SA coffee market ‘larger than we thought’: Starbucks CEO

[Update: a previous version of this story read as if the Starbucks rewards scheme had already launched in the country – the scheme has just launched in the USA, and will debut in South Africa at a later date]

Starbucks CEO Howard Schultz says that the coffee market in South Africa is larger than he anticipated.

“I’ve never seen a line like this after a week of our opening,” Schultz told journalists at the company’s new store in Rosebank, Johannesburg late last week.

“This market is going to be larger than we probably thought initially … South African consumers are well aware of the company’s reputation and what we call the third place and the experience that we create.”

Listed company, Taste Holdings, announced in July 2015 that it had secured the rights to open full-format Starbucks stores in South Africa.

According to Taste, following the grand opening, 12 to 15 more stores will open over the next two years at a cost of R108 million.

The group expects future store growth of 20 outlets per year. Schultz said last week that he plans to open a minimum of 15 to 18 stores in South Africa over the next year.

Taste’s research into the market opportunity for the brand – taking costs into account – is for 150 to 200 stores in South Africa.

The second Starbucks store opened at the Mall of Africa last week.

Carlo Gonzaga, CEO of Taste Holdings, told the Sunday Times that the company has introduced a rewards system in the USA, whereby customers earn reward stars based on the amount of money they spend at Starbucks.

The CEO said there are plans to launch the same rewards scheme in South Africa at a later date.

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SA coffee market ‘larger than we thought’: Starbucks CEO