Starbucks sales miss as virus spike keeps customers at home

Starbucks Corp on Tuesday reported a larger-than-expected fall in quarterly sales as the renewed surge in coronavirus cases in the United States kept customers at home.

The world’s largest coffee chain’s global same-store sales fell 5 percent in its first quarter, which ended Dec. 27, more than analysts’ estimates of a 3.4 percent decline, according to Refinitiv IBES data.

Shares fell slightly in extended trading.

The second wave of COVID-19 infections and accompanying restrictions dented traffic at the coffee chain’s stores, hampering its efforts to boost demand through product launches and new drive-thrus.

Comparable sales declined 6 percent for the Americas region, compared with a 5.2 percent fall expected by analysts.

But in China, Starbucks’ biggest growth market, comparable sales rose 5 percent as the company benefited from the popularity of its rewards program and the return of pre-coronavirus consumer habits.

Customers also spent more money per order, helping to offset fewer transactions.

Starbucks also said Chief Operating Officer Roz Brewer would be leaving the company next month to take a chief executive officer role at another company.

Walgreens Boots Alliance Inc later announced that Brewer would take the helm at the company effective March 15.

For the second quarter, Starbucks said it expects U.S. comparable sales to rise between 5 percent and 10 percent, while in China they were forecast to grow nearly two-fold a year after the pandemic hit the region.

The company did not change its guidance of an expected rebound overall this year, with global comparable sales expected to rise 18 percent to 23 percent in 2021.

Net revenue fell 5 percent to $6.7 billion, missing expectations of $6.93 billion.

The Seattle-based company has been closing some stores, adding drive-thrus to others, remaking some with smaller cafes and building a few with no seating at all as it focuses on expanding to-go options.

Overall, the company opened 278 net new stores in the quarter, for 4 percent year over year growth. It now has 32,938 stores around the world, 51 percent of which are company-operated.

Starbucks also saw coffee lovers return to its Rewards loyalty program, with its count of 90-day active U.S. members increase 15 percent year over year to 21.8 million.

-reuters-

Dunkin' reopens select branches in Metro Manila for delivery

MANILA -- Dunkin' has reopened select branches in Metro Manila to accommodate customers who need their donut and coffee fix amid the enhanced community quarantine.

Through Facebook, Dunkin' has been giving updates on branches that are open for delivery, with orders to be made via GrabFood, LalaFood, and Angkas Food.

The latest announcement came on Monday, which included three branches in Makati and one in Pasay.

In a previous post, Dunkin' said it has reopened a store each in Pasig, Mandaluyong, and Quezon City after closing all of its Metro Manila branches last March. 

An updated list of branches can be found here.

As of Monday, available products for delivery include a pre-packed "assorted barkada bundle" which contains two pieces each of Strawberry Frost, Boston Kreme, Bavarian Filled, Choco Butternut, Choco Nutty Tiramisu, and Quezo Duo donuts.

Customers can also order brewed coffee for eight persons and a ground coffee pouch good for 16 cups.

source: news.abs-cbn.com

Coffee clash brewing in China: startup Luckin takes on Starbucks

BEIJING - When Starbucks came to China two decades ago it promised to open a new store every 15 hours. Now a homegrown rival, Luckin Coffee, plans to build a high tech-driven shop every three and a half hours to dethrone the US giant.

The Chinese upstart is burning through millions of dollars to lure customers with steep discounts, challenging Starbucks' dominance by targeting office workers and students who prefer to have their java on-the-go or delivered to their doorstep.

While Starbucks and British rival Costa Coffee offer lounging spaces for people to work or meet friends, most Luckin outlets are more like "delivery kitchens".

The shops are no bigger than a studio apartment, with no tables, display counters or even cash registers because all payments are made using mobile phones.

Luckin's no-frills approach means consumers pay about a third less for a cup compared to other global brands. A tall-sized latte costs 31 yuan (around $5) at Starbucks, but only 24 yuan at Luckin.

Customers who walk into one of Luckin's blue-and-white outlets need only spend a few minutes there -- to scan a code and pay for their coffee that has been pre-ordered through the company's smartphone app.

"I like the convenience, there are no long queues, or having to sit alone while your coffee is brewed," said Yu Qian, a financial analyst in Beijing. "The coffee itself is a little sweeter, more like the sweet milk tea that is popular in China". 

Luckin's aggressive strategy mirrors tactics used by other Chinese startups that have dislodged Western brands from one of the world's top consumer markets.

"The big advantage for us of having pickup stores versus the big stores is that in terms of rental costs, we pay significantly less than our competitors," Luckin's chief strategy officer, Reinout Schakel, told AFP.

After only a year in business, the company announced plans earlier this month to open 2,500 outlets by the end of the year, which would push its total store strength to 4,500. By comparison, Starbucks has some 3,600 stores across the country.

The US behemoth has an 80 percent stake in China's $3.4 billion coffee shop market, according to research group Euromonitor.

But Schakel sees room for growth.

Chinese consumers currently drink just four to five cups of coffee per year, compared to about 300 cups in neighbouring Japan or South Korea, which were also traditionally tea drinking markets, he said.

China is Starbucks' fastest-growing and second biggest market after the United States. 

Its Reserve Roastery in Shanghai, which opened in late 2017, is the company's biggest store in the world. 

