnan tea and coffee are both excellent. In our town, a cup of coffee from imported beans would cost about Y25. A cup of Yunnan would cost Y10, and it was just as good, if not better.

The next step should be for them to start roasting beans locally in China. They could save on fuel costs and emissions that way.

Starbucks definitely has a hold over the Asian market, in a place where there aren't many mom & pop coffee houses anyway, so they might as well try to do it right!

Thanks for posting this piece.

Amy Judd

at 11:34 on February 5th, 2009

This is a good idea - I agree that all coffee shops should offer a 'local brew' if they can.

Yuliya Talmazan

at 11:41 on February 5th, 2009

Thanks for your comments, Marisa Olivia and AmyJudd. What I don't understand is why Starbucks has to buy beans in China and than negate all the environmental benefit of doing so by transporting those beans to the U.S. for roasting like Marisa Olivia said. I am sure there is coffee roasting technology available in Asia. So, it seems like a bit of a waste both financially and environmentally.

vard

at 12:23 on February 5th, 2009

I photographed a Starbucks in Shanghai in December 2008. The particular part of Shanghai in my photo is newer construction / renovation, tricked out to resemble the truly old classic Chinese architecture that is very nearby, and it's a bit of a tourist trap. Perfect location for Starbucks. Personally, I am more of a tea drinker (especially iced tea) than a coffee drinker, and on this trip I discovered that while Starbucks in Taiwan never heard of iced tea, Starbucks in Shanghai makes it perfectly.

vard has contributed a photo to this story.

nyctuber

at 14:50 on February 5th, 2009

Interesting/ weird/ ironic mix of Globalization and supporting the local economy.

chinatoddmd

at 15:09 on February 5th, 2009

This is typical of new developments in China. They replicate company's logos and signage to lure other businesses. There wasn't any business here, just the sign. They complex had many others, Rolexer, Swach, to name a few. Although misspelled, to the Chinese they looked authentic and created an air of authenticity and elitist level of ownership if one bought property. This was taken in Gaungdong province, Shenzhen.

chinatoddmd has contributed a photo to this story.

nyctuber

at 15:34 on February 5th, 2009

Wild!

Mark W Mason

at 16:03 on February 5th, 2009

Having a late morning Starbuck's coffee on Shanghai's Nanjing Road.

Mark W Mason has contributed a photo to this story.

lefty_liberated

at 17:52 on February 5th, 2009

"Starbucks has been working for three years with farmers and government officials in Yunnan to look for coffee beans that meet its strict standard."

hah...not to meet strict standards of being ethically grown, though,

roger810jp

at 21:16 on February 5th, 2009

This is my one and only picture of Starbucks inside the well known Forbidden City (of the Last Emperor) in Beijing, China in 2002. I took this shot wondering why on earth would a commercial store appear inside a cultural heritage....that was the start of commercialization in China! I just learned they closed it down in July 2007. I should have at least had a sip of an espresso and bought myself a mug...

roger810jp has contributed a photo to this story.

Wang.Sicheng

at 18:37 on February 6th, 2009

Last summer, I and two of my best friends went for a graduation trip to my home country China. This photo was taken at the riverside of "houhai" in Beijing.
http://wangsicheng.com/?p=216
Wang.Sicheng has contributed a photo to this story.

jomanalo

at 23:04 on February 5th, 2009

With a growing public interest for anything western, China is a lucrative market for most western brands. Seen here is the first McDonalds restaurant in China, amid the old architecture of Shenzhen's Dongmen Arean, in Luohu District.

jomanalo has contributed a photo to this story.

Mark Zigzag

at 05:13 on February 6th, 2009

Great Wall's Starbucks simply just awesome. :D

Mark Zigzag has contributed a photo to this story.

Adrienne Froemelt

at 06:01 on February 6th, 2009

Starbucks became my Western sanctuary while I was traveling in China. It was one of the few smoke-free establishments and a peaceful escape with clean restrooms.

Adrienne Froemelt has contributed a photo to this story.

bobofotoblog

at 22:41 on February 6th, 2009

as a Starbucks lover, we wouldn't miss a chance to taste it in China.
we traveled to Shanghai from Toronto, really lucky that we could have a hot sip in the windy freezing night. However, after I tried to take some snapshots in there, I've been asked not to shoot in the shop, that's surprised me though.

bobofotoblog has contributed a photo to this story.

superwomansson

at 14:27 on February 7th, 2009

this was photo was taken amidst the hustle and bustle of the Beijing Olympics. How enjoyable a quiet evening over coffee can be!

superwomansson has contributed a photo to this story.

Elizabeth EW

at 12:58 on February 8th, 2009

about a year ago i went to beijing in china. we went to silk street market, the home of the genuine fakes. it was a total reclusive market seemingly away from anything modern.. and then along came starbucks. after eating rice and drinking green tea for 2 weeks you cannot imagin how exited i was to find it.
i snapped a pic, as it was such a surreal and unlikely thing to happen =]

Elizabeth EW has contributed a photo to this story.