Nestle sells Starbucks branded coffee in China

Starbucks capsules are being sold in China by Nestle, which last year paid $7.15 billion for exclusive rights to sell the US chain’s coffees and teas globally. (Reuters)
Updated 08 August 2019

Nestle sells Starbucks branded coffee in China

  • World’s largest food company markets capsule and instant products online

SHANGHAI: Food giant Nestle has started selling Starbucks-branded coffee in mainland China, seeking to tap growth in a market where it says coffee consumption per capita remains low compared to global standards.

Nestle last year paid $7.15 billion for exclusive rights to sell the US chain’s coffees and teas globally, and began selling Starbucks-labelled products in Europe, Asia and Latin America in February.

The world’s largest food company will start selling 21 Starbucks-branded capsule and instant coffee products on Chinese e-commerce platforms such as Alibaba’s Tmall and JD.com, as well as to offices and hotels in tier-1 cities, both companies said.

“We believe China is the most exciting market in general but especially for coffee because ... per capita cup consumption is quite low as compared to Asia,” said Rashid Aleem Qureshi, Nestle’s chief executive officer for the Greater China region.

“Right now the overall soluble coffee in China is growing between 3-5 percent (a year) and we believe that by bringing this exciting new business opportunity we should be able to grow faster than that,” he said, referring to a category that includes capsule and instant coffee.

Nestle’s move comes as the Swiss company experienced a slower first-half growth in China, its second-largest market, where other categories such as mainstream baby foods have struggled compared to pricier options.

China’s per capita coffee consumption is about six cups a year, compared to 400 in Japan and 300 in South Korea, Nestle said.

The partnership with Starbucks would help Nestle to add a premium coffee option to the range of products it already sells in China, such as Nescafe instant coffee range and Nespresso capsule coffees, Qureshi said.

Starbucks China CEO Belinda Wong said that the Nestle deal would open two new avenues to sell its products in China, where it has been investing heavily in its store network and delivery amid tougher competition from local startups. 


US President Trump does not want to do business with China’s Huawei

Updated 19 August 2019

US President Trump does not want to do business with China’s Huawei

  • US Commerce Department expected to extend a reprieve that permits Huawei to buy supplies from US companies to service its customers

WASHINGTON: US President Donald Trump on Sunday said he did not want the United States to do business with China’s Huawei even as the administration weighs whether to extend a grace period for the company.
Reuters and other media outlets reported on Friday that the US Commerce Department is expected to extend a reprieve given to Huawei Technologies Co. Ltd. that permits the Chinese firm to buy supplies from US companies so that it can service existing customers.
The “temporary general license” will be extended for Huawei for 90 days, Reuters reported, citing two sources familiar with the situation.
On Sunday, Trump told reporters before boarding Air Force One in New Jersey that he did not want to do business with Huawei for national security reasons.
He said there were small parts of Huawei’s business that could be exempted from a broader ban, but that it would be “very complicated.” He did not say whether his administration would extend the “temporary general license.”
Speaking earlier on Sunday, National Economic Council director Larry Kudlow said the Commerce department would extend the Huawei licensing process for three months as a gesture of “good faith” amid broader trade negotiations with China.
“We’re giving a break to our own companies for three months,” Kudlow said on NBC’s “Meet the Press.”