But it was a latecomer to China's huge food delivery industry.

The Seattle-based company partnered with Chinese e-commerce firm Alibaba's delivery service ele.me only after Luckin started eating into its market share in July.

"Our delivery service today covers more than 2,000 stores across 30 cities, within three months of its launch," Derek Ng, communications director for Starbucks China, told AFP.

Competition has also prompted Starbucks to focus on its more upmarket Reserve brand of rarer coffees from around the world, said Hu Yuwan, an analyst at Daxue Consulting in Shanghai.

But the US chain has recently started doing discounts, Hu said, adding the coffee rivalry reminded her of the discount wars between Uber and its local rival Didi Chuxing, which later dislodged the American ride-hailing giant from the Chinese market.

Schakel -- who is also Luckin's chief financial officer -- says the startup can afford to burn money to grab market share over the next few years.

"Are we competing with Starbucks? Probably to some extent. We don't care whether the demand is coming from new coffee drinkers or from Starbucks coffee drinkers," he said.

Luckin's caffeine-fuelled expansion has been funded by investors including Centurium Capital, a private equity fund founded by the former China head of Warburg Pincus, and GIC, Singapore's sovereign wealth fund.

The company raised about $400 million in two rounds of funding last year and says it has been valued at $2.2 billion, making it the first coffee unicorn to come out of China.

Schakel declined to comment on rumours that Luckin was seeking a listing on the Hong Kong stock exchange.

But China's landscape is littered with start-ups that have gone belly-up after bleeding money on discounts and aggressive advertising. 

"Am I worried whether we are going to go down that path? Absolutely not," Schakel said.

"Even if we sell our products at a discount at the right scale (it can) be profitable".

source: news.abs-cbn.com

Starbucks opens first sign language store in US

WASHINGTON - Rebecca Witzofsky, a 20-year-old deaf student at Gallaudet University in Washington, and her hearing friend Nikolas Carapellatti wanted to get a coffee. 

But on Tuesday, Witzofsky finally didn't have to struggle to make her order understood.

US coffee giant Starbucks opened its first "signing store" in the United States in northeast Washington near the campus of Gallaudet, the world's only university with an entire curriculum designed to accommodate the deaf and hard-of-hearing.

At the store, all staff -- most of them deaf or hard-of-hearing themselves -- are required to communicate with customers using sign language. 

The cafe is modeled after a store that opened in Kuala Lumpur, Malaysia in 2016.

At first glance, it doesn't look any different from a regular Starbucks, seen on seemingly every other street corner in the US capital.

Employees wearing black shirts and green aprons emblazoned with the company logo scurry behind the counter to serve hot drinks, cold drinks and pastries to an eager clientele.

But despite the crowd -- perhaps unusually big for mid-morning on a Tuesday -- the cafe enjoyed a surprising calm, probably because most conversations were held in silence.

For Witzofsky, it was a revelation.

"It gives deaf people space off-campus, a place to come to and socialize, eat food with other deaf people and meet other deaf people as well, and the deaf employees," she told AFP.

"When I go to a normal Starbucks, I either talk and hope they can hear me and understand, or I show them my order on my phone," she explained.

"Here, your name appears on a screen, which I really, really like, because when they call my order I don't have to try to hear it -- it's right on the screen."

'SIGN OF THE WEEK' 

The store has other specific features designed to embrace and celebrate deaf culture -- one is the "sign of the week."

Right now, it's for coffee: two closed fists, one on top of the other, rotating in a move that brings to mind a coffee grinder.

There are also special mugs for sale with designs by a deaf artist, and a transcription of how to sign the logo of the store.

Starbucks says the initiative is aimed at bringing diverse communities together. It comes six months after the arrest of two black men in a Philadelphia store that sparked accusations of racism.

The opening got a boost from the presence of Oscar-winning deaf actress Marlee Matlin.

Seated on an outside patio with their coffees, retired couple Albert and Peggy Hlibok said they had come to the store to "intermingle with the hearing world."

"I think it's a wonderful opportunity for all of us," said Peggy, with the help of an interpreter.

"It will teach people not to be afraid to communicate with deaf people. They can see it's just part of who we are, part of our lives, part of the diversity of life."

source: news.abs-cbn.com

It's just Dunkin': Donut chain drops 'Donuts' in name

Dunkin' Donuts on Tuesday said it was rebranding itself to simply "Dunkin" to convey its focus on serving coffee.

The name change, which will take effect in January 2019, was announced during its Global Franchisee Convention on Sept. 25.

“We are bringing the iconic name Dunkin’ to the forefront in a bold way that brings to life how we refill optimism with each cup and bring fun, joy and delight to our customers each and every day," chief marketing officer of Dunkin’ US Tony Weisman said in a statement. 

Dunkin’s US President and CEO David Hoffmann said the new branding is part of the company’s modernization blueprint. 

Although the word will no longer appear in branding and logos, donuts "will remain a significant focus" for the brand, Dunkin' said. 

The company is the No. 1 retailer of donuts in the United States and sells "more than 2.9 billion donuts and Munchkins donut hole treats" globally every year. 

