Starbucks Coffee Company will open full-format stores, bringing its entire range of food and beverages, including its ethically-sourced Arabica coffee, to South African consumers by next year.

JSE-listed Taste confirmed on Tuesday that its wholly owned subsidiary, Taste Food Franchising, had signed an exclusive agreement to develop Starbucks outlets in South Africa.

Licensing a global category leader, such as Starbucks, was in line with Taste’s stated strategy of being custodians to the world’s leading brands.

The licence agreement gave Taste the exclusive rights to develop Starbucks outlets in South Africa. As the licensee, Taste would own and operate the stores directly. Including renewal options, the agreement was valid for 25 years and included certain rights for other African countries, subject to certain conditions.

The rights to develop Starbucks in other African countries were aligned with Taste’s ambitions to grow into select African countries.

The company explained that, as with Domino’s Pizza and other greenfield operations, Taste had and would, incur one-off costs related to the establishment of the Starbucks business in South Africa.  “These costs will include training and travel costs prior to the first store opening, pre-opening marketing and market research expenses, as well as establishing [information technology] and other infrastructure.”

The launch of the Starbucks franchise in South Africa was a first for sub-Saharan Africa, for which Taste was now Starbucks’ partner.

Starbucks sourced a considerable amount of its global, high-quality coffee from farms in sub-Saharan Africa, in partnership with a network of farmer support and agronomy centres in Ethiopia, Rwanda and Tanzania.

“We are proud to be able to offer some of the best African coffees in the world to more customers in the Southern African region,” Starbucks Europe, Middle East and Africa president Kris Engskov said.

Taste CEO Carlo Gonzaga advised that Starbucks supported the development of local suppliers and was fully committed to the company’s Changing Lanes programme wherein Taste had provided employment to previously unemployed people and exposed them to global training initiatives and skills.

“As we’ve visited numerous Starbucks markets and partners around the world we’ve come to realise that we share similar core values, including a commitment to localisation and uplifting both direct and indirect partners,” Gonzaga added.

Engskov said, working with Taste, a great Starbucks experience would be delivered to South Africa. “The coffee market here is vibrant and growing fast – we want to be part of that growth, bringing the passion and energy of this remarkable country into the design of our first store and our first barista team. We can’t wait to get started,” he enthused.

“Young people are the key to our success,” noted Engskov, pointing out that the majority of the company’s workforce was between 17 and 25. “…talented youth has always been a priority and we will equip our new partners with the skills necessary to succeed in today’s economy. We look forward to using our partnership to leverage Taste’s strong record of creating jobs and developing great people.”

The partnership would see direct job creation opportunities as each Starbucks store opened, in addition to opportunities at the Taste support office in Johannesburg.

As Taste will distribute the vast majority of the products directly to the stores, the company will benefit from the increased volume through
its distribution centres.

The company added that Starbucks also had a mature and highly leveragable digital platform that aligned with its strategic view that digital customer engagement was a key component of future success.

Starbucks had been committed to ethically sourcing and roasting high-quality Arabica coffee since 1971. Today, with more than 22 000 stores worldwide, the company was the world’s premier roaster and retailer of specialty coffee.

Taste said Starbucks was one of the few truly global brands that was not represented in Southern Africa and this addition to its portfolio complemented its licensed portfolio, which currently included Domino’s Pizza in the food division and watch brands such as Rolex, Omega, Breitling, Tag Heuer, Hublot, Rado and Longines in its luxury goods division.