Market research conducted by BrandsEye shows what South Africans expect from Starbucks when it enters the local market next month – and how much they’d be willing to pay.
Taste Holdings announced on Thursday that South Africa’s first Starbucks coffee chain will be opening at the end of April in Rosebank, Gauteng.
A second branch will open around the same time at the Mall of Africa in Midrand.
The global brand’s entry into the market has South African coffee consumers divided, with the excitement of such a big brand operating in the country being quelled by concerns over quality and price.
BrandEye tracked and analysed consumer sentiments towards Starbucks and other local coffee brands on social media, to gauge what South Africans expect.
The group found that Starbucks’ entry into South Africa increased conversation not only about the US brand, but local brands as well.
And while a lot of consumers – especially consumers of artisanal brands of coffee – are less excited, and unwilling to pay premium fees for Starbucks, many rejoice the brand’s equity, and wouldn’t mind “splurging” out for its novelty blends.
Who loves and hates Starbucks
According to the report, overall sentiment towards Starbucks in the country is more positive than it is negative. The only place where this isn’t true is Cape Town, where 33% of consumers expressed negative sentiment towards the brand, versus 26% who were positive.
Durban is the most positive towards Starbucks (43% positive vs 17% negative), while Gauteng is in the middle – but also more positive (33% vs 18% negative).
BrandEye suggests that Durban would be the next most logical city for Stabucks to head to, after Joburg, as Cape Town would prove to be a resistant market.
Price and quality
One of the most talked-about aspects of Starbucks’ launch in the country is price. BrandEye’s analysis found that South African consumers were largely unwilling to spend more than R25 for a cup of coffee.
Local brands offer high-quality products for up to R28 per cup – while Starbucks is expected to enter at a R30-R50 price point. When prices were discussed, sentiment toward Starbucks was negative.
Another subject that drew criticism from consumers was a question of quality, where South African coffee fans saw local brands – especially artisanal brands – as being of higher quality and more affordable.
However, Starbucks’ novelty blended beverages prompted high levels of excitement from South Africans, the group said.
While pricing is one of the most-discussed issues, it’s only the 5th most important factor, according to South African consumers.
Topping the list is quality, followed by the in-store experience, product mix and brand status.
“Despite initial concerns as to what Starbucks would charge per cup, price only ranked fifth in the above scale, but (it was) also linked to quality,” BrandEye said.