STARBUCKS COFFEE: EXPANSION IN ASIA

HISTORY Starbucks Coffee Company was founded in 1971 by three coffee aficionados. Starbucks, named after the coffee-loving first mate in oby !ick, opened its first store in Seattle"s #ike #lace #ublic arket. !uring this time, most coffee was purchased in a can directly from supermarket shelves. Starbucks" concept of selling fresh-roasted whole beans in a specialty store was a revolutionary idea. $n 19%7, &oward Schult', a former Starbucks employee, ac(uired the company. )hen Schult' first *oined Starbucks in the early 19%+s as director of retail operations, Starbucks was a local, highly respected roaster and retailer of whole bean and ground coffees. , business trip to ilan"s famous coffee shops in 19%- opened Schult'"s eyes to the rich tradition of the espresso beverage. Schult' recalls, .)hat $ saw was the uni(ue relationship that the $talian people had with the ubi(uitous coffee bars around $taly. #eople used the local coffee bar as the third place from home and work. )hat $ wanted to try and do was re-create that in /orth ,merica.0 1 $nspired by the $talian espresso bars, Schult' convinced e1ecutives to have Starbucks" stores serve coffee by the cup. ,nd the rest is history2 3he company has seen phenomenal growth from 17 coffee outlets in Seattle almost 14 years back to 45%9 shops in around 6% countries worldwide. Starbucks went public in 199- and has done e1tremely well in turning an everyday beverage into a premium product. 3he green and white mermaid logo is widely recogni'ed7 the brand is defined by not only its products, but also by attitude. Business Weeks most recent survey 86++69 of the top global brands reported Starbucks as one of the fastest growing brands. $t is all about the Starbucks e1perience, the atmosphere and the place that is a refuge for most people to get away from everyday stresses. 3he average customer visits a Starbucks eighteen times in a month and about 1+ percent of all customers visit twice a day. 3hey have created an affinity with customers that is almost cultlike. 3oday, Starbucks is the leading roaster and retailer of specialty coffee in /orth ,merica with more than 1,+++ retail stores in -6 markets. MISSION STATEMENT Starbucks" corporate mission statement is as follows: .;stablish Starbucks as the premier purveyor of the finest coffee in the world, while maintaining our uncompromising principles as we grow. 3he following guiding principles will help us measure the appropriateness of our decisions: 1. #rovide a great work environment and treat each other with respect and dignity. 6. ,pply the highest standards of e1cellence to the purchasing, roasting and fresh delivery of our coffee. -. <. 4. 5. !evelop enthusiastically satisfied customers all of the time. Contribute positively to our communities and our environment. =ecogni'e that profitability is essential to our future success. ;mbrace diversity as an essential component in the way we do business.

Starbucks" corporate ob*ective to is become the most recogni'ed and respected brand of coffee in the world. 3o achieve this goal, Starbucks plans to continue to e1pand its retail operations rapidly in two ways.>irst, to increase its market share in e1isting markets and secondly, to open stores in new markets. Starbucks" retail ob*ective is to become a leading retailer and coffee brand in each of its target markets by selling the first (uality coffees and related products. $n addition, Starbucks provides a superior level of customer service, thereby building a high degree of customer loyalty.

3his case was prepared by ?alerie !arguste, ,na Su, ,i-@in 3u, and #eggy )ei of Stern School of Ausiness at /ew Bork Cniversity and Sonia Detkar of the >o1 School of Ausiness and anagement at 3emple Cniversity under the supervision of #rofessor asaaki Dotabe for class discussion rather than to illustrate either effective or ineffective management of a situation described 86++-9.

SALES & PROFITS Starbucks" net earnings in 199% were E5%.< million, which is a significant increase from the E65.1 million earnings three years earlier. >urthermore, its revenues grew more than twelve times from E1+-.6 million in 1996 to E1.- billion in 199%. 3he increase in revenues and sales was a direct result of the numerous new stores that were opened. !uring this period Starbucks stores grew 4+% percent from 154 stores to over 1,<++. Ay the third (uarter of the year 6++6, sales had increased 6<F over those of the previous year to E6.< billion. 3he company"s stock saw a rise of over 6,6++F in the last decade 8see ;1hibit 19.

