Starbucks Brazil presents plan to the array

The new command of Starbucks in the country will present to the matrix next month the business plan of the network of coffee shops in Brazil, in command of the company, meeting in Mexico City. The project is being discussed and being drawn by Norman Baines, General Director of the company in Brazil since June, and accompanied by Richard Nelsen, Executive appointed a few months ago to lead the operation in Latin America.
Baines said the value, in his first interview after taking office on Starbucks, which will treat the organic growth plan for 2014 with the intention that this is the initial step to "touch the heel" of operation in Mexico, the biggest network marketing in Latin America.
The fact is that the Brazilian operation still loses to Argentina and only spent the Chile (which has 50 points) in number of stores last year. So you can get close to the size of the Mexican subsidiary, be necessary, first, to consolidate the leadership in South America. "Are 650 stores in 12 markets in Latin America. We're 10% of it. What has been said is that we need to take Brazil to the ' next level ' [next level] to another level, we haven't. So the country is in the set of priorities ".
The Mexican market has about 380 stores open in 11 years of operation, an average of 37 openings per year. In Brazil, Starbucks opened 61 units in seven years and still there are minus points here than in neighboring Argentina, a country with one-fifth the Brazilian consumer market and 66 open units in 5 years. The goal is to reach about 70 coffee shops in the country by the end of 2013, with opening of 15 units in the year (they were 55 in January). Four openings will be in São Paulo International Airport, in Guarulhos.
It's easy to understand what goes on in the head of Starbucks ' command to the country still be behind other emerging markets.
The largest coffee shop in the world has placed the region in Asia ahead of growth in the rest of the world. In the land of tea, the Chinese have been drinking so much coffee that pulled the high of 27% in sales from the Asian region in the 12-month cumulative ending in June. Turned out to be the engine of growth of the network in the world. Is well above the average of the company, of 12%. In Brazil, the growth rate must be in the range of 20% year to date. In Asia (China has 3 thousand stores of 18 thousand in Network World) the fee must revolve around 30%.
Which explains, in part, this high rate is the increased focus on organic expansion in China, exactly what is being planned for the Brazilian market.
Baines did not give details of the project which will be presented to the matrix in September. But signals that one of the new markets to be explored will be Brasilia, and says that the expansion needs to happen with larger nationalization rates in stores and in the composition of the products, with a reduction in the impact of variations of the dollar cost.
The nationalization rate of the network in the country is at 40%, and the remaining 60%, still refers to the import of equipment and raw material, affected by the variations of the dollar. "We are currently absorbing these pressures the dollar, without passing on the price, because these settings can affect traffic, and this market is sensitive to price," he says. "We were able to nationalize the caramel syrup and classic syrup, used in many drinks, for about a month and a half, with an agreement with a local producer. This reduces currency risks ".
As for the other markets in South America, accelerated growth is explained by the strength of the local partner. In Argentina grows with the support of the Mexican group Alsea, the controller of the business with aggressive projects to the country. Around here, the initial operation was organized in a partnership among Americans, with 49%, and Cafes Sereia, Maria Luisa Rodenbeck, with the remaining 51%. After the death of Maria Luiza, in 2007, Peter Rodenbeck's husband took over the operation for three years. In 2010, he sold his share to the Americans. Starbucks then proceeded to control the business.
In 2011, with the American company's hand operation, only eight stores were opened, going from 25 to 32. Last year the network has reached 55 points-the goal was to reach 64 units.
One of the central issues of this project in the country, which should be part of the market analysis to be discussed in September, are the economic uncertainties of the local market, with deceleration of the economy in 2013, despite good numbers in the industry.
In 2012, the per capita consumption of coffee in the country was 4.98 pounds of roasted coffee, almost 83 litres per year, according to the Brazilian by Associação Brasileira da Indústria do Café (Abic), up 2 percent. But the rate is much higher for consumption outside the home. By this criterion, between 2004 and 2012 the expansion was about 350%, with an average annual rate of growth of 40%.
About the slowdown in demand, affecting even the biggest consumer income-the public-network, Baines says he treats the subject with the array of carefully. "I've been through a lot. I say with all the letters that there would be no devaluation of the exchange rate [recent currency crises were two, in 2002 and 2009] and ended up happening. So we're putting everything on paper, detailing region to region, the conditions for growth, to understand very well in the country, "said Baines, former Director General of Applebee's in South America from 2005 to 2012. "In my first presentation in Seattle [the Group], said that to withdraw the Alaska map, we are [Brazil] the size of the United States. They were scared. They had no idea ".