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Starbucks brews major expansion plan

Starbucks Corp, the world's largest coffee chain by sales, on Tuesday said it will expand its business in China by opening more outlets in second- and third-tier cities and bring in new product lines to seize the instant-coffee market.


"We will open 1,500 stores in China by 2015. Kunming in Yunnan province and Hefei in Anhui province are among the cities where we have decided to open this year," Wang Jinlong, Starbucks China president, told China Daily.


Wang said they chose Kunming because the company's first global coffee bean farm is located in the province.


From September 2010 to January this year, Starbucks opened stores in six cities, Changsha, Jinan, Fuzhou, Xiamen, Huizhou and Shangyu, totaling more than 800 stores in 35 cities.


"We do not grow just to grow. We grow in a way so that we protect our brand and culture," said John Culver, president of Starbucks Coffee International.


The second- and third-tier markets have very high potential and the company will provide high-quality coffee to those markets, Culver said.


He also unveiled Starbucks' new logo in its Solana store in Beijing, and said the evolution of the brand also shows that the products will be more diversified.


"We will develop more drinks and cakes as well as embrace our deep coffee heritage," he said.


Starbucks is setting up a research and development center in Shanghai and will focus on creating new tea products to be sold in China.


Besides outlet expansion, Starbucks also announced it will introduce its instant coffee, Starbucks "VIA", to all stores in China starting in April.


"It represents an exciting opportunity for us to expand our reach to instant coffee drinkers, China's largest coffee market segment," said Wang.


Wang added that the new coffee will help Starbucks to go beyond the stores and enter into the daily lives of its customers.


The "VIA" coffee has two flavors and is sold at 25 yuan ($3.81) for a three-stick package and 88 yuan for a 12-stick one.


According to Euromonitor International, sales of instant coffee in China last year jumped 13 percent to 5.1 billion yuan. Swiss food company Nestle SA dominates China's instant-coffee market with a 70 percent market share.
 

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