The brand, founded in 1950, has more than 12,600 restaurants in 46 countries worldwide.

source: news.abs-cbn.com

World's 'most beautiful' Starbucks, first in Italy, set to open

MILAN -- US coffee giant Starbucks opens its first branch in Italy on Thursday, with the sprawling Milan "roastery" at the avant-garde of an ambitious plan to conquer the spiritual home of espresso.

The Seattle-based multinational is taking on a mainstay of Italian culture: a thick thimbleful of powerful black liquid served at the bar in cafés throughout the country, 6 billion times a year, according to Italian catering federation FIPE.

Not surprising then that Starbucks, which is well-established elsewhere in Europe, has already delayed its entry into the Italian market, originally planned for early 2017.

Outspoken former CEO Howard Schultz -- who quit the chain in June amid talk that he could run for the White House in 2020 -- has repeatedly said that the company would come to Italy with "humility."

"During my first trip to Milan in 1983, I was captivated by the sense of community I found in the city’s espresso bars – the moments of human connection that passed so freely and genuinely between baristas and their customers," said Schultz, now chairman emeritus after masterminding Starbucks worldwide expansion. 

The company hopes that its 2,300-square-meter (25,000 square foot) Reserve Roastery -- "the most beautiful Starbucks in the world" -- will entice customers in for a new coffee experience.

'THE RIGHT MOMENT'

Matteo Figura of market researchers NPD Group said that Starbucks is entering the Italian market at the right moment.

"At the moment, chains account for only 20 percent of Italy's catering trade, the rest are independent businesses. But chains are expanding rapidly, more than four percent" a year, he told AFP.

The way that Italians consume coffee has also changed a lot in recent years. While previously an espresso was "an opportunity to have an energy 'shot'" consumers today increasingly care more about quality and the experience they can have." 

Starbucks will primarily target millennials between 18 and 34 years old, said Figura, adding that the Italian market has room for both traditional cafés and Starbucks, as they target different consumers.

"Cracking the home of coffee culture is a tough challenge, with many Italians deriding the move as ridiculous," said Alexandre Loeur, an analyst at Euromonitor International.

But "while snobbery might initially prevail, the younger generations are more open to the type of specialty coffee offered by the Seattle based brand," he said.

"If we look at France, another country with a strong coffee culture, millennial consumers are undoubtedly responding well to specialty coffees. We can therefore infer that Starbucks could do well (in Italy), in the medium to long-term."

'COLOSSUS'

"It remains to be seen if they'll get a foothold in Italy," said Alessandro Panzarino, who runs the Cafe Martini, around the corner from the new Starbucks.

He admits to being a little fearful "of this colossus" and expects there to be an initial boom in trade at his new neighbor.

"Then we have to see if people get bored after a while," he said, and if people are happy to spend so much, with a traditional Milanese espresso going for around one euro (one dollar).

Simone Dusi, 35, won't be swayed.

"I really don't like Starbucks coffee," he told AFP. "I like strong coffee (so) absolutely no way to diluted coffee or variants like Frappuccino!"

The company, which had a turnover of 22.4 billion dollars in 2017, has almost 29,000 cafes in 77 countries, including 12,000 in the US and 3,300 in China.

Starbucks plans to close 150 branches in the coming year because of a slowdown in the US market.

source: news.abs-cbn.com

Starbucks joins with Alibaba for China coffee deliveries

SHANGHAI --Starbucks on Thursday announced a partnership with e-commerce giant Alibaba that will give the US coffee giant greater access to China's growing food-delivery market as it faces increased competition from local firms.

The move comes as Seattle-based Starbucks faces a challenge from upstart Chinese company Luckin Coffee, which has expanded aggressively on a strategy based largely on satisfying delivery orders placed by mobile app users.

"We truly believe that this enduring partnership will elevate the coffee culture in China," Starbucks president and CEO Kevin Johnson said at news conference in Shanghai.

Johnson called the tie-up "rocket fuel" for the US company's emerging digital strategy.

Under the arrangement, Starbucks products will be dropped off to customers would be handled by Alibaba's food-delivery unit, Ele.me.

Long a traditionally tea-drinking nation, China is seeing an explosion in coffee consumption and Starbucks has targeted the country as its key market after the United States, and its main source of new growth.

It already has more than 3,400 cafes in more than 140 Chinese cities and has said a new outlet opens every 15 hours in the country.

China's overall market for food and beverage delivery has skyrocketed in recent years, fueled by eager adoption of digital commerce and the rise of delivery start-ups employing vast fleets of low-wage, scooter-mounted couriers.

Chinese restaurants now fill huge volumes of delivery orders, and many new food-and-beverage outlets are being established solely for deliveries.

Until now, however, Starbucks had yet to announce a comprehensive strategy for tapping the mobile market.

But the pressure has been rising since Beijing-based Luckin launched about a year ago.

It has quickly expanded to hundreds of delivery-focused stores, is targeting more than 2,000 outlets by the end of this year, and vows to disrupt what it has called Starbucks' "monopolistic" presence in China.

Johnson declined to specifically address the Luckin challenge when asked, saying the Alibaba partnership was part of broader global retail evolution and that Starbucks "has always had a lot of competition."

Alibaba, founded by entrepreneur Jack Ma, has been a key driver in the Chinese retail sector's transformation toward digitally placed orders and delivery for a range of consumer goods.

