New Agreement Signed to Bring Starbucks®
Ready-To-Drink Coffee Beverages to First 10 Latin American Markets
in 2016
Starbucks (NASDAQ: SBUX) and PepsiCo, Inc. (NYSE: PEP) today
announced they have entered into an agreement for the marketing,
sale and distribution of Starbucks® ready-to-drink (RTD) coffee and
energy beverages including Starbucks® Frappuccino® chilled coffee
drinks, Starbucks Double Shot® Espresso and Cream, and Starbucks
Refreshers® beverages in Latin America. The RTD coffee and energy
beverage category in Latin America is an estimated US$4 billion
business and is projected to grow by 22% over the next five
years.*
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Starbucks and PepsiCo sign agreement to
bring Starbucks® ready-to-drink coffee beverages to Latin American
markets in 2016. (Photo: Business Wire)
The agreement leverages the respective strengths of Starbucks
and PepsiCo to bring a carefully selected portfolio of Starbucks®
RTD coffee and energy beverages to consumers in Latin America
unlocking new market opportunities for each company. Starbucks will
provide coffee expertise and PepsiCo will sell and distribute
Starbucks® RTD coffee and energy beverages leveraging its expansive
network and experience across the region. Together, both companies
will continue to market, innovate and further develop the brand in
Latin America.
In 2016, consumers in select markets in the Caribbean, Chile,
Colombia, Costa Rica, Guatemala, Mexico, Panama, Peru, Puerto Rico,
and Uruguay will see a portfolio of Starbucks® RTD coffee
beverages. Over time, the companies plan to expand to other markets
in Latin America.
“Our expansion throughout Latin America in 2016 enables us to
deliver high-quality Starbucks coffee in a convenient
ready-to-drink format to our customers where they live, work and
play,” said Michael Conway, president, Global Channel Development
at Starbucks. “PepsiCo’s sales expertise and distribution network
makes them the ideal company to work with to unlock the Latin
American ready-to-drink market and accelerate local demand for
Starbucks.”
“The North American Coffee Partnership is arguably one of the
most successful joint ventures in the beverage industry, and with
this new agreement, we bring more than 20 years of partnership
success to a region where coffee is part of the culture,” said
Laxman Narasimhan, CEO of PepsiCo Latin America. “Together, our
highly talented and passionate teams will expand upon the vision
set decades ago to create a new blueprint for continued growth in
Latin America.”
Starbucks relationship with PepsiCo began more than 20 years ago
when the two companies formed the North American Coffee Partnership
(NACP), a joint venture that built the RTD coffee category in the
U.S. The NACP now has approximately 97 percent market share** in
RTD coffee, and the RTD coffee category is one of the fastest
growing liquid refreshment beverage categories in the U.S. The NACP
has grown to more than a $1.5 billion retail business***, in terms
of annual retail sales as of June 14, 2015. What began with the
launch of Starbucks Frappuccino® chilled coffee drinks, now
includes a diverse portfolio of coffee and energy beverages:
Starbucks® Frappuccino®, Starbucks Double Shot®, Iced Coffee, Iced
Espresso Classics, and Starbucks Refreshers®. Starbucks and PepsiCo
will leverage the scale and innovation of the NACP for this new
Latin American agreement.
Since launching its retail operations in Latin America in 2002,
Starbucks retail presence has grown to more than 870 stores in 14
markets. Latin America is an important growing region for Starbucks
coffee as it supplies more than half of the approximately 400
million pounds of high-quality arabica coffee that Starbucks
purchases every year. PepsiCo and its predecessors have been
operating in Latin America for more than 100 years, and its
beverages operations and franchises span across all countries
within the region and in select markets throughout the Caribbean
Islands.
*Based on 2014 Euromonitor results
**Based on IRI data as of 52 weeks ending June 14, 2015 Total US
MULOC
***Based on IRI data as of 52 weeks ending June 14, 2015 Total
US MULOC
About Starbucks
Since 1971, Starbucks Coffee Company has been committed to
ethically sourcing and roasting high-quality arabica coffee. Today,
with more than 21,000 stores around the globe, Starbucks is the
premier roaster and retailer of specialty coffee in the world.
Through our unwavering commitment to excellence and our guiding
principles, we bring the unique Starbucks Experience to life for
every customer through every cup. To share in the experience,
please visit our stores or online at Starbucks.com and
news.starbucks.com.
About PepsiCo
PepsiCo products are enjoyed by consumers one billion times a
day in more than 200 countries and territories around the world.
PepsiCo generated more than $66 billion in net revenue in 2014,
driven by a complementary food and beverage portfolio that includes
Frito-Lay, Gatorade, Pepsi-Cola, Quaker and Tropicana. PepsiCo’s
product portfolio includes a wide range of enjoyable foods and
beverages, including 22 brands that generate more than $1 billion
each in estimated annual retail sales.
