Starbucks Forms JV to Open First Store in Colombia - Analyst Blog

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Starbucks Coffee Company ( SBUX ) entered into a joint venture with its long-term business partners Alsea and Grupo Nutresa, to open its first store in Parque de la 93 in Bogota, Colombia.

The new store is the first in Latin America to offer Starbucks Reserve Coffee and the Clover Brewing System. It is also the first store to use locally grown coffee.

The Starbucks Reserve is a collection of arabica coffees offered in select stores for limited periods. The Parque de la 93 store will offer five different varieties of Colombian coffee, namely Starbucks Reserve Colombia El Peñol, the single-origin Colombia Nariño, Colombia Espresso, Colombia Espresso Decaf and Colombia Blend. Customers will also be offered whole bean packaged coffee from other markets across the world.

The Clover Brewing System is the latest innovation in coffee brewing that adds new layers and dimensions to the coffee's aroma, flavor, body and acidity. This brewing system is available in only select stores.

Starbucks has been purchasing Colombian arabica coffee for over four decades. The company currently has over 700 stores across 13 markets in Latin America. The recent addition will further strengthen the company's presence in the region. The company intends to add 50 stores in Bogota and other major cities across Colombia over the next five years. Further, the company has plans to expand its Latin American presence by opening stores in Bolivia and Panama this year and early next year

Starbucks has maintained its long-term commitments towards the coffee farmers in Colombia. Starbucks is into a public-private partnership with the U.S. Agency for International Development (USAID) to invest $3 million to improve Colombian coffee yields and offer better opportunities for Colombian farmers.

Starbucks in partnership with the Grameen Foundation and Coocafisa Cooperative de Salgar uses tablets and mobile technology to improve agronomy practices among small coffee producers in Antioquia, Colombia. Starbucks, along with Alsea and Nutresa, has also made a financial donation to a non-profit Youth Leadership Training Program to help Bogota public high school students.

Starbucks carries a Zacks Rank #2 (Buy).

Investors interested in the food industry can also consider stocks like Red Robin Gourmet Burgers Inc. ( RRGB ), Bloomin' Brands, Inc. ( BLMN ), and Chipotle Mexican Grill, Inc. ( CMG ). While Red Robin sports a Zacks Rank #1 (Strong Buy). Bloomin' Brands, and Chipotle carry a Zacks Rank #2.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: SBUX , BLMN , CMG , RRGB

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