Premium Reserve Roastery
On December 6, 2017, Starbucks (SBUX) opened its first premium Reserve Roastery in Asia in Shanghai. It’s the company’s second roastery after the Reserve Roastery & Tasting Room in Seattle, Washington, which opened three years ago.
As part of the experience, customers can watch multiple brewing methods at three wooden coffee bars and explore specially crafted teas at the 3-D (three-dimensional) printed tea bar in the 30,000-square-foot facility. The roastery also serves freshly baked Italian artisanal food by Princi, a famous bakery in Milan and London.
To enhance customer experience, the roastery also offers an augmented reality experience, which provides information on the journey of a coffee bean until it reaches a customer’s coffee cup. The service can be accessed through the roastery’s customized digital Web app (application) platform or Alibaba’s (BABA) Taobao app. The app includes a digital menu and provides details of brewing techniques and various company offerings.
China has been crucial for Starbucks since SSSG (same-store sales growth) in China was 8% in fiscal 4Q17 compared to 2% in the rest of the world. That quarter, the China/Asia Pacific (or CAP) region generated approximately 15% of the company’s total revenues. Currently, Starbucks operates 3,070 stores in the region, which includes 1,540 stores in China.
Starbucks has been focusing on aggressively expanding its operations in the CAP region. In fiscal 2017, the company opened 259 restaurants and plans to open 1,100 new restaurants in the CAP region with 600 restaurants in China in fiscal 2018. The opening of a premium Reserve roastery in Shanghai is expected to increase Starbucks’s brand image and drive its SSSG. Starbucks also plans to open roasteries in New York, Tokyo, Milan, and Chicago.
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