Pacific Coffee aims to cause a stir

PUBLISHED : Thursday, 01 December, 2011, 12:00am
UPDATED : Thursday, 01 December, 2011, 12:00am


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A touch of wine seems to have done wonders for Pacific Coffee, helping it to grow rapidly on the mainland.

Since state-owned China Resources Enterpris, maker of Chinese wines Huadiao and Er Wotou, acquired 80 per cent of Pacific Coffee from Chevalier Pacific 18 months ago, the chain's presence on the mainland has grown from five shops to 33 and is slated to go up to 50 in the next two months.

The group's general manager for strategic planning and investor relations, Vincent Tse Tan-hon, said: 'To expand our network, we will explore alternative markets that others have not yet developed.'

That includes products such as Huadiao mocha, a mixture of Chinese yellow wine and mocha, and Er Wotou chillino, iced coffee mixed with the strong Chinese liquor that could have an alcohol level of over 50 per cent. Tse said new flavours such as these have found favour with customers.

The coffee chain is also working with banks, companies and universities to set up coffee booths in their premises.

'Setting in-house coffee booths mean we don't have to pay any rent and can pass on the rental savings to our clients, who in turn can enjoy our coffee at prices 30 per cent below retail rates,' Tse said.

CRE also plans to open coffee shops at its high-end Ole hypermarkets, install coffee machines and sell coffee capsules in shops, offices and even on the streets. 'The profit margin with such machines is very attractive,' Tse said.

Pacific Coffee's current share of the mainland market is only a fraction of that of rival Starbucks, which opened its 500th outlet in October.

CRE recently said it aims to open 1,000 outlets in the mainland to take on Starbucks, which is working on plans to triple its number of its outlets to 1,500 by 2015.

Tse said coffee consumption on the mainland will see explosive growth in the coming decade.

According to Japanese trading company Marubeni, the market is set for a 20 per cent expansion every year in the near future.