April 13, 2010 / 7:42 AM / 9 years ago

Starbucks eyes more stores in China, India

TOKYO (Reuters) - Starbucks (SBUX.O) sees the potential for thousands of stores in Greater China, where it currently has around 700, and is also keen on expanding in India and Vietnam, the head of the world’s largest coffee retailer said.

Starbucks Chief Executive Howard Schultz attends a news conference in Tokyo April 13, 2010. REUTERS/Yuriko Nakao

“We’ve built 700 stores in Greater China in 10 years. I think the next 10 years will be greater than that,” Chief Executive Howard Schultz told Reuters in an interview.

Schultz declined to comment on speculation that it would tie-up with Jubilant Foodworks (JUBI.BO) for the Indian market Media had reported in late January that the two firms may form an alliance.

“At some point in the near future we will make the right announcement and the right partner in India,” he said. “We are enthused about India. We are enthused about Vietnam.”

Schultz also said the company will launch an iced version of its Via brand instant coffee in North America.

Starbucks will introduce Via in Japan on Wednesday following launches in the United Kingdom last month and the United States and Canada last year, taking aim at established instant coffee leaders Nestle SA NESN.VX and Kraft Foods Inc KFT.N.

“There hasn’t been much innovation in 50 years with soluble coffee,” Schultz said on a visit to Tokyo to promote the product, which will be sold at its nearly 900 stores in the country. “We think we are sitting on a multi-billion dollar opportunity.”

The product helped the company post the first quarterly gain in U.S. same-store sales in two years during the October-December fiscal first quarter.

The iced version will be introduced in late June in the United States and Canada, a spokeswoman later confirmed.

Instant coffee is far more popular in Japan than in the United States. Japanese bought $2.3 billion worth of instant coffee in 2009, making its market more than 3 times the size of the U.S., according to Euromonitor.

Schultz said that it will in the future look to distribute the product through grocery stores and other retail channels in Japan, similar to its strategy for the United States.

“A product like this over time has to go beyond our stores,” he said, adding that it was “time to start growing the company again” in Japan, where it has slowed the pace of store expansion in the past few years.

Schultz said overall its business outlook was solid.

“We’ll release our Q2 profits next week and the momentum in Starbucks’ business is pretty good,” he said.

Editing by Edwina Gibbs

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