At the heart of PepsiCo is Performance with Purpose – our goal
to deliver top-tier financial performance while creating
sustainable growth and shareholder value. In practice, Performance
with Purpose means providing a wide range of foods and beverages
from treats to healthy eats; finding innovative ways to minimize
our impact on the environment and reduce our operating costs;
providing a safe and inclusive workplace for our employees
globally; and respecting, supporting and investing in the local
communities where we operate. For more information, visit
www.pepsico.com.
Starbucks Cautionary Statement
Certain statements contained herein are not based on historical
fact and are "forward-looking statements" within the meaning of the
applicable securities laws and regulations. Generally, these
statements can be identified by the use of words such as
"anticipate," "believe," "could," "estimate," "expect," "feel,"
"forecast," "intend," "may," "plan," "potential," "project,"
"should," "will," "would," and similar expressions intended to
identify forward-looking statements, although not all
forward-looking statements contain these identifying words. These
statements are based on information available to Starbucks as of
the date hereof, and Starbucks actual results or performance could
differ materially from those stated or implied, due to risks and
uncertainties associated with its business. These risks and
uncertainties include: fluctuations in U.S. and international
economies and currencies, our ability to preserve, grow and
leverage our brands, potential negative effects of material
breaches of our information technology systems if any were to
occur, costs associated with, and the successful execution of, the
company’s initiatives and plans, including bringing Starbucks® RTD
portfolio to Latin America, the acceptance of the company’s
products by our customers, including our RTD products in Latin
America, the impact of competition, coffee, dairy and other raw
material prices and availability, the effect of legal proceedings,
and other risks detailed in the company filings with the Securities
and Exchange Commission, including the “Risk Factors” section of
Starbucks Annual Report on Form 10-K for the fiscal year ended
September 28, 2014. The company assumes no obligation to
update any of these forward-looking statements.
PepsiCo Cautionary Statement
Statements in this communication that are "forward-looking
statements" are based on currently available information, operating
plans and projections about future events and trends. Terminology
such as "aim," "anticipate," "believe," "drive," "estimate,"
"expect," "expressed confidence," "forecast," "future," "goals,"
"guidance," "intend," "may," "objectives," "outlook," "plan,"
"position," "potential," "project," "seek," "should," "strategy,"
"target," "will" or similar statements or variations of such terms
are intended to identify forward-looking statements, although not
all forward-looking statements contain such terms. Forward-looking
statements inherently involve risks and uncertainties that could
cause actual results to differ materially from those predicted in
such forward-looking statements. Such risks and uncertainties
include, but are not limited to: changes in demand for PepsiCo's
products, as a result of changes in consumer preferences or
otherwise; changes in the legal and regulatory environment;
imposition of new taxes, disagreements with tax authorities or
additional tax liabilities; PepsiCo's ability to compete
effectively; PepsiCo's ability to grow its business in developing
and emerging markets or unstable political conditions, civil unrest
or other developments and risks in the markets where PepsiCo's
products are made, manufactured, distributed or sold; unfavorable
economic conditions in the countries in which PepsiCo operates;
increased costs, disruption of supply or shortages of raw materials
and other supplies; failure to realize anticipated benefits from
PepsiCo's productivity initiatives or global operating model;
disruption of PepsiCo's supply chain; product contamination or
tampering or issues or concerns with respect to product quality,
safety and integrity; damage to PepsiCo's reputation or brand
image; failure to successfully complete or integrate acquisitions
and joint ventures into PepsiCo's existing operations or to
complete or manage divestitures or refranchisings; PepsiCo's
ability to hire or retain key employees or a highly skilled and
diverse workforce; loss of any key customer or changes to the
retail landscape; any downgrade or potential downgrade of PepsiCo's
credit ratings; the ability to protect information systems against
or effectively respond to a cybersecurity incident or other
disruption; PepsiCo's ability to implement shared services or
utilize information technology systems and networks effectively;
fluctuations or other changes in exchange rates, including changes
in currency exchange mechanisms or additional governmental actions
in Venezuela; climate change, or legal, regulatory or market
measures to address climate change; failure to successfully
negotiate collective bargaining agreements or strikes or work
stoppages; any infringement of or challenge to PepsiCo's
intellectual property rights; potential liabilities and costs from
litigation or legal proceedings; and other factors that may
adversely affect the price of PepsiCo's common stock and financial
performance.
For additional information on these and other factors that could
cause PepsiCo's actual results to materially differ from those set
forth herein, please see PepsiCo's filings with the Securities and
Exchange Commission, including its most recent annual report on
Form 10-K and subsequent reports on Forms 10-Q and 8-K. Investors
are cautioned not to place undue reliance on any such
forward-looking statements, which speak only as of the date they
are made. PepsiCo undertakes no obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150723006542/en/
StarbucksSanja Gould, 206-318-7100Global
Communicationspress@starbucks.comorPepsiCoAndrea Canabal,
914-253-2027Corporate Communicationsandrea.canabal@pepsico.com
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