COMMITMENT TO COFFEE Starbucks is committed to selling only the finest whole bean coffees and coffee beverages. Currently the fifth largest purchaser of coffee, Starbucks roasts more than thirty varieties of the world"s finest ,rabica coffee beans, therefore the company goes to e1treme lengths to buy the very finest ,rabica coffee beans available on the world market, regardless of price. ,rabica beans have a very refined flavor and contain about 1 percent caffeine by weight. 3hese beans account for 74 percent of the world production, and are sought by specialty roasters. 3o ensure compliance with its rigorous standards, Starbucks is vertically integrated, controlling its coffee sourcing, roasting, and distribution through its company-operated retail stores. $t purchases green coffee beans for its many blends and varieties from coffeeproducing regions throughout the world and custom roasts them to its e1acting standards. Currently, there are three roasting plants in the Cnited States. =oasts that do not meet the company"s rigorous specifications, or beans that remain in bins more than a week, are all donated to charity. Starbucks sells the fresh beans, along with rich-brewed coffees and $talian-style espresso beverages, primarily through its company-operated and licensed stores.

COMMITMENT TO THE COMMUNITY !espite becoming e1tremely profitable, Starbucks has not lost sight of being socially responsible. Starbucks has contributed to C,=;, a nonprofit charity organi'ation for the needy in coffee-growing countries, since 1991. ,s /orth ,merica"s leading corporate sponsor, Starbucks has helped establish health and literacy programs in Guatemala, $ndonesia, Denya, and ;thiopia. 3his long-term charity program has helped improve living conditions in the coffee-producing countries that Starbucks buys from. $t is the company"s way of providing assistance to those developing nations with which it does business. $n addition, in 1995, Starbucks established a Code of Conduct policy, which is the first step in a long-term commitment to improving social conditions in the world"s coffee-growing nations. $n 6++1, the company *oined an organi'ation, 3rans>air, that works for the rights of farmers. 3he efforts of the organi'ation are driven towards ensuring that coffee farmers get a significant part of the amount 8E1.65 a pound9 paid by coffee roasters for coffee beans. ,lso, in 6++6, the company purchased 14+,+++ pounds of coffee beans from a fair-trade Consortium of Coffee Cooperatives of Guanacaste and ontes de Hro in Costa =ica 8CHHC,>;9.

CURRENT SITUATION Coffee consumption in the C.S. has climbed to its highest level in nearly a decade. $n 19%9, there were only 6++ specialty coffee stores in the C.S. 3oday, there are more than 4,+++7 the Specialty Coffee ,ssociation pro*ects 1+,+++ stores by 1999. 3he entire coffee market is estimated to be a E-+ billion industry. $n keeping with its corporate mission, Starbucks is e1panding its retail outlets at an incredible rate. ost recently, Starbucks has entered several new markets including 3oronto, =hode $sland, /orth Carolina, and 3okyo. $n 6++6, there are a total of <,6<7 coffee shops in the Cnited States and Canada. 3oday, three million people a week visit Starbucks.

