Title: Starbucks Expands Investments in China’s Booming Coffee Market
Subtitle: New Coffee Industrial Park and Technological Center Reflect Confidence in China’s Growth Prospects
By [Journalist Name]
Shanghai, September 17th – Starbucks, the iconic American coffee chain, reaffirmed its commitment to the Chinese market during a visit by its Global CEO, Na Sihan, three months ago. Na Sihan expressed confidence in Starbucks’ future development in China and announced the construction of the Starbucks China Coffee Innovation Industrial Park in Kunshan, Suzhou. With the opening scheduled for this month, the state-of-the-art roasting plant will be the world’s most modern and innovative facility.
Starbucks has made strategic moves in China, highlighting its optimism about the country’s coffee and beverage market. Apart from the Kunshan plant, the company is also planning to establish the Starbucks China Innovation and Technology Center in Shenzhen’s Futian District. By capitalizing on the innovation advantages and logistics facilities of the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area, Starbucks aims to further leverage its expansion in the Chinese market.
Experts underline that these investments demonstrate international companies’ continued confidence in the growth potential of China’s coffee and beverage market. The financial commitment by Starbucks is viewed as a vote of confidence, with the company strategically positioning itself for market expansion. The choice of locations for these investments also indicates Starbucks’ intention to tap into the innovation hubs and well-established logistics networks of the Yangtze River Delta and the Greater Bay Area in the future.
Starbucks China’s Chairman and CEO, Wang Jingying, outlined the company’s long-term strategy, which centers around providing a new coffee experience that revolves around “coffee and people.” This strategic approach, aimed at enhancing Starbucks’ unique competitive advantages, includes incorporating new scientific and technological inspiration and innovative technical solutions. Wang believes that these efforts will contribute to the high-quality development of China’s specialty coffee and retail industries.
In recent years, foreign investors have recognized the importance of pursuing high-quality development and focusing on the entire coffee industry chain in China. Italy’s LAVAZZA entered the Chinese market in 2020, with its first store in Asia located in Shanghai. Similarly, American brand Blue Bottle Coffee is set to officially enter the Chinese mainland market in 2022, positioning its roasting plant in Shanghai to provide freshly roasted specialty coffee beans to Chinese consumers.
Underlining its commitment to the industry’s complete value chain, Starbucks ventured into coffee bean production in China as early as 2012. The implementation of the “Coffee Growers Support Center” in Pu’er, Yunnan, strengthened the connection between local coffee farmers and Starbucks’ logistics, roasting, distribution, sales, and shared stores. The upcoming opening of the Starbucks China Coffee Innovation Industrial Park completes a closed loop in China’s coffee industry chain. This will enable more Chinese consumers to enjoy specialty coffee brewed with locally sourced, fresher coffee beans.
Meanwhile, Kunshan, located in the Yangtze River Delta, has become a core hub for the high-end food industry, with coffee at its core. Leveraging the integrated development of the Yangtze River Delta and the Shanghai-Suzhou co-city effect, Kunshan has gained recognition as the “Coffee Silicon Valley” of China. Various activities, including the “International Coffee Roasting Competition,” the “China International Coffee Industry (Kunshan) Conference,” and the “Festival Coffee Culture,” have contributed to this reputation.
Kunshan’s Comprehensive Bond Zone is home to the Shanghai Free Trade Zone Coffee Trading Center, which has recently commenced operations. Equipped with a temperature-controlled storage warehouse, the trading center facilitates coffee spot trading and provides comprehensive location and supporting services.
Starbucks’ investment in the Chinese market has also set the stage for other major projects. Swire Coca-Cola (Suzhou) Beverage Co., Ltd., a prominent beverage manufacturer, will commence construction this month, signaling its future investment plans in China. Such substantial investments reflect the strong economic vitality of the Yangtze River Delta and the Pearl River Delta, as well as the significant increase in consumer demand. It also showcases foreign brands’ confidence in the Chinese economy and their growing influence in the Chinese market.
According to the “China Urban Coffee Development Report 2023,” jointly released by esteemed institutions such as the China Business Data Center and Shanghai Jiao Tong University Cultural Innovation and Youth Development Research Institute, China’s coffee industry is experiencing remarkable growth. The industry’s scale has increased from 165.1 billion yuan in 2021 to 200.7 billion yuan in 2022. By 2025, this figure is projected to reach 369.3 billion yuan, reflecting the rising frequency and quality of coffee consumption among Chinese consumers.
With Shanghai being home to the largest concentration of Starbucks stores worldwide, Na Sihan recognized the untapped potential in Shanghai and throughout China. The coffee giant plans to open 9,000 stores in mainland China by 2025, resulting in the creation of tens of thousands of new job opportunities.
Starbucks’ bold investments and expansion plans in China’s thriving coffee sector signify its unwavering confidence in the Chinese market’s future prospects. As the company actively establishes innovative production facilities and strengthens the coffee industry’s entire value chain, Chinese consumers can look forward to enjoying premium, locally sourced coffee on a larger scale.
References:
– China Business Data Center
– Shanghai Jiao Tong University Cultural Innovation and Youth Development Research Institute
Xinhua News Agency, Shanghai, September 17th: A cup of coffee shows confidence
Xinhua News Agency reporters Wang Yongqian, Yang Shaogong, Xu Xiaoqing
“We will continue to invest. In Kunshan, not far from here, we are investing in the construction of Starbucks China Coffee Innovation Industrial Park, which is the most modern roasting plant in the world and will open in September .” More than 3 months ago, Starbucks Global CEO Na Sihan visited the Chinese market for the first time and reiterated Starbucks’ long-term commitment to China in Shanghai and was confident in the company’s future development in China.
