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Starbucks to start growing coffee in China, CEO says

By the CNN Wire Staff
  • Starbucks expects to start exporting Yunnan beans in three or four years
  • Yunnan coffee is already known as some of the best in Asia
  • The region can produce the world's best coffee, Starbucks' CEO says
  • The chain has 800 stores in greater China

Beijing, China (CNN) -- Starbucks has not only helped popularize coffee in China, it's also aiming to bring Chinese coffee to the world.

"Starbucks, for the first time in our 40-year history, is going to start growing coffee," CEO Howard Schultz said while on a trip to Beijing.

"We're going to actually plant trees and grow coffee in China, in the Yunnan Province."

The U.S.-based chain is making what Schultz calls "a comprehensive strategic commitment to doing business in China, in a way that's locally relevant."

Yunnan coffee is already known as some of the best in Asia, owing to the southern province's fertile soil, weather and water.

Starbucks is working with Yunnan's provincial government "to share our coffee knowledge, to help Yunnan continue to develop into a top-quality coffee-growing region and bring the distinctive Yunnan coffee taste to our customers around the world," Schultz said.

The chain will help develop and operate a farm and processing facilities in Yunnan, the company says, and will also work with area farmers to boost their crop's yield and quality.

"We've discovered a part of the area there that can produce the world's best coffee," the CEO said. "And in three to four years, we will bring coffee from Yunnan to the world."

In a country full of tea drinkers, Starbucks is making good progress, Schultz said.

"We've been here for 12 years now, with 400 stores in the mainland, 800 stores in greater China," he said.

As far as what's driving business in China, Schultz said, "Obviously, there's a tremendous size, in terms of the aspirational middle class, the numbers of people who have access to disposable income. And also they're quite familiar with western brands. One of the things that surprised us the most is how aware they were of Starbucks before we got here.

"And how fast they embrace change is another thing that has really surprised us. People were drinking black coffee when we got here. Now they are drinking cafe latte and cappuccinos and Frappuccinos," Schultz said.

"China is going to be the fastest-growing, biggest market for the future of Starbucks, outside of North America," he added.