$n addition to retail operations e1pansion, the company plans to selectively pursue other opportunities to leverage and grow the Starbucks brand through the introduction of new products and the development of new distribution channels 8see ;1hibit 69. Ioint ventures with companies like !reyer"s Grand $ce Cream, $nc., #epsi-Cola, and Capitol =ecords have enabled Starbucks to introduce new product lines into the market. $n 199<, the company entered a *oint venture agreement with #epsi-Cola to develop ready-to-drink coffee products. Ay the spring of 1995, the company launched a new bottled coffee drink called >rappuccinoJ, a low-fat, creamy blend of Starbucks brewed coffee and milk. Hn Hctober -1, 1994, a longterm *oint venture with !reyer"s Grand $ce Cream was announced. 3he *oint venture yielded a premium line of coffee ice creams distributed to leading grocery stores nationwide. 3his line has become the number-one selling super-premium coffee-flavored ice cream in the nation. >inally, *oint ventures with record companies such as Capitol =ecords have enabled Starbucks to sell customi'ed music C!s in its stores. Starbucks specialty sales and marketing team has continued to develop new channels of distribution as the company is growing. $n 1991, the company began selling coffee in departments stores and other places fre(uented by consumers, such as /ordstrom, Aarnes and /oble, etc. $ts plan to become a nationally known brand is being pushed forward by last year"s deal with Cnited ,irlines, which gives Starbucks e1clusive access to 74 million domestic and international travelers. &owever, the company"s goal of e1pansion does not stop at airports. >or two years, Starbucks has been the only coffee brand served in $33 Sheraton Corporate &otels. $n 1995, it also became the coffee of choice in )estin &otels K =esorts. ore recently it formed an alliance with C.S. Hffice #roducts to sell Starbucks coffee to offices throughout the C.S. 3his alliance is a tremendous opportunity for Starbucks to serve the workplace environment, and overall strengthen its customers" relationship with the Starbucks brand. $n 6++1, the company started offering high-speed $nternet access at some of its stores to lure in customers. $t also introduced the Starbucks card that now has over < million activations. >inally, Starbucks wants to grow its direct response and specialty sales operations. Starbucks" direct response group launched a new ,merica Hnline Caffe Starbucks store to sell its products via $nternet. 3hough profits for Starbucks have increased significantly over the years, there is still cause for the company to be worried. Hverall sales are still growing (uickly, but the rate of growth is slowing at e1isting stores. ,nnual sales growth at stores has slid from 19 percent in 199- to 7 percent in 1995. 3he biggest cause of sluggish sales growth is attributed to store cannibali'ation. Starbucks has been known to open stores within one block of each other in hopes of saturating the market. $n addition, growth has also been hurt by poor merchandising efforts that has left many productsLlike mugs and coffee makersLon display for years. INTERNATIONAL EXPANSION )ith a stable business in /orth ,merica, Starbucks plans on e1tensively e1panding abroad. Starbucks" international strategy is to utili'e two e1pansion strategiesLlicensing and *ointventure partnerships. 3he success of e1panding into foreign markets is dependent on Starbucks" ability to find the right local partners to negotiate local regulations and other country-specific issues. Currently, Starbucks e1ists in a few foreign countries in ,sia. 3he company felt that ,sia offered more potential than ;urope. ,ccording to one e1ecutive, .3he region is full of emerging markets. Consumers" disposable income is increasing as their countries" economies grow, and most of all, people are open to )estern lifestyles.0 >inally, coffee consumption growth rates in Southeast ,sia are estimated to increase between 6+ percent to -+ percent a year. )ith this in mind, Starbucks has plans to invest E1+ million in developing its ,sian operations and up to E6+ million with its *oint venture partners in ,sia. Starbucks does not have a roasting plant in ,sia as of yet. $nstead, one shipment of coffee beans arrives in ,sia every other week to supply the company"s shops in Singapore and Iapan. JAPAN

Hn Hctober 64, 1994, Starbucks Coffee $nternational signed a *oint venture agreement with S,M,AB $nc., a Iapanese retailer and restauranteur, to develop Starbucks retail stores in Iapan. 3he *oint venture partnership is called Starbucks Coffee Iapan, @td. 3his alliance proves to be a strong one because it combines two ma*or lifestyle companies that will provide the Iapanese consumer a new and uni(ue specialty coffee e1perience. Cnder this partnership, Starbucks opened its flagship 3okyo store in the upscale Gin'a shopping district in 1995, its first retail store e1pansion outside of /orth ,merica and ;urope. Since then, the number has grown to -5% stores in Iapan. Iapan is an essential part of Starbucks" international e1pansion plan because the nation is the third largest coffee consuming country in the world, behind the C.S. and Germany. Iapan is also an ideal country because it has the largest economy in the #acific =im. !emand for coffee blends in Iapan has doubled in the past five years and specialty blends are the fastest growing segment of the industry. Hne industry analysts said, NN3he Iapanese have taken to coffee like a baby to milk.NN Gourmet coffee accounts for 6.4 percent of the 1.6 billion pounds of coffee bought by Iapan each year. 3he average per capita consumption among gourmet drinkers in 1997 was 1.4 cups a day from more than a half cup in 199+. 3he company picked Iapan for its first big overseas venture because it is the third-largest coffeeconsuming country in the world, but the (uality of its coffee products provides a ma*or opportunity for StarbucksN specialty drinks. Iapanese vending machines, for instance, dispense E 1 billion worth of cold, canned coffee drinks. , similar bottled beverage *ointly produced by Starbucks and #epsi is in the process. Starbucks almost doubled the number of its outlets in 6++1 to 6%9 and it e1pects to open more stores in Iapan. 3he stores offer the same menu as it does in its C.S. stores, although portions are smaller. 3he names of items, such as Otall" and and Ogrande" are also the same as the ones used in the C.S. ,ll of the stores will also feature the company"s trademark decor and logo. $n addition, Iapanese customers are able to purchase Starbucks coffee beans, packaged food, coffee-making e(uipment as well as fresh pastries and sandwiches. Starbucks" Iapanese sales were 64 percent above the originally e1pected sales figures few years back. &owever, as of >all 6++6, same-store sales growth has fallen. Hn opening day, the Iapanese crowded into Starbucks and as many as 6++ customers formed lines around the block to get a taste of Starbucks high (uality coffee. Starbucks hopes to cultivate the same kind of coffee cra'e in Iapan as the one it had created in /orth ,merica. &owever, profits from the Iapanese venture will not happen for several years. Hperating costs, like rent and labor, in Iapan are e1tremely high, and Starbucks will also have to pay for coffee shipment from its roasting facility in Dent to Iapan. =etail space in downtown 3okyo is also more than double that of Seattle"s rent. Starbucks plans to eventually open a roasting plant in Iapan to help keep costs down. &owever, this is contingent if the stores in Iapan prove to be a success.

