Johannesburg - Local caffeine junkies are in for a treat as the world’s largest speciality coffee roster, Starbucks Coffee Company, plans to expand its footprint in sub-Saharan Africa.
Starbucks was scheduled to open a coffee shop in Johannesburg in the first half of next year with more stores expected to open in the future, it was announced on Tuesday.
Taste Holdings, the owners of Domino’s and Scooters Pizza, are bringing the international brand to South Africa through an exclusive licensed partnership. Taste owns the exclusive rights to develop Starbucks retail outlets in the country.
The share price surged as much as 26 percent on the JSE to R5.25 following news of the partnership. By the close of trade, Taste’s share price was up 19.66 percent at R4.99.
Starbucks and Taste Holdings will design and build stores serving the entire Starbucks range alongside its advanced digital offering for customers, including free wi-fi.
Starbucks, which has 22 000 locations, already has a presence in Africa in Egypt and Morocco.
The group is hoping that consumers will be familiar with the brand as a result of US movies and other media.
Kris Engskov, the president of Starbucks Europe, the Middle East and Africa, said the company would open full-format stores bringing the entire range of its food and beverages, including its Arabica coffee, to local consumers.
“The coffee market here is vibrant and growing fast – we want to be part of that growth, bringing the passion and energy of this remarkable country into the design of our first store and… barista team,” he added.
Starbucks is the latest US fast food brand to open its doors in South Africa after Burger King launched its first store last year.
Taste chief executive Carlo Gonzaga said the company was hoping to benefit from the growing number of coffee houses in recent years. “Five years ago there were 1 000 less outlets than what we are seeing today. We think that Starbucks will be well received.”
Starbucks sources a considerable amount of its global coffee from nine African countries, in partnership with a network of farmer support and agronomy centres in Ethiopia, Rwanda and Tanzania.
“We are proud to be able to offer some of the best African coffees in the world to more customers in the region.
“We’re looking forward to bringing the entire Starbucks experience to South Africa for the first time. That includes 100 percent ethically sourced Arabica coffee, Starbucks full menu offering and of course beautiful coffee houses,” Gonzaga said.
Starbucks supports the development of local suppliers and is committed to its Changing Lanes programme, in which it provides employment to previously unemployed people and exposes them to global training initiatives and skills.
“Overall we’re a good partnership match,” Gonzaga said.
The partnership will see direct job creation opportunities as each Starbucks store opens, in addition to opportunities at the Taste support office in Johannesburg.
Taste expects the indirect impact of skills transfer into South Africa, and the localisation opportunities in the supply chain, will be material.
“Young people are the key to our success. The majority of our workforce is aged between 17 and 25, so talented youth has always been a priority and we will equip our new partners with the skills necessary to succeed in today’s economy,” Engskov said. “We look forward… to (leveraging) Taste’s strong track record of creating jobs and developing great people.”
FAST FACTS
Starbucks
* Started in 1971, it is the largest specialty coffee roaster and retailer in the world.
* Its first shop was a single store in Seattle, US.
* It now has more than 22 000 coffee shops in more than 66 countries.
* The Starbucks name was inspired by Moby Dick and evoked the romance of the high seas and the seafaring tradition of the early coffee traders. Moby Dick is about the quest of Ahab, the captain of the whaling ship Pequod, for revenge on Moby Dick, a white whale which on a previous voyage destroyed Ahab’s ship and severed his leg at the knee. Starbuck is the Pequod’s chief mate.
Taste
* JSE-listed Taste has the exclusive rights to develop Starbucks Coffee in South Africa.
* Among others brands it operates Domino’s Pizza, the world’s largest pizza delivery brand with more than 11 700 outlets in 75 countries.
* Taste has a 30-year master licence agreement to develop the Domino’s brand in South Africa and seven African countries.
* Other brands in Taste’s portfolio include NWJ, Maxi’s, The Fish & Chip Company, and Arthur Kaplan and World’s Finest Watches.
* Luigi Gonzaga and his son the current Taste chief executive Carlo Gonzaga co-founded Scooters Pizza in 2000, which was the founding brand, to become one of the largest South African based franchise groups.
Business Report