In September this year, Starbucks, which was born in Seattle, USA, often made “big moves” in China on the other side of the Pacific. Not only is the Starbucks China Coffee Innovation Industrial Park located in Kunshan, Suzhou, in the Yangtze River Delta region about to be unveiled, the Starbucks China Innovation and Technology Center in Shenzhen is also planned to be put on work in Futian District.
Industry analysts pointed out that the two major moves above indicate that international companies remain optimistic about the growth space of China’s coffee and related beverages market. The capital increase in question is a “vote of confidence” in the market expansion prospects with real money. Judging from the location of the capital increase, this international coffee giant will further take advantage of the innovation advantages and logistics facilities of the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area in the future.
The new Starbucks store in Shanghai Lippo Plaza displays Chinese city-themed mugs (photo taken on September 27, 2022). Photo by Xinhua News Agency reporter Liu Ying
Wang Jingying, chairman and CEO of Starbucks China, said last month that Starbucks hopes to create a new experience around “coffee and people”, which is a long-term strategy in the Chinese market. She believes that new scientific and technological inspiration and innovative technical solutions will enhance the company’s unique competitive advantages and contribute to the high-quality development of China’s specialty coffee industry and retail industry.
The pursuit of high-quality development and attention to the entire industry chain have become two key words for foreign investors to increase investment in China’s beverage market in recent years.
In 2020, the Italian coffee brand LAVAZZA opened its first store in China and its first store in Asia through a collaboration in Shanghai, focusing on promoting Italian food life. American Blue Bottle Coffee, which will officially enter the Chinese mainland market in 2022, has chosen to set up a special roasting plant in Pengpu, Shanghai since its inception to introduce small batches of freshly roasted specialty coffee beans from Yemen , Costa Rica, and Bolivia. for Chinese users.
Starbucks has extended the “tentacles” of the industrial chain further to the source of coffee bean production. As early as 2012, Starbucks’ “Coffee Growers Support Center” was implemented in Pu’er, Yunnan, closely connecting local coffee farmers with logistics, roasting, distribution, sales and even sharing stores.
When the Starbucks China Coffee Innovation Industrial Park opens, from Pu’er in Yunnan to Shanghai and Kunshan, China’s single market will form a complete closed loop upstream and downstream of the coffee industry chain, and will have its integration with mechanized and intelligent large-scale production. . This means that more Chinese consumers will drink specialty coffee brewed with fresher local Chinese coffee beans.
In Kunshan, the green coffee bean trade distribution has started to take shape. The first phase of the Asia-Pacific Green Coffee Bean Distribution Center’s 50,000 square meter bond distribution warehouse has been deployed, with an annual storage capacity of 80,000 tons The global green coffee bean trade distribution business is fully maintained. Louis Dreyfus, Sucofina, and Famous Well-known green bean traders such as Doufang have settled in the centre, forming trading clusters such as green bean wholesale, logistics and distribution, and distribution of finished coffee.
The opening event of the 2nd Shanghai Coffee Culture Week (photo taken on August 4, 2022). Photo by Xinhua News Agency reporter Fang Zhe
The coffee industry is the core industry of the high-end food industry in Kunshan Development Zone. Relying on the geographical advantages of the integrated development of the Yangtze River Delta and the effect of Shanghai-Suzhou co-city, Kunshan has successively held a series of activities such as the “International Coffee Roasting Competition”, “China International Coffee Industry (Kunshan) Conference” and “Festival Coffee Culture”, starting the name “Coffee Silicon Valley” of China.
In the Kunshan Comprehensive Bond Zone, the Shanghai Free Trade Zone Coffee Trading Center is located in its entirety, and the supporting constant temperature storage warehouse has been put into operation. Coffee spot trading has been launched and locations and services supporting provided. .
It is understood that following the launch of the Starbucks China Innovation Coffee Industrial Park, another major local project, Swire Coca-Cola (Suzhou) Beverage Co, Ltd will also start construction this month and announce future investment plans in China. Swire Coca-Cola previously expanded its production line in Guangdong, setting a new record for its single investment in the mainland.
Zhu Danpeng, a Chinese food industry analyst, believes that the overall economic vitality of the Yangtze River Delta and the Pearl River Delta is strong, and consumer demand has increased significantly. Foreign investors in the food and beverage field are ready to achieve heavy asset support, which not only reflects their confidence in the Chinese economy, but also shows that these brands have a strong influence on the economy The ability of the entire Chinese market has been further increased and recognized.
In May this year, the “China Urban Coffee Development Report 2023” jointly released by China Business Data Center, Shanghai Jiao Tong University Cultural Innovation and Youth Development Research Institute, etc. showed that the scale of China’s coffee industry has grown from 165.1 billion yuan in 2021 to 2022. It was 200.7 billion yuan in 2025 and is expected to reach 369.3 billion yuan in 2025. Chinese consumers’ coffee drinking habits are becoming daily and high quality.
Na Sihan’s previous visit to Shanghai specifically mentioned that although Shanghai has become the city with the largest number of Starbucks stores in the world, there is still room for growth in the average number of coffee cups purchased by Shanghai consumers and even consumers throughout China. also The reasons why Starbucks is firmly optimistic about the Chinese market.
According to the company’s blueprint, by 2025, it will reach the goal of opening 9,000 Starbucks stores in mainland China, and will also create tens of thousands of new jobs for this purpose.
#cup #coffee #brings #confidence
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