SINGAPORE ECONOMIC BACKGROUND ,ccording to the 199+ C.S. !epartment of State, Singapore, otherwise known as the @ion State, has an annual growth rate 8199%-in real terms9 of 11 percent. 3he country"s per capita income is E%,7%6, which is the third highest in ,sia after Iapan and Arunei. &owever, Singapore is a country that relies heavily on industry with the industrial sector 8including food and beverages9 making up about 17 percent of Singapore"s real G!#. $t imports about E<< billion in crude oil, machinery, manufactured goods and foodstuff from the C.S., ;uropean Community, alaysia and Iapan. $n addition, Singapore is constantly looking for new products and new markets to drive its e1portled economy. $t is attempting to become a complete business center, offering multinationals, a manufacturing base, a developed financial infrastructure, and e1cellent communications to service region and world markets. &owever, the late 199+s was was not a very good period for Singapore as the country was affected to some e1tent by the ,sian financial crisis. 3he economy grew at an annual rate of %.7F from 199+ to 1995, but has since slowed down significantly. 3he main sector that was hurt by this slow growth was the manufacturing industry, which grew by less than - perrcent, down

from 1+ percent in 1994. $n addition, the commerce sector grew by less than < percent, down from 9 percent in 1994. ,nalysts claim that weak economic growth, global competition, and a very slow tourist season made Singapore"s retail industry very sluggish. 3he restaurants and hotels also recorded weak growth. LIVING IN SINGAPORE Singapore has one of the best living conditions in ,sia. $n 1999, its per capita G/# was C.S. E67,<%+. >urthermore, Singapore is known for its diversity. 3here are -.< million Singaporeans: ethnic Chinese, alays and $ndians make 77 percent, 1< percent, and 7 percent of the population, respectively. 3he most practiced religions are AuddhismP3aoism 84-.9F9, $slam 81<.9F9, Christianity 816.9F9 and &induism 8-.-F9. 3he main languages are alay, Chinese 8 andarin9, 3amil and ;nglish. ;nglish is the language of administration, while alay is the national language. )ith a moderately high cost of living, Singaporeans are able to indulge in lu1ury goods. uch of Singapore"s entertainment is influenced by )estern culture. >or instance, many theaters show Aroadway musicals such as @es iserables and pop concerts like ichael Iackson. 3elevision programs are in ;nglish, Chinese, alay, and 3amil. $n 1996, pay 3? channels such as C//, ovievision, &AH, and Chinese ?ariety were introduced. Singaporeans are known to indulge themselves with food. .So discriminating have the Singaporeans become on the sub*ect of (uality and price that eating has become a national obsession.0 Singapore has an array of restaurants, coffeehouses, fast-food outlets and food centers that are easily accessible and offer a variety of foods at affordable prices. ost of these food places are not air-conditioned e1cept for those located in shopping comple1es. &owever, eating in an air-conditioned restaurant, regardless of income level, is an affordable lu1ury. .3he average lunch or high tea buffet spread offering a wide variety of dishes is available at many hotel coffee houses and restaurants, and it costs about E14 8Singaporean currency9 or more per person. ost restaurants and coffeehouses impose a 1+ percent service charge, but tipping is not encouraged.0 SINGAPORES LOVE AFFAIR WITH COFFEE ,ccording to Singaporean social commentator >rancis Bim, .Coffeehouses are a sign that Singaporeans have achieved the status of a developed nation and we are breaking new ground in the area of becoming a cultured society.0 $n the past during the construction of Singapore, Singaporeans did not have the time to en*oy their cup of Iava. =egardless of their religion and beliefs, Singaporeans went to coffeehouses in the evenings for their meals and drank coffee in order to keep themselves awake. /ow coffee is viewed as a beverage instead of a drink. #eople want to take the time to savor their coffee. $t is not *ust a drink, but a personality altogether. 3he various flavors that coffeehouses offer reflect the different moods as well as taste. 3he first Starbucks coffee outlet in Singapore opened on !ecember 1<, 1995, in @iat 3owers, with the help of AonStar #te. @td., a subsidiary of Aonvests &olding @td., a Singaporean company with food services and real estate interests. 3he store in @iat 3owers is located in Singapore"s main shopping district on Hrchard =oad, which is a very trendy shopping center where the >rench department store, Gallery @afayette, and #lanet &ollywood reside. 3here are plans to open ten to twelve more Starbucks in Singapore within the ne1t year. 3he licensing agreement with Starbucks currently only covers Singapore, but Aonvests hopes to e1pand the franchises into other ,sian markets. Starbucks" e1pansion into Singapore is its first e1pansion into Southeast ,sia. Aonvests &oldings anticipates that the Starbucks retail stores will generate at least E<+ million in sales over the ne1t five to si1 years. Aonvests is an ideal partner for several reasons. Aonvests has ac(uired e1pertise in running food businesses, like the local Aurger Ding chain. 3hey also know and understand the local consumer market, government regulations, and the local real estate market. Starbucks chose Singapore for its entry in the Southeast ,sian market because of the highly .westerni'ed0 ideas and lifestyles it had adopted. Some have described Starbucks as being another ,merican icon, like c!onald"s. Some even say that Starbucks has created an ,merican coffee cult. Slowly, but surely, gourmet coffee bars have been penetrating into the food scene in

