Starbucks blueprint for growth includes C.P.G. focus

by Eric Schroeder
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NEW YORK — Strategic U.S. retail expansion, a renewed focus on consumer packaged goods growth and development in emerging markets highlight Starbucks Coffee Co.’s blueprint for multi-channel growth. Executives with the Seattle-based company at a Dec. 1 biennial investor conference in New York detailed strategies that are expected to help Starbucks unlock significant potential and achieve a greater share of the nearly $145 billion world coffee market.

“We are building a solid and secure foundation for profitable growth in both new and existing businesses,” said Howard Schultz, chairman, president and chief executive officer. “Our next phase of growth will come from extending the ‘Starbucks Experience’ to our customers beyond the third place to every part of their day, through multiple brands and channels.”

Near the top of the company’s agenda are plans to build a world-class consumer packaged goods organization.

To reach that goal, Starbucks has pledged to reach customers “in the most agile and efficient way across all categories, channels and markets,” said Jeff Hansberry, president of Global Consumer Products and Foodservice.

“Starbucks C.P.G. business is becoming a high profit, important and growing business, with global scale for Starbucks,” Mr. Hansberry said. “The new direct model has the ability to drive authentic and effective sampling, build true partnerships with our retail customers and build their trust, and introduce some Starbucks retail theater to the grocery aisle.”

As it expands its retail and grocery footprint, Starbucks also said it will build stand-alone brands such as Seattle’s Best Coffee.

Beyond the United States, emerging markets are expected to play a vital role in Starbucks multi-channel growth, said John Culver, president of Starbucks Coffee International.

“Strong fundamentals and customer demand provide the company with the foundation to accelerate growth into established markets, such as Canada and Japan, and new or emerging markets such as China, Brazil, India and Russia,” Mr. Culver said. “We are particularly pleased with the response we’re seeing from our Chinese customers, and expect to operate at least 1,500 Starbucks stores in mainland China by 2015.”

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