Earlier this year, the Hangzhou-based company acquired full ownership of Ele.me, China's leading food-delivery start-up, to improve its positioning in the meal-delivery sector.

source: news.abs-cbn.com

Starbucks sales and profit forecast disappoint, shares drop

Starbucks Corp cut its profit forecast and posted disappointing quarterly results on Thursday, amid a bitter battle with competitors ranging from boutique coffee seller Intelligentsia to lower-price rivals like McDonald's.

Investors, long used to Starbucks exceeding investor expectations, sent shares down 7.3 percent to $50.85 in after-hours trade.

The Seattle-based coffee chain said it now sees long-term earnings per share growth of 12 percent or greater, versus its prior call for growth of 15 percent to 20 percent.

Fourth-quarter revenue missed Wall Street's target after sales at established global cafes gained 2 percent, less than analysts' average target of 3.2 percent, according to Consensus Metrix.

Hurricanes Harvey and Irma battered same-store sales at more than 1,100 US cafes. Sales at mainstay US cafes were down 2 percent for the quarter that ended October 1, excluding the hurricane impacts, they would have been up 3 percent - still just short of analysts' estimate.

Analysts have warned that the Seattle-based company is being "middled" by rising competition on the value and quality fronts and that it must bolster sales of higher-priced specialty drinks and breakfast sandwiches.

Chief Executive Kevin Johnson told Reuters in an interview that there was no evidence Starbucks was being hit by competition. "We are not going to be squeezed in the middle," he said.

Johnson noted that US restaurants in general are seeing declining traffic and said that the one area where the company has seen softness is in the afternoons, particularly with regard to sales of its blended beverages such as frappuccinos.

Still, US convenience stores and fast-food chains are improving quality and pricing aggressively.

McDonald's Corp recently expanded its McCafe menu with new macchiatos and lattes and is selling small McCafe espresso drinks for $2. Elsewhere, Dunkin' Brands Group Inc is offering special deals on breakfast sandwiches in its bid to win breakfast.

At the same time, upscale craft coffee rivals like Nestle SA's Blue Bottle and Intelligentsia are opening more shops.

The number of competing coffee shops within one mile of Starbucks shops in several large US markets has increased in recent years, BMO Capital Markets analyst Andrew Strelzik said in a note before the earnings.

Adding to the pressure, Strelzik said, Starbucks continues to build its own US stores at the risk of cannibalizing sales.

Johnson, who succeeded Starbucks co-founder Howard Schultz as chief executive in April, is under pressure to continue serving up the kind of growth that Wall Street has come to expect from the world's biggest coffee chain.

In the last 12 months, Starbucks shares are up about 4 percent, while the S&P 500 index is up more 20 percent.

Starbucks' stock has been trading at a price-to-earnings ratio of 27.8, slightly above McDonald's and Dunkin' Brands, but well below the 52.74 ratio for Chipotle Mexican Grill Inc , according to Thomson Reuters data.

Total net revenue decreased 0.2 percent to $5.70 billion, compared with analysts' revenue target of $5.80 billion, according to Thomson Reuters I/B/E/S.

Net income attributable to the company fell to $788.5 million, or 54 cents per share, in the latest quarter, from $801 million, or 54 cents per share, a year earlier.

Excluding items, it earned 55 cents per share, in line with Wall Street targets.

Starbucks in the third quarter of 2016 changed the basis of its loyalty program to dollars spent from number of orders because customers were buying items individually to get more points. Traffic statistics fell when customers resumed ordering items together.

Labor pressure is also heating up.

Starbucks has been adding working hours at some US stores to ease backups caused by a flood of mobile orders. Meanwhile, cities and states are boosting the minimum wage and a tightening labor market is forcing some chains to increase pay and benefits to recruit and retain workers.

Same-store sales from China were up 8 percent, but the broader China and Asia Pacific region posted a rise of 2 percent, versus expectations of 3.2 percent.

source: news.abs-cbn.com

Starbucks shuts online store, bucks shift to e-commerce

NEW YORK - Starbucks, bucking a retailer trend focused on beefing up company-owned online stores, has shut its e-commerce site for the United States in an effort to drive more traffic to stores.

Since Sunday, shoppers on the coffee chain's online store (store.starbucks.com) are being directed to set up an online account for pickup up at local Starbucks stores for drink, coffee beans and equipment orders.


"We cannot guarantee availability of any product in stores, but we know you will find many choices to enjoy," the company said.

The move comes amid a retail industry shakeout as the rise of e-commerce pressures most brick-and-mortar retailers and threatens hundreds of shopping malls around the country.

Most retailers are building up direct selling to consumers, a strategy also taken by brands such as Nike that are emphasizing e-commerce as more traditional distribution outlets struggle.

Starbucks has said it is also committed to strengthening its digital bond with consumers amid a "seismic shift" in retail, chief executive Kevin Johnson said in July. Efforts include revamping and expanding its frequent-users rewards program and improving the Starbucks smartphone app.

However, Johnson said commercial partnerships with third party digital companies will make more sense in some cases.

Starbucks products will still be available on Amazon and other online stores, said R.J. Hottovy, an analyst at Morningstar.

"They know that they're probably better off focusing on their stores as opposed to running their own online business," Hottovy said. "You're just going to continue to partner with other online platforms."

source: news.abs-cbn.com

Coffee rivals square off in Italy ahead of Starbucks invasion

MILAN - Two of Italy's biggest coffee houses are reinforcing their brands with flagship cafes in Milan near the spot where U.S. rival Starbucks is set to begin an invasion next year.