Singapore. $t is estimated that Singaporeans drink more than 1+,+++ gourmet cups a day. $n addition, the market in Singapore has tremendous growth potential. ,ccording to Aruce =olph, head of research at Saloman Arothers Singapore #te. @td., .#eople should increasingly focus on Singapore not as a mature market with low earnings and growth potential, but as a uni(uely positioned beachhead to get leverage over what"s happening in ,sia.0 >inally, the Singaporean market still has no clear leader in the specialty coffee industry. 3his means that Starbucks still has a good chance to become one of the top contenders in this market. !espite the opportunities that e1ist for Starbucks in Singapore, there are still obstacles that Starbucks must overcome to be successful in Singapore. Competition is fierce with 1< players and -% stores between them 8see ;1hibit -9. )ith Starbucks" entry into the ,sian market, bigger retail stores, like Suntec !ome &oldings, are already gearing up for a coffee battle. &owever, smaller companies like Aurke"s Cafe and Spinelli are welcoming Starbucks" entry. 3heir strategy is to open an outlet right ne1t to Starbucks to attract the customers that overflow from Starbucks. Hne of Starbucks" biggest competitors, Suntec !ome &oldings, has already established itself in Singapore. Suntec !ome &oldings already has a good name recognition with Suntec )alk, Suntec City, !ome Cafe, and so on. Suntec is distinctive from the other retail coffee stores in that it is seen more as a restaurant than a coffee chain. $t targets a broader market segment with a lower budget range. 3hey are also backed by ma*or supporters with the capital to counter Starbucks" e1pansion strategy. $n addition to Singapore, Suntec !ome &oldings has plans to e1pand to other markets such as alaysia, $ndonesia, 3hailand, &ong Dong, and China. Spinelli, a smaller competitor, also plans to e1pand into the region. )ith these plans of e1pansion having been completed by the year 6+++, Spinelli will be potentially a ma*or threat to Starbucks. ore well-known coffee spots to Singaporeans are Coffee Connection and Coffee Club, which are also direct competitors of Starbucks. 3he customers that go to Coffee Connection and Coffee Club like the atmosphere and the service they receive there. ,s reflected here, Singapore has seen a proliferation of gourmet coffee outlets in the past few years7 therefore, the market is slowly becoming overcrowded. Starbucks will need to turn some heads and create the brand e(uity they need to stay in competition with their competitors. &owever, they do have an advantage entering this market. Starbucks packages a coffee-drinking e1perience that the Singaporeans want, both trendy and ,merican. ,s mentioned earlier, Singaporeans love ,merican products and hopefully, that will translate into ma*or dollars for Starbucks in Singapore. Second, Starbucks faces a challenge in Singapore amid a prolonged and still-deepening crisis in the retail industry. a*or retailers, like Dmart and >rance"s Galeries @afayette, have recently left Singapore after much failure. CHINA $t is probably a tad easier to accelerate the sale of one"s products in a markets where demand already e1ists as compared with a markets that has a large number of potential consumers and an emerging economy but low demand for the product. ,s is the case with China that fits the above description down to it being predominantly tea-consuming and one of the smallest coffee markets in the world. 3hus, when Starbucks inaugurated its first outlet in the )orld 3rade Center in Aei*ing, China in Ianuary 1999, it needed to proceed with less pace than it was used to. 3he company now sells coffee through around <9 outlets that are mostly concentrated in Aei*ing and Shanghai. 3he company has collaborated with different partners for its operations in China. $n Shanghai and &ang'hou, Starbucks has partnered with a unit of the #resident group. 3he #resident group is Starbucks" partner in 3aiwan, where it runs around %+ coffee stores. $n /orth China, the company has partnered with &KQ ,sia #acific and Aei*ing ei !a Coffee. , replication of its stores concept worldwide, Starbucks in China caters mainly to urban working people and thus its outlets are located in commercial areas. ,s regards advertising for the Chinese market, Starbucks depends less on domestic advertising and more on promotion through coupons and visits, which draw first time consumers. &ence, although a challenging task, the company is determined to carve a niche for itself in China"s beverage market.

