Starbucks' new cafe in Tlaxcala, its first in the state. Starbucks' new cafe in Tlaxcala, its first in the state.

Starbucks celebrates with 39% of market

The coffee company is celebrating 15 years in Mexico, where it now has over 600 outlets

Sitting down to a latte or frappuccino is more common in Mexico these days than enjoying a traditional café de olla, according to statistics that show the Starbucks coffee company has come to dominate the cafe market in a relatively short period of time.

The world’s most famous — and widespread — cafe chain celebrates 15 years this month since it entered the Mexican market and there are indicators that its arrival marked a turning point in cafe culture.

The first Starbucks coffeehouse opened in front of Mexico City’s iconic Angel of Independence monument in September 2002, offering not just beverages but also personalized touches such as writing customers’ names on their cups, a novelty at the time.

The design of Starbucks cafes was also considered innovative and the driver of an increased tendency to hold business meetings in cafes or to simply linger longer over coffee.

Restaurant company Alsea operates Starbucks in Mexico and it has become the group’s most profitable brand, contributing 23% of its overall sales in the latest quarter. The company opened its 600th franchise earlier this year and after the recent opening of a store in Tlaxcala, it now has a presence in every state.

According to data from the market research firm Euromonitor International, sales at Mexican cafes reached almost 76 billion pesos last year (US$4.3 billion) of which Starbucks took 39%, completely dominating homegrown cafes. Its income was over 10.3 billion pesos (almost US $582 million) in the most recent quarter, up 14.1% over last year’s figures.

Starbucks’ main rival, Punta del Cielo, has less than one-third of its market share at just 11% while the Italian Coffee Company is next with 10%.

One upside of Starbucks’ Mexican presence is the employment it has created — about 7,000 people across the country, a number that will only continue to grow as an estimated 50-55 new outlets are to open both this year and next, backed by an 800-million-peso investment.

The company has been praised for its support of local coffee growers, especially those in Chiapas, where it implemented an ethical and sustainable farming program and has supported producers there when disease has threatened crops.

But the company has also encountered resistance to its increasingly ubiquitous presence, especially after the election of United States President Donald Trump.

An increase in anti-U.S. sentiment and the creation of a social media campaign calling on consumers to boycott Starbucks and other U.S. brands was cited by at least one analyst as being responsible for a 9% decline in sales in the first quarter of this year.

The #AdiósStarbucks hashtag trended on Twitter, two which Alsea responded by saying it was a 100% Mexican-owned company and that the Starbucks brand in Mexico was its own property.

The company has also been criticized for the high sugar content in its specialty beverages in a country where almost 10% of the population suffers from diabetes.

However, despite the criticism and dip in sales, Starbucks is no doubt looking forward to its next 15 years in Mexico as coffee lovers continue to choose the brand at a rate almost four times that of its nearest rival.

Source: Milenio (sp)

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