Starbucks to Enter the Colombian Market - Analyst Blog

By
A A A

Coffee giant, Starbucks Corporation ( SBUX ), recently announced its plans to enter the Colombian market with the first store scheduled for a 2014 opening.

The first Colombian store will be opened in the capital city of Bogota with plans to open more cafes in the city as well as in other major Colombian cities over the next five years. Moreover, the Colombian cafés will serve only locally grown espresso and coffee.

The Colombian cafes will be run by a joint venture between Mexican restaurant company Alsea, and Colcafe, a subsidiary of Grupo Nutresa (a Colombian food processing company). Both Alsea and Colcafe have been Starbucks' Latin American business partners for the past few years.

Alsea operates more than 500 Starbucks stores across other Latin American countries like Mexico, Argentina and Chile. Starbucks has been manufacturing/roasting coffee with Colcafe in Colombia since 2008 and also developed its popular VIA Ready Brew with Colcafe. Starbucks has now expanded it manufacturing agreement with Colcafe to roast espresso, drip and packaged coffee for supply at the new Colombian stores.

In addition to opening stores, Starbucks plans to partner with the United States Agency for International Development (USAID) to help Colombian farmers increase coffee yields. The coffee giant has been purchasing coffee from Columbian farmers since 1971. Per the deal, Starbucks and USAID would invest a joint $3 million to provide technical and agronomical support to 25,000 farmers throughout Colombia.

Starbucks carries a Zacks Rank #3 (Hold). Other restaurateurs such as Burger King Worldwide, Inc. ( BKW ), Domino's Pizza, Inc. ( DPZ ) and Cracker Barrel Old Country Store, Inc. ( CBRL ) are currently doing well and have a bright outlook . All the stocks carry a Zacks Rank #2 (Buy).



BURGER KING WWD (BKW): Free Stock Analysis Report

CRACKER BARREL (CBRL): Free Stock Analysis Report

DOMINOS PIZZA (DPZ): Free Stock Analysis Report

STARBUCKS CORP (SBUX): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research



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: BKW , CBRL , DPZ , SBUX

Zacks.com

Zacks.com

More from Zacks.com:

Related Videos

Stocks

Referenced

Most Active by Volume

106,679,460
  • $17.03 ▲ 0.47%
101,357,777
  • $38.65 ▼ 5.57%
61,830,117
  • $89.89 ▼ 4.26%
54,116,071
  • $5.11 ▼ 4.49%
50,121,934
  • $101.06 ▲ 0.10%
49,993,927
  • $3.52 ▼ 1.40%
47,717,687
  • $11.44 ▼ 4.67%
44,793,169
  • $99.05 ▼ 0.93%
As of 9/22/2014, 04:15 PM

Find a Credit Card

Select a credit card product by:
Select an offer:
Search
Data Provided by BankRate.com