UK-based Costa Coffee to open 70-80 stores in PHL over five years  

 

Watch out coffee lovers. A new player from the United Kingdom is coming to town, and will probably give well-entrenched Starbucks and Coffee Bean & Tea Leaf a run for their brew.

 

Costa Coffee, a UK-based coffeehouse chain, is looking at penetrating the Philippines' coffee market that is mostly dominated by American brands. The plan is to open up to 80 stores in the next five years, banking on an upgraded Filipino lifestyle and higher per capita spending, an official of the company said.

 

The coffee company is in the midst of completing market research on the Philippines, Matt Kenley, Costa Coffee in SEA and India international operations manager, told reporters on the sidelines of Franchise Asia Philippines 2014 in SMX Convention Center in Pasay City Thursday. 

 

"As soon as we finish our market research in the Philippines, we're looking to shortlist partners and then we will announce... I would hope so [this year]," he said.

 

From the shortlist, Kenley said they may look at only one master franchise holder. He declined to say who parent firm Whitbread Asia Pacific Pte Ltd. is in talks with over the matter in the Philippines.

 

"We're looking at 70 to 80 in five years... but it depends on our franchise partner," he said.

 

"We're dealing with a different market place, a different tailored shop... So, it has to fit the Philippine market," he said.

 

Costa Coffee is a subsidiary of Whitbread PLC, UK's largest hospitality company with exposures in hotels, restaurants and coffee shops.

 

Its brands include Premier Inn, Costa, Brewers Fayre, Beefeater Grill, Table Table and Taybarns.

US and local brands

 

Currently, the Philippine coffee market has a mix of foreign and local coffee shop chains, mostly dominated by US brands that include Starbucks's wholly-owned subsidiary Seattle's Best Coffee, as well as homegrown companies like Bo's Coffee and Figaro, Australia's Gloria Jean's Coffee and Washington-based Tully's Coffee.

 

Unknown to most Filipino consumers, Costa Coffee is a key player in the coffee business – second only to Starbucks – with over 3,000 shops worldwide, Kenley said.

 

Starbucks has nearly 20,000 stores globally, based on information found on its website.

 

Factors such as consumption spending, changing lifestyles, expanding economy, and deepening coffee market drove Costa Coffee to take a look at Southeast Asia, particularly the Philippines, Kenley noted.

 

"We've seen a lot of shift here in the past five years – more consumers spending, the coffee market and the lifestyle," he said.

 

"We're looking at GDP growth as well," he added.

 

Costa Coffee is now expanding in Singapore, after having entered the Thai and Cambodian markets last year.

 

But with a number of well-loved players already in the market, how will Costa Coffee position against itself against competitors?

 

It all lies in the roasted coffee beans and handcrafted products, Kenley argued.

 

Unlike other coffee players, Costa Coffee buys beans in this part of the world, he said.

 

"That's the unique selling point of Costa. Starbucks, for instance, buys their coffee in South America. We buy coffee from this region of the world. The key is in our roast," he said.

 

With plans to enter the Philippines, the coffee company will "definitely" source coffee beans here, Kenley said.

 

Another competitive edge is the handcrafted coffee, the official claimed.

 

"The key with Costa all our coffee are handcrafted. What you have is barista-handcrafted coffee, so it's all about the quality of roast," he said, noting what they serve are not done with just a push of a button.

 

"All our baristas are trained, we spend a lot for their training," Kenley noted.

 

He said they are position the brand "at a much more premium offer" but with focus on the younger generation. "Clearly, we want younger generation as the ages 18 to 25 market is big out here," Kenley said.

 

"Pricing will be the same. We won't be anymore or any less," he added. – VS, GMA news