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Friday, March 24, 2023

Starbucks Bucks Its Way Into Central America

If you’re running out the door in the morning in North America without having your morning coffee, there’s no need to worry; Starbucks is there.

With more than 16,000 international locations, including over 11,000 U.S. cafés, it seems Starbucks is, well, everywhere. You can find Starbucks coffee shops on street corners, in shopping malls, in grocery stores, in movie theaters and even right across the street from another Starbucks on the same intersection. Of the many comedians who have joked about the coffee chain, some have quipped that you can find a Starbucks inside a Starbucks.

And soon, Starbucks coffee shops will be found in Central America.

On Aug. 16, the mega coffee chain announ-ced that it will open its first Central American location in San Salvador before the end of the year. While Starbucks has been unforthcoming about its specific regional plans, it appears the San Salvador location will be the first of many possible Central American cafés.

“We are proud to introduce Starbucks coffee and the unique Starbucks experience to customers in Central America,” Pablo Arizmendi-Kalb, vice president and general manager of Starbucks Latin America, said in a press release. “El Salvador will provide Starbucks with a strong platform to further expand across Central America. We have great confidence that we can share in the coffee passion and tradition inherent to this region.”

The San Salvador Starbucks will be operated by Corporación de Franquicias Americanas, one of Central America’s larger multibrand franchise operators, which also has assisted with expansion of other U.S. chain restaurants such as Pizza Hut, KFC, Wendy’s and China Wok.

At present, Starbucks has locations in 53 countries, including the Latin American nations of Mexico, Argentina, Peru, Brazil and Chile.

The number of Central American countries Starbucks will enter remains to be seen. A Starbucks representative told The Tico Times in an e-mail that “Starbucks does not disclose future store targets,” though the company is “very excited by the opportunities presented in Central America.”

While Starbucks has purchased and sold Central American and Costa Rican coffee for more than 20 years, it has never been considered a direct competitor in the regional market. If the circular green Starbucks logo begins popping up throughout Central America, however, that would most certainly change.

“This is part of the famous globalization that we are seeing in the world,” said Edgar Rojas, executive director of the Coffee Institute of Costa Rica (ICAFE). “While they are obviously a big name brand and strong competitor, we consider that their arrival will provide consumers more options for quality coffee. If there are better products and higher-quality coffees in the market, there will be more attention in the national market. The more attention we generate for having quality coffee, the better the condition of our market.”

While the first Starbucks in Central America will be in El Salvador, expansion into the rest of the isthmus remains un-defined. Despite the possible arrival of the Starbucks name, most local coffee distributors seem relatively unconcerned with the chain’s potential entry into the market.

“Starbucks has been announcing that they are going to have cafés in Central America for about eight years,” said Steve Aronson, president and founder of Café Britt. “As for how they affect us, Café Britt operates in Costa Rica and Peru. In Peru, Starbucks has quite a large presence in coffee shops, and we haven’t noticed that it makes very much difference. People love Café Britt there, and it hasn’t affected demand.”

But as Starbucks continues to succeed, expansion seems imminent. In the second quarter of this year, Starbucks reported revenues of $2.6 billion, an 8.7 percent increase compared to the same quarter in 2009. A good portion of the improved sales has been attributed to the popularity of the VIA Ready Brew, the company’s instant-coffee brand, which has exceeded $100 million in sales since being introduced a year ago.

Starbucks also will bring its famed gourmet coffee drinks, including seasonal favorites such as the Peppermint Mocha, Pumpkin Spice Latte and Gingerbread Latte. The cafés also will import the chic, sleek Starbucks ambience with trendy music and ergonomically pleasing seating and workstations. Should Starbucks secure a foothold in Central America, it might be able to carve out a niche in a region unaccustomed to cafés of its kind.

“Starbucks definitely has created a niche with its different types of coffees, Internet access and environment,” Rojas said. “If they did come to Costa Rica, for example, they would generate jobs, work, construction and taxes. They are one of the most recognized brands in the world. Their arrival would definitely be noticed.”


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