The South African Coffee War

Seattle Coffee Company has taken the home ground advantage and is beating Starbucks at its own game.

This year Seattle Coffee will open its 210th store whilst Starbucks is sitting far behind with only 12 and we shouldn’t be expecting any more according to Business Insider.

It looks like Cape Town, won’t be joining Becky, Kwa Zulu Natal and Gauteng in the Pumpkin Spice Latte craze come Holloween time.

Why the lukewarm performance?

The brand is not producing the required return on investment. Although in-store sales are great, according to Taste Holdings, which hold the local license of the brand. The added royalty fees are also keeping things costly.

The startup costs of a Starbucks store is almost 3x the cost of setting up a Vida Cafe. According to Hitesh Patel, director of new business Vida e Caffe, it costs R1.5 million to set up a Vida whilst Starbucks can go for R5 – R8 million.

Now that means that Becky is paying premium prices for her Triple Vanilla Vente Soy Latte. Not fetch.

Seattle gets in on the ground floor

Ironically, Seattle co-founder Peter Howie attributes their success to Starbucks. Seattle took inspiration from the brand and added some South African flavour.

Exclusive Books approached Seattle top partner with them and open stores across South Africa. The first being Exclusive Books, Cavendish.