COFFEE BUSINESS BREWING MERRILY IN RP

Things are brewing quite right for Starbucks in the United States, having seen its profits slide over the past couple of months, according to financial reports.

The blame has been placed squarely on the threat of recession or the anxieties of Americans over the downturn in their economy.

Still, the company expects to open 1,020 new outlets during their 2008 fiscal year, which started in October 2007 and will end in September 2008.

In the Philippines, the licensee is Rustan Coffee Corp. Although it is not required to reveal the financial health of Starbucks in the Philippines, the company must be doing well, given its plans to open 30 branches during the fiscal year, according to Eduardo Lopez,head of Rustans Coffee. Many of the new outlets will be outside Metro Manila.

So far, he said, the company has opened nine outlets and is finalizing plans for 21 more. During the previous year, they opened 25 branches, bringing to 131 the total number of Starbucks outlets in the country.

Two top officials of Starbucks were in Manila recently as part of their regular meetings with partners,i.e. employees.

Dub Hay, SVP for Coffee and Global procurement, and John Culver, president of Starbucks Coffee Asia Pacific. met with about 20 district managers of Starbucks, who each handle about six to seven outlets.

They received questions from the managers and congratulated the local Starbucks, which marked its 10th year last November. The meeting was held at Starbucks 6750, its very first outlet in the country.

Hay pointed out that the Philippines is the second oldest market for Starbucks in Asia, the first being Japan.

Hay added that with over 130 outlets in the country, the Philippines is among the top markets for specialty coffee in the world.

"You are a major world player," Hay said. "Coming to the Philippines is an uplifting experience," said Culver, who has been to the country a few times.

Culver said he and Hay walked around Glorietta when they arrived and noted how all the Starbucks outlets were full.

The two also cited the length of stay of employees in Rustan Coffee Corp. Most of the district managers have been with the firm for an average of nine years.

Its marketing manager Alexandra Bustalino said she has been with the company since it opened in 1997, starting out as a barrista, or the person who makes the specialty coffee.

She described the Starbucks market in the Philippines as averaging 16 to 45 years old.

She said that, in terms of compensation, barrista's pays are competitive with that of call center workers.

She noted that one of the most saleable items on the menu is its Mocha Frappucino. Recently they have beefed up their breakfast menu with new offerings like bagel sandwiches.

In describing the coffee drinking market, Hay said things have not changed much from when Starbucks was born in 1971.

"The original concept of the coffee house is alive and thriving," he said. "Coffee has always been a drink people have during conversations. Its been a social drink for over hundred of years."

According to Culver, "the reason we were successful was because of the quality of coffee we serve."

In the US, Starbucks recently launched a new brew called Pike Place Roast. The brew is Starbucks' answer to critics, who claim that, in the haste to produce a cup, real flavorful Starbucks coffee has disappeared.

The Roast was named after Starbucks' first outlet in Plike Place in Seattle Washington. Initially, it will only be offered in the US.

(Quoted from the column of Ms Margie Quimpo-Espino, Business Monday, Phil. Daily Inquirer, May 12,2008 issue.)

Comment: A lot more coffeeshops sprouted everywhere from the native brew to the many foreign coffee blends. Some say coffee is good for the heart. Some say coffee is dangerous, maybe if taken too often. To tell you, coffee is best when coffee is available, affordable and shared with friends. Want to have your own coffee shop? Its a good business anyway- with Capital.