Starbucks Partners with Alibaba in Opening AR Roastery

06 December, 2017, 01:04 | Author: Roderick Gutierrez
  • At the Starbucks Roastery in Shanghai small-lot coffees are loaded for roasting in front of a two-story 40-ton copper cask on which traditional Chinese chops or stamps are displayed to tell the story of Starbucks and its Reserve coffee. (Courtesy of S

Executive chairman Howard Schultz, speaking at the launch of Starbucks' first overseas "Reserve Roastery" - an opulent flagship store with gourmet coffees and a bakery - said China was on track to be "bigger, more powerful and more significant" than the firm's USA business.

China is Starbucks' fastest growing market in the world with a store opening there every 15 hours. Customers can point their smartphones around the roastery for an augmented reality experience.

According to a press release from the company, the new roastery will be "the first fully immersive coffee experience in Asia" combining coffee roasting, packaging and brewing with augmented reality.

As customers enter the new Roastery, they are greeted by the sight of a two-story, copper cask, adorned with more than 1,000 traditional Chinese chops (or stamps) that have been hand-engraved to narrate the story of Starbucks and coffee.

Starbucks is now building more net new company-operated stores in China than the US, said CEO Kevin Johnson, who replaced CEO Howard Schultz in April when the longtime leader transitioned into the role of executive chairman. The concept is part of a broad push upmarket that includes a line of premium coffee called Reserve and cafes to showcase the new brand.

Starbucks waited three years since it opened its first USA based Roastery to finally test the concept in China, where it has over 3,000 stores.

One of the three coffee bars is 88 feet long.


And Starbucks is playing to that image with this new shop in Shanghai.

But the roastery in Shanghai won't hold the title of largest Starbucks for too long.

Starbucks expanded its investment in China in July, when it announced plans to buy out the partners in its East China joint venture.

Starbucks' same-store sales in China rose 8 per cent during the most recent quarter, beating its global 2 per cent growth.

It will also host the Teavana Bar - its first outlet in China specifically offering a range of Chinese teas.

Same-store sales at U.S. cafes were up 2% for the quarter ended 1 October, while sales in China were up 8%.

Shares of Starbucks have risen 5.8 percent this year. Located strategically at 789 Nanjing Road W. on one of the busiest shopping streets in the world, the new Starbucks Reserve Roastery is set to make a serious impact, both in China and beyond.

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