PODCAST | Starbucks: turning a global brand into a popular SA one

In this edition of Business Day Spotlight, we talk about the performance of global coffee company Starbucks’ business in SA.

Our host Mudiwa Gavaza is joined by Adrian Maizey, CEO of Starbucks Southern Africa and founder of the Rand Group.

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Maizey’s Rand Group took over the licence for Starbucks in the region from Taste Holdings about two years ago. By that time, Taste — which also controlled Domino’s Pizza in SA — had liquidity issues having raised more than R930m from rights offers since 2014.

Maizey, who was born in Pretoria and is based in California, says it was decided to take Starbucks on a different path to that of the previous owners in the local market. Core to this strategy was scaling down the size of their planned 200 retail locations.

Around the world, Starbucks typically operates out of small locations, akin to the neighbourhood coffee shops and café’s common in SA. But when Taste built its initial locations in places such as Rosebank, Sandton and Midrand, these were large-format stores that cost too much to run for the previous owners. “There are just too many cups of coffee to be sold to cover the rental bill,” Maizey says.

Starbucks has 24 locations across SA.

Maizey details Starbucks SA’s recent partnership with Shoprite Checkers — which will see it rolling out smaller outlets of 20m² to 50m² as a “store within a store” at the grocery group’s new FreshX stores.

That said, the company does intend to keep its larger-format, flagship, stand-alone stores, such as its 490m² outlet in Rosebank, Johannesburg.

In addition, the company is investing in distributing its products through online delivery channels such as Mr D Food and Uber Eats.

The discussion focuses on the Rand Group’s decision to take over the Starbucks licence in SA, the company’s strategy to grow the business, trends in the local coffee market, as well as changes brought on by Covid-19 and its lockdowns.

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• Business Day Spotlight is a MultimediaLIVE production.