Starbucks and PepsiCo, Inc. announced Thursday they have entered into an agreement for the marketing, sale and distribution of Starbucks ready-to-drink coffee and energy beverages in Latin America.
The so-called ready-to-drink coffee and energy beverage category in Latin America is an estimated $4 billion business and is projected to grow by 22 percent over the next five years, the companies said.
The agreement relies on the strengths of Starbucks and PepsiCo to deliver a selected portfolio of Starbucks ready-to-drink coffee and energy beverages to consumers in Latin America, opening new market opportunities for each company. The products are already available in Puerto Rico grocery stores.
Starbucks will provide coffee expertise and PepsiCo will sell and distribute the products. In 2016, consumers in markets in the Caribbean, Chile, Colombia, Costa Rica, Guatemala, Mexico, Panama, Peru, Puerto Rico, and Uruguay will see a portfolio of Starbucks ready-to-drink coffee beverages. Over time, the companies plan to expand to other markets in Latin America.
“Our expansion throughout Latin America in 2016 enables us to deliver high-quality Starbucks coffee in a convenient ready-to-drink format to our customers where they live, work and play,” said Michael Conway, president, global channel development at Starbucks.
“PepsiCo’s sales expertise and distribution network makes them the ideal company to work with to unlock the Latin American ready-to-drink market and accelerate local demand for Starbucks,” he said.
Starbucks relationship with PepsiCo began more than 20 years ago when the two companies formed the North American Coffee Partnership, a joint venture that built the ready-to-drink coffee category in the U.S., they said.
“The North American Coffee Partnership is arguably one of the most successful joint ventures in the beverage industry, and with this new agreement, we bring more than 20 years of partnership success to a region where coffee is part of the culture,” said Laxman Narasimhan, CEO of PepsiCo Latin America.
“Together, our highly talented and passionate teams will expand upon the vision set decades ago to create a new blueprint for continued growth in Latin America,” he said.