Starbucks Corporation announced that it will enter the ready-to-drink (RTD) coffee category in Europe, an approximately $550 million US market. Starbucks also announced that it signed an agreement with Arla Foods for the manufacture, distribution, and marketing of Starbucks-branded premium RTD coffee beverages in Europe.
Extending the Starbucks brand into new distribution channels globally is part of Starbucks’ long-term plans to target international growth in key regions such as Europe.
“Starbucks Global Consumer Products business allows us to extend the ‘Starbucks Experience’ to consumers beyond our retail stores while broadening our distribution channels globally,” says Rich DePencier, vice president of Starbucks Global Consumer Products International. “The success we have had bringing ready-to-drink coffee products to consumers in North America and Asia demonstrates the global potential of the business and we are proud to join with Arla Foods to bring our premium RTD beverages to consumers in Europe.”
Arla Foods is a leading producer and distributor of quality milk products in Europe and has more than 100 years experience of providing consumers with inspirational products that create well being. Arla is one of the largest dairy companies in the world, with particularly strong markets in Northern Europe. Arla Foods will manufacture, distribute, and market Starbucks premium, milk-based, ready-to-drink coffee beverages that are made with the same high-quality arabica coffee blends that are used in the handcrafted coffee beverages available at Starbucks retail stores around the world.
“Starbucks is a super brand around the world, based on strong values and high-quality products, and we are very pleased about the fact that Starbucks and Arla will work together in the European RTD cold coffee business,” says Arla Foods’ CEO Peder Tuborgh. “The joint effort to grow the RTD cold coffee category where Arla Foods will produce, market, and sell the Starbucks-branded RTD coffee beverages is a great opportunity for Arla and a strong match to Arla’s European strategy.”
Starbucks has a proven track record of creating successful RTD coffee products globally. Through a joint venture with PepsiCo, in 1996 the company introduced Starbucks bottled Frappuccino coffee drinks and later Starbucks DoubleShot espresso drinks. To date, these Starbucks coffee innovations remain the No. 1 products in their respective segments of the ready-to-drink coffee category in the U.S. In 2005, Starbucks introduced Starbucks Discoveries chilled cup coffees in Japan through an agreement with Suntory Foods; in 2007 it entered Korea with the full line of Starbucks RTD products with Dong Suh Foods; and it brought Frappuccino coffee drinks to China and Mexico in 2008.