Starbucks Expands Tea Offerings In Asia

A new brand for Starbucks in Asia, its Teavana handcrafted beverages and full leaf tea sachets are now available in more than 6,200 stores across its 16 markets in the China and Asia Pacific region. But China's tea industry, which stands nearly ten times bigger than the country's coffee market at about 63.2 billion yuan ($9.5 billion), could pay off big-time for Starbucks, according to Bloomberg.

Now, Bloomberg have reported that Starbucks is planning to energise its performance in the China, which is its fastest growing market, with some new tea-based drinks. "There is a strong tea identity in Asia and it also chimes well with the particularly Asian view of healthcare as being centered around prevention, rather than cure". Starbucks' new tea products may also align with Chinese consumer's growing demand for products aimed at promoting healthy lifestyles.

The company added that in 2015, Starbucks tea business in the US grew by 12 percent with all tea categories posting strong growth, led by iced tea at 29 percent. "Because of this, tea-based products are likely to see strong growth".


Matthew Crabbe, director of research at Mintel Asia Pacific, likened the target market to that of bubble or "boba" tea, "which grew very rapidly out of Taiwan, hit China, and expanded enormously".

While tea is the most consumed beverage after water in Asia, skepticism has grown over Starbucks' capacity to penetrate a region where tea-drinking is entrenched and part of local culture.

For Asia, its offerings include black tea with ruby grapefruit and honey and green tea with aloe and prickly pear, relatively more complex recipes compared to U.S bestsellers like mango black tea and peach green tea.


Ask anyone where tea comes from, and they'll probably say China.

Starbucks is opening about 500 stores a year in China, amounting to about 3,400 locations in the country by 2019.

Customers in the region, "especially younger consumers in urban areas, are really keen to try new flavors, more premium products, more sophisticated products", said Midotto, adding that Southeast Asia in particular shows promise with "a very, very young population ... a lot of whom don't drink alcohol".



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