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Nestle last year paid $7.15 billion for exclusive rights to sell
the U.S. chain's coffees and teas globally, and began selling
Starbucks-labelled products in Europe, Asia and Latin America in
February.
The world's largest food company will start selling 21
Starbucks-branded capsule and instant coffee products on Chinese
e-commerce platforms like Alibaba's <BABA.N> Tmall and JD.com <JD.O>,
as well as to offices and hotels in tier-1 cities, both
companies said.
"We believe China is the most exciting market in general but
especially for coffee because... per capita cup consumption is
quite low as compared to Asia," said Rashid Aleem Qureshi,
Nestle's chief executive officer for the Greater China region.
"Right now the overall soluble coffee in China is growing
between 3-5% (a year) and we believe that by bringing this
exciting new business opportunity we should be able to grow
faster than that," he said, referring to a category that
includes capsule and instant coffee.
Nestle's move comes as the Swiss company experienced a slower
first-half growth in China, its second-largest market, where
other categories like mainstream baby foods have struggled
compared to pricier options.
China's per capita coffee consumption is about 6 cups a year,
compared to 400 in Japan and 300 in South Korea, Nestle said.
The partnership with Starbucks would help Nestle add a premium
coffee option to the range of products it already sells in
China, such as Nescafe instant coffee range and Nespresso
capsule coffees, Qureshi said.
Starbucks China CEO Belinda Wong said the Nestle deal would open
two new avenues to sell its products in China, where it has been
investing heavily in its store network and delivery amid tougher
competition from local startups.
(Reporting by Brenda Goh; Editing by Subhranshu Sahu)
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