Lavazza opens its first flagship cafe in the coffee-obsessed city on Tuesday, not far from the renovated 19th century palazzo where Starbucks will open its first Italian store, a 'Reserve Roasteries' outlet offering specialty blends and fine food.

Another top Italian brand, illycaffe, opened its own luxury cafe close to the Starbucks site in May, in a cozy courtyard in Milan's most fashionable street.

Lavazza, which is opening near the city's famous La Scala opera house, and illycaffe both deny their moves are a response to a global rival's impending arrival, a first step in what may become a 200-store expansion.

Industry experts suspect it is no coincidence.

"Lavazza and illycaffe are the purists of coffee, they want to show they are there when Starbucks arrives," says Jean-Paul Gaillard, who ran Nespresso for 10 years before founding the Ethical Coffee Company, a Swiss firm selling coffee pods.

Milan's battle of the coffee palaces reflects global competition among major brands to capture a growing market for people who are prepared to pay a premium for quality espresso coffees in upmarket boutique cafes.

Nestle last week bought California-based Blue Bottle Coffee, one of the top boutique U.S. chains whose single-origin and cold-brewed coffees have proven popular with hipsters and have made inroads into the Starbucks franchise.

JAB Holdings, the investment vehicle of Germany's Reimann family, has also been buying up independent start-ups selling premium brews around the world, from Europe to the Americas.

Starbucks Chief Executive Howard Schultz hopes his company's arrival in Milan, which he calls the home of the "perfect espresso", and the inspiration for his Starbucks vision, will show discerning Italian coffee-lovers that "we got it right".

"We are happy to hear about Lavazza's growth," said a Starbucks spokesman when asked to comment on Lavazza's opening.

The U.S. chain will open its 2,400-square-meter cafe in late 2018, seeking to attract tourists, young Italians and the business crowd. If the Milan experiment succeeds, Starbucks and its local partner, Antonio Percassi, could open more than 200 stores in Italy over six years, according to Percassi.

Some analysts are skeptical that Starbucks can crack a market where espresso typically sells for just one euro ($1.20), a fraction of the price of a Starbucks coffee.

But the local brands are also gambling Italians will spend much more than one euro for a restaurant-style experience: illycaffe charges around three times that for coffee brought to the table.

Nestle, JAB Holdings and Starbucks are the three largest players in the global coffee market, followed by several mid-tier players including Lavazza and illycaffe.

"As the biggest get bigger, mid-tier companies are in a position where they must either expand or risk being left behind or swallowed up by their massive rivals," said Matthew Berry, an analyst at market research firm Euromonitor International.

Lavazza's chief executive and some of its family owners will cut a ribbon to launch their cafe, where customers can sip a blend of coffee specifically crafted for the store, taste gourmet food and buy single-origin coffees.

"The opening of the new flagship store has nothing to do with Starbucks," a Lavazza spokeswoman said, adding that it was solely aimed at giving people an exclusive Lavazza experience.

The group is primarily a roaster and supplier to independent cafes and restaurants rather than a retailer and its new store is a way of boosting brand visibility on the high street.

Lavazza went on an acquisition spree three years ago, buying up three coffee suppliers in Europe and Canada, boosting sales to nearly 2 billion euros last year. It has overtaken Starbucks in supermarket sales, Euromonitor International says.

Illycaffe sells its coffee both through independent cafes and 230 mono-brand stores, some of them directly owned, in 43 countries, and says it wants to develop the network further, though not via major acquisitions.

"The new store wants to be a landmark for the global nomad in search for the real Italian lifestyle experience," illycaffe said, without commenting on the arrival of Starbucks.

Milanese coffee society is divided on whether Starbucks can make its name at the high-end of Italian market, the world's fourth-largest coffee consumer.

"I am curious about Starbucks, I will give it a try when it arrives in Milan," office worker Giuseppe Gaggiano, 55, said at a small, upmarket independent cafe close to the Starbucks site.

However, another customer there, Alberto Paparusso, 31, said he wouldn't abandon his usual cafe: "I don't like Starbucks coffee. It's not worth going there."

(Additional reporting by Silke Koltrowitz in Zurich and Lisa Baertlein in Los Angeles, Editing by Mark Bendeich and Philippa Fletcher)

source: news.abs-cbn.com

Starbucks takes full control of China stores in $1.3-B deal

US coffee chain Starbucks has announced it will take full control of its mainland China outlets in a $1.3 billion deal, the largest single acquisition in the company's history.

It will buy the remaining 50 percent of its East China joint venture from Taiwan's food and beverage giant Uni-President, according to a company statement issued Thursday.

Starbucks will gain full control of 1,300 stores in 25 cities, including commercial hub Shanghai, from Uni-President Enterprises and a subsidiary, the statement said.

Starbucks has seen rapid expansion in China, where it opened its first cafe 17 years ago. By 2011, the company had 400 outlets while today it has nearly 600 in Shanghai alone.

Kevin Johnson, Starbucks chief executive, described the move as "a critical next step" that can help fulfill its goal of almost doubling the number of its mainland outlets to 5,000 from the current 2,800.