INDONESIA $n 6++6, Starbucks launched its first coffee store in Iakarta, $ndonesia, after signing a licensing agreement with #3 Sari Coffee $ndonesia. $t is housed on the ground floor of the #la'a $ndonesia, an upscale fashion shopping center and boasts of the familiar Starbucks atmosphere of coffee, conversation and more. 3he company plans to e1pand its operations in $ndonesia based on the response it gets to its first store.

3his case was prepared by ?alerie !arguste, ,na Su, ,i-@in 3u, and #eggy )ei of /ew Bork Cniversity"s Stern School of Ausiness and further revised by Sonia Detkar of 3emple Cniversity under the supervision of #rofessor asaaki Dotabe for class discussion rather than to illustrate either effective or ineffective management of a situation described. 8!ecember 6++69.

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/;3 ;,=/$/GS

Year 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001

Net Revenues (in $million) 103.2 176.5 284.9 465.2 696.5 966.9 1,300.0 1,686.8 2,177.6 2,648.9

Net Earnings (in $million) 4.5 8.3 10.2 26.1 42.1 57.4 68.4 101.6 94.5 181.2

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arch 1994 =eleased Alue /ote Alend coffee and C! *ointly with Capitol =ecords. September 1994 >irst Starbucks retail store opened within an e1isting and newly opened state-of-the-art Star arkets. Hctober 1994 Signed an agreement with S,M,AB $nc., a Iapanese retailer and restaurateur, to form a *oint venture partnership to develop Starbucks retail stores in Iapan. 3he *oint venture was called Starbucks Coffee Iapan, @td. 3he first store opened in 3okyo in the summer of 1995 and marked Starbucks" first retail e1pansion outside of /orth ,merica. Hctober 1994 , long-term *oint venture with !reyer"s Grand $ce Cream was formed to market a premium line of coffee ice creams. /ationwide distribution to leading grocery stores occurred in the spring of 1995. /ovember 1994 >ormed a strategic alliance with Cnited ,irlines to become the e1clusive coffee supplier on every Cnited flight. Ianuary 1995 3he /orth ,merican Coffee #artnership was formed between #epsi-Cola and Starbucks /ew ?enture Company, a wholly-owned subsidiary of Starbucks. 3he partnership announced its plan to market a bottled version of Starbucks" >rappuccinoJ beverage. >ebruary 1995 >ormed an agreement with ,ramark Corp. to put licensed operations at various locations marked by ,ramark. 3he first licensed location opened in the end of 1995. September 1995 $ntroduced !ouble Alack StoutJ, a new dark roasted malt beer with the aromatic and flavorful addition of coffee with the =edhook ,le Arewery. Hctober 1995 >ormed an agreement with C.S. Hffice #roducts Company, a nationwide office products supplier to corporate, commercial and industrial customers. 3he alliance will allow Starbucks to distribute its fresh-roasted coffee and related products to the workplace through C.S. Hffice #roducts" e1tensive /orth ,merican channels. 199% >ormed a *oint venture with $ntel Corp. 3he venture will help push Starbucks into the market of cybercafes. 199% >ormed an alliance with eight companies to enable the gift of over -6+,+++ new books for children through the ,ll Aooks for Children &oliday Aook Auy. 199% ,c(uired Seattle Coffee Company, CD"s leading specialty coffee company.

