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Arla to make iced coffee for Starbucks in Europe

By Guy Montague-Jones , 26-Jan-2010

Starbucks chilled coffee may soon be on European supermarket shelves after the Seattle coffeehouse signed a deal with Arla Foods.

Under the terms of the agreement, Arla Foods will manufacture, distribute, and market Starbucks premium ready-to-drink (RTD) coffee for the European market.

Distribution

Theis Brøgger, an Arla Foods spokesperson, said the deal means that RTD coffee will be marketed under the Starbucks brand in supermarkets and convenience stores, as well as its own coffee shops.

Arla subsidiary Cocio Chokolademælk will manage the majority of the production. Having recently increased capacity at its site in Esbjerg, Denmark, Arla said Cocio is ready to begin production without the need for further investment.

Brøgger could not reveal the size of the Starbucks deal, but Cocio CEO hailed the agreement in a statement as “a breakthrough for Cocio on the European market.”

For Starbucks, Rich DePencier, VP of the consumer products division, said the decision to enter the European RTD coffee market comes on the back of success in North America and Asia.

RTD coffee market

The RTD coffee concept comes from Japan but in recent years chilled coffee drinks have grown in popularity in Europe and North America. A report from the consultancy Zenith published in December 2007 said Europe only had a two per cent share of the world market but that chilled coffee drinks were gaining ground.

In some countries including Austria and Norway consumption rates were higher than in the US which held an eight per cent share of the global market in 2007.

Brøgger could not disclose which European markets Arla and Starbucks would be targeting in Europe but he said that further details would be published soon, along with more specific product information.

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