Frappuccinos by the bottle now in China
Starbucks launches bottled Frappuccino in China today, a market with lots of potential customers but little history with ready-to-drink coffee drinks.
The entire country buys only about $25 million in ready-to-drink coffee each year, compared with about $1 billion in the U.S. and more than $10 billion in Japan, said Gerry Lopez, president of Starbucks’ global consumer-products group.
“China, by comparison, is tiny,” he said. “The truth is, however, that 11 years ago when we launched [bottled Frappuccino] in the U.S., the market was zero. So the good news is that in China, we’re starting at a little better than zero.”
Starbucks kicks off the new drink at stores in Hong Kong, Shanghai and Beijing and at convenience stores and other locations in Hong Kong and Shanghai.
The Seattle company has about 240 coffee shops in mainland China and about 530 stores if you add Hong Kong, Macau and Taiwan.
“We’re still in the early developmental stages, even for our retail stores,” Lopez said.
Before today, Starbucks sold bottled Frappuccino only in the U.S., Canada and South Korea. The company has other ready-to-drink coffees on shelves in Japan and Taiwan.
A new international partnership with PepsiCo gives Starbucks more distribution power in countries such as China, Lopez said.
“This was an easy market to pick,” he said, because Pepsi has been there a long time and it has strategic value for both companies.
During the next year, the partnership will enter at least one new country, but it could be just about any place where Starbucks has stores, Lopez said.
Eventually, Starbucks may sell ready-to-drink coffee in countries without Starbucks stores, but it will not happen soon. “With 40-some countries that we operate in now, we have a pretty target-rich environment,” he said.
Lopez would like to manufacture bottled Frappuccino in China to lower shipping and other costs.
Despite the expansion of Starbucks’ ready-to-drink beverages, Lopez said his part of the company, which represents about 4 percent of Starbucks’ overall revenues, is not about to outpace its retail stores.
“What we do is extend the experience, but we’re not looking to drive it,” he said.
Melissa Allison: 206-464-3312 or mallison@seattletimes.com