• Sat
  • Dec 20, 2014
  • Updated: 9:34am


Starbucks is a global coffee company founded in 1971 in Seattle, Washington, as a roaster and retailer of whole bean and ground coffee, tea and spices. Today it is the largest coffeehouse company in the world, with 20,366 stores in 61 countries. Starbucks went public on June 26, 1992 at a price of $17 per share (or $0.53 per share, adjusted for subsequent stock splits) and closed trading that first day at $21.50 per share. Starbucks Corporation's common stock is listed on NASDAQ, under the trading symbol SBUX. 


Swiss coffee machine maker is Starbucks' 'secret weapon'

US chain's 'secret weapon' is the automatic models made by Swiss firm Thermoplan as it intensifies its charge on China and Asia-Pacific

PUBLISHED : Thursday, 07 August, 2014, 5:29am
UPDATED : Thursday, 07 August, 2014, 5:29am

As Starbucks Corp intensifies its charge on China, one of its little-known weapons is a family-owned company in a sleepy Swiss village.

Thermoplan, based among cow pastures in Weggis, a town of 4,400 inhabitants near Lucerne, makes the automatic machines for espressos and cappuccinos in each of Starbucks' almost 21,000 shops around the world.

"Fully automatic machines are something very German and Swiss," said chief executive Adrian Steiner, an electrical engineer who has worked for Thermoplan for 17 years.

"It's a product that matches the technology of those countries. It's like the watch industry, where you have everything from education to the people, the quality, value, to reliability."

With 230 employees, Thermoplan, which exports 98 per cent of its wares, is emblematic of Switzerland's globally oriented small and medium-sized enterprises that bank on craftsmanship to drive their business.

A free-trade accord between Switzerland and China and the rising popularity of creamy coffee drinks in the Asian giant, with China set to become Starbucks' biggest market outside the United States, have given Steiner cause for optimism.

While Switzerland is home to big listed companies such as Nestle and UBS, 99 per cent of its businesses are SMEs, generating two-thirds of employment.

Thermoplan joins companies from watchmakers such as Swatch Group and producers of precision tools like Mikron Holding setting their sights on more business from Beijing and Shanghai.

Starbucks said last month that it planned to add 800 new stores in China and Asia-Pacific in the 2015 financial year.

Thermoplan's foray into the world of coffee can be traced back three decades when it made whipped cream machines.

Then, in 1999, with just 20 employees, its fortunes soared on an exclusive global contract for Starbucks. The Seattle-based coffee-shop chain had decided to replace traditional espresso machines, which require baristas to prepare grounds and steam milk, with automatic models.

With the contract, Thermoplan's machines have become ubiquitous at Starbucks outlets from New York and Paris to Beijing.

A basic Thermoplan model starts at 7,000 Swiss francs (HK$59,700), with bigger self-cleaning ones going for as much as 17,000 francs. The Mastrena, which Thermoplan produces just for Starbucks, was introduced in 2008.

Thermoplan's contract with Starbucks is up for renewal next year. Both companies declined to comment on the possibility. Steiner said his company's ability to work swiftly and innovatively was what clinched the deal, calling it "the power of the big and the flexibility of the small".

Assembling a machine, primarily by hand, takes six to eight hours. At one point, Thermoplan was delivering 84 machines a day to the world's largest coffee-shop operator. Today, the Seattle-based giant accounts for a third of Thermoplan's sales. Other clients include Nestle, Google and Costa Coffee.

Before a machine heads out the door, it must successfully brew 100 cups of coffee. A trained technician from one of Thermoplan's service partners is on site within four hours to fix a problem wherever a machine breaks down. Modular components kept maintenance simple, Steiner said.

For now, the company plans to ride the gains from the spreading social phenomenon that coffee drinking has become.

"Ukraine, Russia, Kazakhstan - they're just discovering cappuccino," Steiner said, sitting in a room overlooking a soccer pitch that Brazil's national team used as a training ground for the 2006 World Cup. "It's fascinating how a drink like a cappuccino is changing the world."


Related topics

For unlimited access to:

SCMP.com SCMP Tablet Edition SCMP Mobile Edition 10-year news archive



This article is now closed to comments

About coffee, let me first of all declare my interest. I drink a brand of French Coffee (Strength 5) from Waitrose and it cost GBP2.50 250 Grammes and it makes about 30 cups, so it's about 10 pence (HK$1.30) per cup.
They do say coffee sellers's gross profits are about 1000% (yes, 1000 thousand percent) and basically it consists of coffee beans, good water, and the usual costs of running any business, ie electricity, salaries, etc.
HOw any company can make such hugh profits and their ill-afford "customers" are suckered into paying so much per cup is easily explained, the customers are too stupid to know how much exploition is going on to the detriment of the cocoa growers, and how easily they can make a good cuppa for themselves at a fraction of the cost. They preferred to pay just to be seen at the right places.
China, the ultimate noveau riche "paradise", is the most expensive of all Starbucks. Just ask for your Mocha and compare that with what you have to pay for wherevere you're from. Pity really, because they've just literally just walked out of the paddyfields.
So, Thermoplan, get in there with your rightfully deserved share of the "profits" or "REWARDS" or whatever you care to call it, and argue for a proper amount due to the makers of all that happens, i.e the cocoa growers and we would all enjoy our good cup of java.
That'd be the day!
Starbucks aren't exactly known for the quality of their coffee. So, it seems a logical progression, then, for their product to be made in a soulless way. It certainly won't improve the flavour.
"...French Coffee (Strength 5) from Waitrose and it cost GBP2.50 250 Grammes..."
sells in Park n' Shop for $61.90HK, i.e. almost £5.00 - twice the price of the UK!
So just think how much profit the supermarkets are making on coffee!
You brush aside the "usual costs of business" as if they're insignificant, when in fact they're much more significant than the cost of coffee beans. Wages, taxes and rent are what you're really paying for. (Taxes are the reason Starbucks is expensive in China.)
The cost of the raw materials for almost any product, from cars to T-shirts, is a small fraction of the price of the finished good. Obviously. Industrial firms need huge factories filled with expensive machines to make their products, just as retailers need to rent hundreds or thousands of shops and fill them with trained staff.
Somehow I think 10p a cup isn't going to cut it.
The correct cynical response to this story is that these machines are a way to cut staff costs. Training baristas to make an espresso is time-consuming and expensive, and after all that you have to pay them more because the skills you just gave them made them employable elsewhere. McDonald's doesn't have this problem, and nor will Starbucks with a fully automated coffee machine. Just what the world needs: more dead-end jobs that offer no skills.
Starbucks does a really good Shepherds pie.
("It's fascinating how a drink like a cappuccino is changing the world.")
I nominate Howard Schultz a creator and CEO of Starbucks to be the Nobel Peace Prize of its next recipient.
("It's a product that matches the technology of those countries. It's like the watch industry, where you have everything from education to the people, the quality, value, to reliability.")
Rightly so.
In an architectural trip in Switzerland years ago, I visited La Chaux-de-Fonds a city well known for its watch making. I think I really got a cultural shock at the bar when my drink went through a calibrated measuring cup attended by the bartender. The drink served couldn’t taste right to me and the measuring took all the pleasure out drinking at the bar.


SCMP.com Account