199%

199%

>ormed a *oint venture with ack Iohnson"s Iohnson !evelopment Corp. to develop Starbucks locations in underserved, inner-city urban neighborhoods. >ormed long-term licensing agreement with Draft >oods to accelerate growth of the Starbucks brand into the grocery channel across the Cnited States.

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S#$/;@@$ Spinelli Coffee Company, long-regarded by many as San >rancisco"s best coffee retailer, has been licensed by ;(uino1 for e1pansion into Southeast ,sia. ;(uino1 is a *oint venture between Golden &arvest, a &ong Dong film company, and Singapore 3echnologies $ndustrial Corp., a Singapore Conglomerate. Seven outlets were opened in Singapore"s central business district by the fall of 1997, with up to forty locations targeted for the region by the year 6+++. $n addition, Spinelli is also in the process of setting up roasting factories to supply the ,sian arket. Spinelli brings to ,sia years of e1perience in sourcing, producing and selling premium coffee drinks and whole bean coffee. SC/3;C !H ; &H@!$/GS !ome CafS is a cafe modeled on ;uropean lines and was discovered by a Singaporean lawyer. $t is best known for its distinctive sidewalk and atrium cafes, where the food menu is longer than the coffee list. 3hey serve light snacks and full meals served all day, from sandwiches made with foccacia 8a flat, $talian bread9 to e1otic entrees like duck and pumpkin risotto. Suntec !ome &oldings was formed in 1995 when Suntec $nvestment, an investment vehicle for a group of &ong Dong tycoons, bought 41 percent stakes in the !ome Chain. =onald @ee and Sebastian Hng, founders of !ome, imported the ;uropean-style !ome concept from ,ustralia. 3hey are e1pecting to increase the numbers of outlets from seven to seventeen within three years, an estimated E7 million is e1pected to be allocated for the e1pansion of outlets. #lans to build more roasting plants to distribute !ome"s coffee in ,sia are to follow, though roasting factories in Singapore and ,ustralia e1ist already. 3heir growth strategy is to e1pand into several ,sian countries, with si1 outlets within two years in alaysia and plans for further e1pansion into $ndonesia, 3hailand, &ong Dong, and China are in the development stage. CH>>;; C@CA ;stablished coffee trading company &iang Die, now si1ty years old, sniffed out the gourmet coffee trend and whipped up its first outlet in &olland ?illage in 1991. 3here are thirty-seven variations, from the humble Dopi Aaba to the spicy, vintage tones of ,ged Dalossi Coffee. 3he best attraction is the $ced ocha ?anillaL acciato coffee and milk topped with vanilla ice cream and a dri''le of chocolate syrup. $n addition, they serve light meals of cakes, salads, sandwiches, and home-made ice cream. CH>>;; CH//;C3$H/ Coffee Connection is the latest, trendier incarnation of Su'uki Coffee &ouse, started in the 19%+s by Sarika Coffee to showcase its Su'uki Coffee #owder. So far it is the mothership of coffee bars, with si1ty-nine different drinks ranging from cool coffee *elly to Aleu ountain Chaser. 3he best attraction is the Cappuccino $talianoLespresso infused with hot milk, topped with a frothy milk cap and dusted lightly with chocolate powder. 3hey also serve ice cream, pasta, pi''a, and foccacia sandwiches. AC=D;"S CH>>;; 3he origins of Aurke"s Coffee started from four Singaporean students who studied in Seattle, liked the espresso bars, and brought back the concept. Aurke"s Coffee is a Seattle-styled cafe, bringing the lifestyle of the #acific /orthwest to Singapore. Aurke has made a name for itself as a friendly and inviting place in the midst of the hustle and bustle of downtown Singapore. 3he store has established a loyal customer base of young professionals who visit the store fre(uently. Aurke"s serve sandwiches, soups, and desserts. 3here are seven basic coffee drinks, plus twelve $talian syrups that you can add on re(uest. 3he best attraction is the ocha >ree'e and &a'elnut @atte.