Guatemala City — Antigua, Guatemala will no longer simply be one of the varieties of beans that Stabucks (SBUX) offers to its global customers, but a destination in itself with the inauguration of a branch in the iconic Guatemalan city.
The U.S. coffee shop chain, which is once again being run by Howard Schultz as interim CEO, has opened its first branch in the Guatemalan city, and its 12th in the country, hand-in-hand with Premium Restaurants of America (PRA), which also operates the brand’s other coffee shops in Central America.
Michael Conway, Starbucks’ group president, International and Channel Development, told Bloomberg Línea that, despite the times of global volatility, the company plans to open more branches in the region, with four in Guatemala.
Much in the way Starbucks proceeds in most of its markets, the company leaves the operation of the business in the hands of its local partner. Like with Alsea in Mexico and elsewhere in Latin America, and AmRest (which is owned by Mexican Carlos Fernández) in Spain, Portugal and other European locations, Starbucks is giving PRA a vote of confidence in Central America.
“Much of our success in the region is due to our knowledge of when and where to rely on local partners to grow the business,” Conway says. “PRA not only operates our branches in Guatemala, but also in Costa Rica and El Salvador. Their excellent operation, local market knowledge and shared values, combined with the power of the Starbucks brand, continue to open new opportunities for all of us within these markets.”
Conway, who joined Starbucks in 2013, says the company already has 48 branches in Central America, having had a presence in Latin America for 20 years (the first branches in the region opened in Puerto Rico and Mexico in 2002), and has expanded in Latin America and the Caribbean and generated employment opportunities for more than 18,000 employees regionally.
With the Antigua opening, Starbucks now operates 1,500 branches in 22 markets in alliance with 10 licensees, who know their markets and customers.
The company describes the new branch in Colonial-era Antigua, a UNESCO World Heritage Site, as a ‘milestone’ because it is the 1,500th in the region, and because “the Starbucks Antigua store is a work of art in itself”, Conway told Bloomberg Línea.
The 8,600-square-foot branch will be able to accommodate 170 customers, and also has three conference rooms and an interior patio, bedecked with abundant local plants, and bathed in natural light.
The branch is located on 5ta Avenida, and is open Sunday through Thursday from 6:00 a.m. to 9:00 p.m.; Friday and Saturday from 6:00 a.m. to 10:00 p.m.
Starbucks’ LAC design team, in collaboration with PRA, was committed to protecting and preserving the original beauty and history of the building - a private residence dating back to the 1930s - by restoring its original architectural features, honoring Guatemala’s coffee culture.
The following interview has been edited for length and clarity:
Bloomberg Línea: How has Starbucks coped with the effects of the conflict between Russia and Ukraine, are there any logistical difficulties?
Michael Conway: We condemn the horrific attacks on Ukraine by Russia. On March 8, 2022, Starbucks announced its decision to suspend all business activity in Russia, including the shipment of Starbucks products. Likewise, Starbucks’ authorized licensee partner in the market immediately suspended store operations there.
We continue to closely monitor the impacts of the conflict, prioritizing the safety and well-being of our partners globally in our decision making.
Is pricing a sensitive due to inflationary effects? How have you handled that issue, and what has been the consumer response?
As a normal business practice, we evaluate and adjust prices on a product-by-product and market-by-market basis based on various growing operating and occupancy expenses. This is what allows us to balance the need to manage our business efficiently while continuing to deliver value to our customers. Beverages and food vary by location and consumers can find our prices posted in-store or on the Starbucks app. We remain committed to being thoughtful and strategic in how we view the long-term outlook for our pricing.
How many jobs are you creating, and what is the procedure to train the staff in charge?
With the opening of the Antigua branch, we are proud to welcome 25 new partners (employees) from the community of this historic city, generating a total employment in the country of 200 Starbucks partners who proudly wear our green apron.
At Starbucks we have always recognized that our success is largely attributed to the inspired moments of connection that our partners create every day for our customers. This is why all Starbucks partners received a comprehensive training program, which included coffee theory, Starbucks culture and barista practices from experienced partners in Guatemala City.
The partners were trained over the course of a month to prepare them for the opening of our coffee shop in Antigua. We want to make sure they have all the necessary skills to brew the perfect cup of coffee while delivering the Starbucks experience to all our customers.
Have you encouraged more Guatemalan coffee purchases? What percentage of your coffee portfolio is local?
Starbucks has been buying coffee from Guatemala since we opened our first store in 1971. Starbucks Guatemala Antigua is one of our most beloved single origin coffees and part of the Starbucks core menu offered in more than 80 markets around the world. At the new Antigua branch, the coffee of the day and all of our handcrafted espresso-based beverages will be made with Guatemala Antigua coffee in honor of the local coffee heritage.
How much has the company invested in Guatemala over the last 12 years?
For competitive reasons, Starbucks does not disclose specific investment figures, but I can assure you that we remain committed to investing in Guatemala and bringing the Starbucks experience to more cities in the market. Without a doubt, our goal is to strengthen the brand, attract strong talent, invest in our partners and create attractive places for our customers to gather with friends and family to enjoy a great cup of coffee.
What are the projections for this year, will you open in another department in Guatemala?
We are excited to open our first store in Antigua, as it marks our milestone of 1,500 stores in Latin America and the Caribbean, and also because the Starbucks Antigua store is a work of art in itself. This coffee shop is part of a UNESCO World Heritage Site and honors Guatemala’s coffee culture and heritage by maintaining the historical integrity of the building, the unique branch design and the coffee experience for our customers. The Starbucks LAC design team was committed to protecting and preserving the original beauty and history of this building by reclaiming its unique architectural features. In addition, our customers will find exquisite murals, ornaments and furniture made by local artists such as Alvaro Tzaj Yotz, Hugo López and Daniela Rivas, among many others.
What is the potential for further growth in Guatemala for Starbucks?
Guatemala has always been a key coffee supplier region for Starbucks, as well as an interesting market for retail. We are really proud to be able to expand employment opportunities for local partners to hone their skills, share their passion for coffee and develop their career with Starbucks.