Starbucks will go upscale for 2018 Italian debut

Coffee chain to open roastery location in Milan, followed by cafes in rest of country

Benvenuto? Starbucks will begin cracking the Italian market in 2018. Photograph: Bloomberg

Benvenuto? Starbucks will begin cracking the Italian market in 2018. Photograph: Bloomberg

 

Starbucks, setting up shop in Italy for the first time, will open a roastery location in Milan next year, turning to its upscale brand to gain a foothold in the country that birthed espresso.

The 2,370sq m retail space will open in a historic post office building in the city centre in late 2018, about a year later than Starbucks originally planned. The cafe in Piazza Cordusio will feature premium, small-batch coffees as well as products from Italian artisan baker Rocco Princi, the exclusive food provider for all new roastery locations globally. It will also serve alcohol.

“Coming to Italy – strategically, it’s not the biggest market in the world,” said chief executive Howard Schultz. “But it’s the most important market for me personally and for the company. Why? Because the Italians mastered coffee way before Starbucks.”

After the Milan venue opens, Starbucks Italian licensee and business partner, Percassi, will open a small number of other stores in the city during the remainder of 2018. The company also plans to expand to other locations in Italy.

When asked how many stores are planned for Italy, Mr Schultz said: “Our history has been 10 to 12 stores in the first year, and I think that’s a safe number.”

Espresso culture

In 1983, Mr Schultz travelled to Milan and Verona and became so enthralled with the country’s espresso bars that he decided to build a coffee-shop chain. Starbucks last year said it originally planned to open its first Italian outlet in 2017.

“It took us some time to find it,” Mr Schultz said, “but once I walked through the building, I knew it would be the perfect location.”

Mr Schultz, who is stepping down as chief executive in April, plans to focus on building out the roastery chain - which are bigger Starbucks that offer higher-end coffee and let customers sample the goods at tasting stations. He is also developing the company’s new Reserve brand, which includes coffee, cafes and roastery locations. Chief operating officer Kevin Johnson, meanwhile, will take over as chief executive.

Starbucks opened its first roastery in Seattle in 2014. That location “has been labelled the Willy Wonka of coffee, and we’re going to take that and put it on steroids for the Italian experience,” Mr Schultz said.

The Milan location will be the first Starbucks roastery in Europe, the Middle East or Africa, and the fifth globally. In addition to spotlighting the company’s premium coffees, these stores can serve as a testing place for new products and ideas. Starbucks said at its recent investor day that it plans to open 20-30 roastery locations around the world.

Community life

Espresso bars have long been at the centre of community life for most Italians, who make it a daily ritual to sip – usually standing up – a short shot of espresso or a cappuccino as they discuss topics from politics to soccer.

Mr Schultz, who took his inspiration from this culture, has opened stores in more than 70 countries over more than three decades before circling back to Italy.

Still, when Starbucks opens its Milan location next year it will face smaller challengers, including Italian coffeemaker Illy, which has already drawn consumers away from local espresso bars.

“We’re not coming to Italy to teach the Italians how to make coffee,” Mr Schultz said. “We’re coming to Italy to be a respectful servant of what the coffee culture has been and earn their respect along the way.”

– (Bloomberg)