"Unifying the Starbucks business under a full company-operated structure in China reinforces our commitment to the market," Johnson said in the statement.

Chairman Howard Schultz, who stepped aside as Starbucks chief executive earlier this year, has said that China could one day become the chain's largest market, overtaking the US where it has some 7,500 stores.

The move comes as the US coffee giant saw a 8.3 percent drop in net earnings on the year, to $691.6 million, for the third quarter ended on July 2, according to its earnings report.

The company plans to close 379 Teavana tea shops due to poor performance, it said.

The Seattle-based firm also said it will fully license its Taiwan market operations, selling 50 percent of its Taiwan joint venture President Starbucks Coffee for $175 million to Uni-President.

Starbucks fully licensed its Macau and Hong Kong stores in 2011.

The new deals are expected to be closed by early 2018 and are subject to regulatory approvals.

source: news.abs-cbn.com

3 cups of coffee a day keep the doctor away, studies say

Coffee addicts and aficionados often say drinking the bitter liquid makes life worth living, but the habit may also help them live longer, according to two major international studies Monday.

Experts cautioned, however, that the US and European reports, published in the Annals of Internal Medicine, failed to show that coffee was truly the reason that many drinkers appeared to have longer lives.

Rather, the studies were observational in nature, meaning they showed an association between coffee-drinking and a propensity toward longevity, but stopped short of proving cause and effect.

The first study, led by the International Agency for Research on Cancer (IARC) and Imperial College London, examined more than half a million people across 10 countries in Europe.

Those who drank about three cups a day tended to live longer than non-coffee drinkers, said the study, which researchers described as the largest analysis of the effects of coffee-drinking in a European population.

"We found that higher coffee consumption was associated with a lower risk of death from any cause, and specifically for circulatory diseases, and digestive diseases," said lead author Marc Gunter of the IARC, formerly at Imperial's School of Public Health.

"Importantly, these results were similar across all of the 10 European countries, with variable coffee drinking habits and customs."

The second study included more than 180,000 participants of various ethnic backgrounds in the United States.

It found benefits to longevity whether the coffee was caffeinated or decaffeinated.

Coffee drinkers had a lower risk of death due to heart disease, cancer, stroke, diabetes, and respiratory and kidney disease.

Those who drank one cup a day were 12 percent less likely to die compared to those who didn't drink coffee.

Those who drank two or three cups per day saw an even higher 18 percent reduced risk of death.

"We cannot say drinking coffee will prolong your life, but we see an association," said lead author Veronica Setiawan, an associate professor of preventive medicine at the Keck School of Medicine of University of Southern California.

"If you like to drink coffee, drink up! If you're not a coffee drinker, then you need to consider if you should start."

A revered drink

Coffee is one of the most popular drinks in the world. Some 2.25 billion cups are consumed every day.

Many prior studies have hailed the benefits of coffee-drinking, saying the beverage imparts anti-oxidants, may improve liver function and reduce inflammation.

But coffee may carry risks for some people, and pregnant woman and children are urged to avoid caffeine, which can be fatal in high doses.

A report from the IARC last year that said drinking very hot beverages -- coffee, tea or otherwise -- is one probable cause of cancer of the esophagus, the tube that runs from the throat to the stomach.

Experts urge caution

Experts who were not involved in the latest studies urged caution in interpreting the results.

For instance, the European study excluded people who had cancer, heart disease or diabetes, meaning it took a measure of people over 35 who were already generally healthy.

It also asked about coffee consumption just once, at the beginning, and did not update this figure over the span of the study, which included an average follow-up time of 16 years.

Finally, it found signs of a link between women who drank large amounts of coffee and a higher risk of cancer death, but downplayed this finding, saying it "may be spurious."

The "conclusions will not lead me to start drinking coffee or to recommend people drink more coffee as a way to lessen their risks for heart disease," said Naveed Sattar, professor of metabolic medicine at the University of Glasgow.

"I remain unconvinced that the link between coffee and heart disease represents a true cause and effect relationship and that coffee is truly protective, regardless of how large a study suggests this."

Sattar said that one downside to the research is the fact that many people stop drinking coffee -- or drink less of it -- when they are ill, a "bias is very hard to fully overcome."

David Spiegelhalter, a professor at the University of Cambridge, described the research as "huge in size and carefully done," but nevertheless unable to prove cause and effect.

"If these estimated reductions in all-cause mortality really are causal, then an extra cup of coffee every day would on average extend the life of a man by around three months, and a woman by around a month," he added.

"So perhaps we should relax and enjoy it."

source: news.abs-cbn.com

Korean barista wows fans with latte art

SEOUL - South Korean barista Lee Kang-bin is taking coffee art to the next level, creating miniature imitations of famous paintings on foamy cups of java at his central Seoul cafe.

With meticulous strokes of tiny brushes and spoons, Lee, 26, recreates the likes of Vincent van Gogh's "The Starry Night" and Edvard Munch's "The Scream" using thick cream stained with food coloring atop a cup of coffee.

The result of the painstaking 15-minute process is a 10,000 won ($8.71) cup of cold coffee that has won Lee thousands of fans at his cafe and online.

"One time I drew 'The Starry Night' and it looked so special as the famous painting placed on top of coffee. After that, lots of people ordered that coffee," Lee said, as he copied the painting off an image on his smartphone.

