To tap growth in a place where coffee consumption per capita is said to be low compared to international standards, Nestle began to offer coffee that is Starbucks-branded in mainland China. The company started to sell products with the Starbucks label in February in Asia, Europe and Latin America, Reuters reported.
Rashid Aleem Qureshi, Nestle’s chief executive officer for the Greater China region, said per the outlet, “We believe China is the most exciting market in general but especially for coffee because … per capita cup consumption is quite low as compared to Asia.” Nestle said, according to the outlet, that per capita coffee consumption in China is roughly 6 cups yearly in comparison to 300 in South Korea and 400 in Japan.
The food and beverage company will begin to sell 21 instant coffee and capsule products with the Starbucks brand on online shopping platforms such as JD.com and Tmall in addition to hotels and offices in cities that are tier one. The Starbucks partnership is said to aid Nestle in bringing a choice for premium coffee to the selection of products that it offers in China like Nespresso capsule coffees and the Nescafe instant coffee range.
Starbucks China CEO Belinda Wong said, according to the outlet, that the partnership with Nestle is said to open new avenues to offer its selections in China. And, in an earnings call in July, Starbucks President and CEO Kevin Johnson said that, in China, the firm is “bullish on the long-term market opportunity as we deploy capital to build new stores and expand our presence.”
The total store count in the country grew by 16 percent versus the prior year to more than 3,900 locations at the conclusion of the Q3. And the coffee chain has an active rewards member base of 9.1 million in China, which marks an increase of 10 percent from last quarter and 36 percent from a year ago.