Starbucks sees Korea as first priority in Asia

SOUTH KOREA - China may be the all-important market for future growth of Starbucks, which is intensifying expansion there. But for now Korea is most important in Asia, said Darrel Kim, director of Channel Business Development Asia Pacific at the world's biggest coffee chain.

"Starbucks senior leadership, starting with CEO Howard Schultz, look at Korea with a very high priority. We have so much growth aspiration here," the Asian chief of Starbucks Global Consumer Products Group said in a recent interview with The Korea Herald in Seoul.

Since its first opening in 1999, Starbucks has maintained the No. 1 position in Korea in terms of sales. Last year, its some 450 cafes nationwide logged 298.2 billion won (S$336 million) in sales.

The Seattle-based company, which has also transformed Korea's specialty coffee culture over the past decade, now aims to extend the "affordable luxury" of its drinks to beyond the cafes by introducing their branded products.

"Although consumer packaged goods remain 10 per cent of Starbucks' business, revenue for that segment more than doubled over the past three years. Its profit contribution will become as big as or bigger than our coffee house business one day," said Kim, who oversees the Asia Pacific region, excluding China and Japan.

He expected the number of Starbucks cafes in Korea to reach 1,000 in the next five to six years. And the growing presence will increase consumer demands for products like instant coffee and ready-to-drink beverages, and vice versa.

"Korean consumers are very sophisticated. Due to the popularity of K-pop and fashion, people in other Asian countries are also highly interested in Korea-made coffee products," he said.

The canned double shot americano, which was developed exclusively for Korean consumers who enjoy americano more than in other markets where the biggest seller is usually latte, is now exported to countries like Hong Kong.

Together with the arrival of red cups at retail stores for the winter holiday season, Starbucks last week launched the Discoveries chilled latte in red package here, which is also exclusive to the Korean market.

Kim admitted Starbucks faces intensifying competition not just in Korea. However, he showed confidence based not just on the company's quality coffee but also on its corporate culture that emphasizes giving back to the community in which they operate.

That was also one of the reasons why the former management consultant made a career shift to work for Starbucks 10 years ago, he said.

"The values of the company ?serving others, being humble ? are the qualities I aspired to. I thought it would be great to learn and become like that," he said, calling his job "the best in the world."

Under Kim's leadership, the CPG segment of Starbucks has also donated thousands of books every year to tiny schools in underprivileged areas in Korea since 2008 and plans to expand the beneficiaries.

Kim, a Korean-American whose family moved to Hawaii when he was 1, said that a growing number of Koreans are joining the company, including for leadership positions, but added that being Korean is not so special at Starbucks, which is good at diversity.

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