"Customers usually ask me to draw their favorite art works," he added.

On his Instagram profile where he regularly posts images and videos of his so-called "creamart," Lee says he has never learned to draw. He started brewing coffee at age 17, during his mandatory military service and enjoyed it so much that he bought a coffee machine and opened his first cafe for fellow soldiers in his camp near the border with North Korea.

Customers at his cafe are delighted with Lee's art, which ranges from intricate paintings to cheeky recreations of Disney cartoon characters like Aladdin and Bambi.

"I heard (on TV) that this barista draws these kinds of famous paintings. I think he has very talented hands," said Kim Su-Kyung, a 24-year-old university student who recently visited Lee's store, named "Cafe C. Through."

South Korea's per capita coffee consumption has nearly doubled since 1990 to 2.3 kg per person, according to the International Coffee Organization - still roughly half the 4.5 kg that Americans consume.

source: news.abs-cbn.com

LOOK: Coffee shop on wheels brewing in Iloilo City

ILOILO CITY -- The first-ever mobile coffee shop in Iloilo City has been conquering the city streets since last year.

The Cafe Nativa Mobile Coffee cart runs on three wheels, and can basically go anywhere in the city. It is usually spotted at the bike lane along Iloilo Diversion Road and near the BPOs. 

According to its barista, they often receive requests from clients through their Facebook page. Some BPO employees and even students would ask them to go to their office or schools.

Aside from coffee, Cafe Nativa also serves cold drinks and teas. The cart has a built-in burner, coffee grinder and coffee filter. Customers can actually see how their cup of coffee is prepared.

source: news.abs-cbn.com

Starbucks CEO Schultz to step aside, stay as chairman

NEW YORK - Howard Schultz, the charismatic head of Starbucks, will step aside as CEO next year, turning a major page in the history of a company he built into an iconic global brand.

Having led the company's rise from a sleepy Seattle chain into the world's biggest coffee business, Schultz will stay on as executive chairman and chairman of the board, the coffee giant said Thursday in a surprise announcement that sent the share price down after hours.

The change will take effect April 3.

Schultz will hand the reins to president and chief operating officer Kevin Johnson, a close friend who was tapped as number two at the company in 2015 and has been a Starbucks board member since 2009.

The move comes as the firm faces an increasingly crowded market for higher-quality retail coffee shops and seeks to bolster foot traffic.

Schultz will devote his time to developing high-end superpremium coffee shops around the world known as Starbucks Reserve Roasteries, the company said in a statement.

It plans to open 20 to 30 outlets in the coming years.

"I will be here full-time," Schultz told a conference call with analysts. "I am not leaving the company, I am here day to day."

NEW INITIATIVE

Schultz, who joined Starbucks in 1982 as a sales manager, is considered the driving force behind the worldwide success of the coffee chain begun in 1971.

He briefly left in 1986 following a dispute with the then-owners to set up his own company, Il Giornale, before buying out their shares in 1987 with support from local small investors.

Starbucks now operates more than 25,000 stores in more than 75 countries, with a turnover of around $20 billion in fiscal year 2015.

Schultz, 63, told The Wall Street Journal on Thursday that the company's new initiative would help maintain in-person sales as consumers increasingly move to online shopping rather than visiting malls, where many Starbucks outlets are located.

"I don't have any time horizon that would limit my engagement in the company," he said. "This gives me the entrepreneurial freedom to do what I think I do best."

Incoming CEO Johnson is a tech industry veteran, having spent 16 years at Microsoft and five as CEO of the networking equipment company Juniper Networks.

Prior to the announcement, the company's share price closed up 0.9 percent in New York but fell 3.35 percent in after-hours trading to $56.55 at 2250 GMT.

SOCIALLY RESPONSIBLE
Schultz is outspoken about social issues such as gay rights and gun violence and has worked to make Starbucks socially responsible.

The company increased the base salaries of its US employees by 5 percent in July after they expressed concerns about the effect new software enabling customers to place orders on their smartphones would have on jobs.

The company has also opened outlets in poor areas and supported initiatives against racism.

Schultz is close to the Democratic former presidential candidate Hillary Clinton, whom he supported during the election campaign. But he has dismissed persistent rumors he would run for office himself. Many, including some of his friends, have said he may run for president in four years.

He steps down as Starbucks goes ahead with plans to double the number of its stores in China over five years.

But it has run afoul of European regulators, one of several major US companies the European Commission accused of having received illegal tax benefits from Ireland.

In October 2015, the commission also ordered Starbucks to repay up to 30 million euros ($33 million) in the Netherlands, saying tax breaks there amounted to unlawful state aid.

The Dutch authorities are fighting the decision.

Schultz has sought to step away from running Starbucks before.

The Wall Street darling became the company's chairman in 2000 before returning as chief executive in 2008 with the onset of the global financial crisis.

Shares worth $10 at that time climbed to a record high of more than $60 by the end of last year.

source: news.abs-cbn.com

LOOK: Cafe serves Pokemon-themed latte art

MANILA – Gotta drink ‘em all!

Local café Refinery is letting customers enjoy a latte featuring Pokemon characters such as fan favorite Pikachu. Coffee prices range from P140 to P160 per cup.

