Coffee company, Starbucks Corporation SBUX, recently announced the opening of its first store in Panama. The store is opened in collaboration with its long-term licensing partner in Central America, Premium Restaurants of America (PRA).
Panama is Starbucks’ 15th market in Latin America. PRA already operates 19 Starbucks stores in the region, including those in El Salvador, Guatemala and Costa Rica.
Located in Street Mall shopping center in Panama City, the new store will feature Starbucks Reserve collection of small-batch coffees, including Panama Carmen Estate Coffee. We note that Starbucks is not exactly new in Panama as the company acquires coffee from several farms in the country, namely, Carmen Estate, Los Cantares Estate, La Florentina, San Benito and Hacienda La Esmeralda.
The company further plans to open 20 stores in Panama City over the next five years, in collaboration with PRA. This program is expected to generate employment for more than 2,400 people in Panama City.
Starbucks has been operating in Latin America since 2002, running over 870 stores in 14 markets. This is a very important market for the company, since this is where it gets a major portion of its Arabica coffee supply.
In Jul 2015, Starbucks had announced a partnership agreement with beverage giant, PepsiCo, Inc. PEP to market, sell and distribute ready-to-drink (RTD) Starbucks coffee and energy beverages in Latin America, starting 2016 (read: Starbucks/PepsiCo Collaborate to Expand in Latin America).
According to the agreement, Pepsi will use its expansive distribution network and local expertise in the region to sell and distribute Starbucks RTD beverages. These beverages will be available in 2016, across the Caribbean, Chile, Colombia, Costa Rica, Guatemala, Mexico, Panama, Peru, Puerto Rico and Uruguay.
The recent agreement will thus leverage the expertise of both companies. It will strengthen and expand Starbucks’s foothold in the region and tap the huge RTD coffee market in the region.
Starbucks carries a Zacks Rank #2 (Buy).
Other restaurateurs worth considering include Carrols Restaurant Group, Inc. TAST and Ruby Tuesday, Inc. RT, both the companies sporting a Zacks Rank #1 (Strong Buy).
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