Starbucks to begin brewing in Russia after decade of lukewarm response

After once losing its trademark, coffee chain finally opening first café

August 2007

A cup of black coffee is a three calorie beverage. Add a teaspoon of sugar and a splash of milk and you're up to 35 calories. But order a frozen coffee drink and you've turned a low calorie beverage into a 500-plus calorie liquid dessert. 

Consider that Second Cup's large (24 ounce) Chillatte with whipped cream serves up 540 calories, 23 grams of fat (18 of them saturated) and 18 teaspoons worth of sugar. Even worse for your arteries is Tim Horton's large (20 ounce) Chocolate Mint Iced Capp Supreme made with cream which delivers 640 calories, 30 grams of fat (20 of them saturated fat) and 20 teaspoons of sugar. That's a full day's worth of saturated fat in just one beverage.

Starbucks joins retailers Wal-Mart Stores Inc. and Carrefour SA in seeking to enter Russia, where consumer spending rose 24 per cent last year, outstripping the rest of Europe. Russians are expected to spend the equivalent of $12.5 billion (U.S.) eating out by 2009, after annual increases of more than 7 per cent, according to OAO Rosinter Restaurants Holding, which operates T.G.I. Friday's and Benihana eateries.

"Russia is hugely important as a region," Carol Pucik, another Starbucks spokesperson, said yesterday. "It's a primary market for us. It gives a lot of opportunities. It has a large population, a coffee-drinking culture."

Starbucks first registered its trademark in Russia in 1997, the year before the government defaulted on $40 billion of domestic debt and devalued the ruble, wiping out the life savings of millions of people overnight.

Five years later, Starbucks lost the right to the brand after a Moscow lawyer who specializes in claiming unused trademarks succeeded in winning the rights. That ruling was overturned last year, after two years of litigation, said Evgeny Arievich, a lawyer at Baker & McKenzie LLP in Moscow who represented Starbucks.

The Mega Mall store will make Russia the 43rd country in which Starbucks operates, Bovey said. The company recently opened stores in Brazil and Egypt and plans to enter India.

Starbucks' local partner in Russia is M.H. Alshaya Co., a Kuwaiti retailer that operates cafes in 10 countries outside its domestic market, according to Bovey.

The U.S. coffee chain, which was founded in 1971 and named for the coffee-loving first mate in the novel Moby Dick, had 14,396 stores worldwide as of July 1. The company's long-term goal is for 40,000 cafes globally, half of them outside the U.S.

The Mega Mall in Moscow's Khimki is operated by Ikea, the world's largest home-furniture seller. Anchor retailers include France's Auchan SA and Finland's Stockmann Oyj, said Ikea Russia spokesperson Oksana Belaychook.