On top of this, Refinery’s branch in Rockwell, Makati is also a Pokemon Gym. The café also has a branch in Greenhills, San Juan.

Pokemon Go was launched in the Philippines early this month, causing people to flock to public places as they attempt to catch as many virtual creatures as they can.

Various establishments in Metro Manila and beyond have embraced the Pokemon Go fever, giving away prizes to players who share their in-store run-ins in social media.

source: www.abs-cbnnews.com

Starbucks announces Nespresso pod deal, new loyalty perks

SEATTLE/LOS ANGELES - Starbucks Corp. said on Wednesday it will sell espresso pods for Nestle SA's popular Nespresso home brewers in Europe and unveil a new way for customers to earn loyalty points for free food and drinks outside its cafes.

Nespresso is the most popular single-cup brewer in Europe, and Starbucks' espresso deal marks the company's debut on that machine.

Starbucks also said Keurig Green Mountain, which was purchased by an investor group led by Germany's Joh. A. Benckiser Holding Co (JAB) in March, will continue to supply Starbucks K-cups for Keurig brewers. The company this summer will begin selling latte products for Keurig machines in the United States, where that brewer dominates.

Starbucks, which is hosting its annual meeting in Seattle, also said it would begin selling bottled cold-brew coffee in the United States this summer and Teavana tea brand products in Asia and Europe by this autumn.

The company, which recently changed its loyalty program so that users earn redeemable points based on dollars spent rather than single transactions, said it would roll out a prepaid rewards card from Visa before the end of 2016. That card will allow customers to earn loyalty points on purchases outside its stores.

Shares in Starbucks closed down 0.6 percent at $58.83 on the Nasdaq.

source: www.abs-cbnnews.com

Philippine coffee company goes digital

President and CEO of coffee retailer Bo's Coffee, Steve Benitez, said he is keen on managing the two so-called "D-words" in business: digital and disruption.

The company is set to penetrate the digital market this year. In the meantime, Benitez said one of the things that could disrupt business is the emergence of the "do-it-yourself" or DIY phenomenon.

Benitez said the best way to manage this emergence is to create a platform that integrates technology with the whole DIY concept.

"I think that if you can integrate that with digital platform, that would be great. But right now we're still working on that," Benitez said.

"We are launching our digital platform this year to give more, again, creation of value to customer experience, hoping they can use it for a loyalty programs and payment gateway," he said.

Meanwhile, Benitez attributed Bo's Coffee's success to its homegrown branding, its global bench-marking, and social entrepreneurship.

Bo's Coffee has the second largest branch network in the Philippines next to Starbucks, with 71 branches nationwide.

The company is targeting to build 100 stores by the end of 2016, marking its 20th year in the coffee industry.

source: www.abs-cbnnews.com

Starbucks says aims to open 500 new stores in China in 2016

HONG KONG - Starbucks Corp., the world's largest coffee chain, said on Tuesday it aims to open 500 stores in China this year, shrugging off a slowdown in the world's second-largest economy that has hit global retailers.

Starbucks executives have said they have not seen a systemic slowdown in China, even as the country's cooling economy has been blamed for soft results by the likes of KFC and Pizza Hut parent Yum Brands.

The company said in a statement it aims to create 10,000 jobs in China every year through 2019 as it continues to expand in its largest market outside the United States.

source: www.abs-cbnnews.com

Coffee-drinkers less likely to die from certain diseases

People who report drinking three to five cups of coffee per day are less likely to die prematurely from heart disease, suicide, diabetes or Parkinson's disease, US researchers said.

Both caffeinated and decaffeinated coffee were shown to have benefits, said the study by researchers at the Harvard University Chan School of Public Health published in the November 16 edition of the journal Circulation.

The study compared people who don't drink coffee, or drank less than two cups daily, to those who reported drinking "moderate" amounts of coffee, or up to five cups daily.

The study did not prove a cause-and-effect for coffee and the reduced likelihood of certain diseases, but uncovered an apparent link that aligns with previous research, and that scientists would like to probe further.

"Bioactive compounds in coffee reduce insulin resistance and systematic inflammation," said first author Ming Ding, a doctoral student in the Department of Nutrition.

"That could explain some of our findings. However, more studies are needed to investigate the biological mechanisms producing these effects."

No protective effect was found against cancer in this study. Some previous research has pointed to a link between coffee consumption and a lower risk of certain cancers.

The study was based on data gathered from three large, ongoing surveys including some 300,000 nurses and other health professionals who agree to answer questionnaires about their own medical conditions and habits at regular intervals over the course of 30 years.

"In the whole study population, moderate coffee consumption was associated with reduced risk of death from cardiovascular disease, diabetes, neurological diseases such as Parkinson's disease, and suicide," said the findings.

Researchers also accounted for potential confounding factors such as smoking, body mass index, exercise, alcohol consumption, and diet. But the fact that the research relied on surveys, which use self-reported behavior, could raise questions about its reliability.

And experts warned that coffee -- a substance adored by many devotees -- may not be right for everyone.

"Regular consumption of coffee can be included as part of a healthy, balanced diet," said senior author Frank Hu, professor of nutrition and epidemiology at Harvard.

"However, certain populations such as pregnant women and children should be cautious about high caffeine intake from coffee or other beverages."

source: www.abs-cbnnews.com