Starbucks launches its China Coffee Innovation Park to fulfill its ambition to fully build vertically integrated market

Starbucks launches its China Coffee Innovation Park to fulfill its ambition to fully build vertically integrated market

October 24 - 2023

Coffee Geography Magazine

Starbucks launched China Coffee Innovation Park (CIP), fulfilling its scaled vertical integration ‘from bean-to-cup’ across one market – a first for the company globally. Since the CIP’s initial announcement in March 2020, Starbucks has made two additional rounds of investments, making it the largest investment in any Starbucks coffee manufacturing and distribution center outside the United States at US$220 million. The CIP holds the distinction of being designed to be Starbucks most energy efficient and sustainable coffee manufacturing and distribution center in the world.

“As one of the largest consumer markets in the world, China presents tremendous opportunities for Starbucks. The Coffee Innovation Park highlights Starbucks foresight in elevating the supply chain through digitalization and advancing our sustainability agenda, enhancing our unique competitive advantage as we accelerate our global growth,” said Laxman Narasimhan, CEO of Starbucks Coffee Company. “I couldn’t be prouder of the China team’s visionary thinking. As Starbucks largest and fastest-growing international market, we will continue to deepen our investment and reinforce our unwavering long-term commitment to the China market.”

Laxman Narasimhan

Laxman Narasimhan, CEO of Starbucks

“The Coffee Innovation Park holds important significance for Starbucks in China and globally. It not only showcases Starbucks unrivalled coffee leadership, fulfilling our scaled vertical integration in China ‘from bean-to-cup’, but also sets a new benchmark for sustainability in China’s coffee industry. Its immersive experience center further elevates China’s specialty coffee industry with a multi-sensory showcase of the coffee journey. The CIP is yet another testament that Starbucks purpose and commitment to China go far beyond a cup of coffee,” said Belinda Wong, chairwoman and CEO of Starbucks China.

Belinda Wong, chairwoman and CEO of Starbucks China.

Belinda Wong, chairwoman and CEO of Starbucks China.

Located in the city of Kunshan, an hour from Shanghai, the 80,000m2 CIP features a roasting plant deploying Starbucks most energy efficient technology, a state-of-the-art integrated distribution center (IDC), and an immersive experience center. It imports high quality Arabica green beans for roasting, packaging, storage, and distribution, while showcasing the ‘bean-to-cup’ coffee journey to visitors and providing coffee related training - all in one location. 

With capacity to supply all Starbucks coffee locations in China, including as the company continues to grow, the CIP will use advanced eco-friendly technologies to blend and roast high quality Arabica green beans sourced from more than 30 countries around the world, including China. 

It will power up Starbucks speed and agility in product innovation, enabling the company to produce quality coffee tailored for China. Starbucks China has cultivated a team of 20 local roasters, including the only female Master Roaster for Starbucks globally. Carefully selected from among 60,000 Starbucks China partners, every roaster in the CIP has undergone 600 hours of intensive training in the United States and China. Through cultivating local coffee roasting talent, leveraging Starbucks more than 50 years of global roasting expertise combined with local insights, the CIP will be able to develop a variety of unique blends and roast profiles in future that are created to meet the evolving tastes of Chinese customers.

Freshly roasted coffee will be delivered to Starbucks stores market wide from the IDC, which serves as the center of Starbucks China’s distribution network, directly supplying thousands of Starbucks stores in the region. As Starbucks most highly automated distribution center globally, the IDC uses advanced automation technologies to handle over 90 percent of volume. Also noteworthy is its 34-meter high fully automated storage and retrieval system, which makes the IDC six times more space-efficient compared to a conventional Starbucks warehouse. 

The CIP pushes the envelope in sustainability as the only coffee manufacturing and distribution center in China designed and built based LEED Platinum and China Green Building Three Star1, leading sustainability standards for carbon emissions, energy and water use and waste. It features Starbucks most energy efficient roasting technology globally, which achieves significant reductions in energy consumption and carbon emissions compared to other roasting plants in Starbucks global network.

Sustainability is embedded across all aspects of the CIP’s design, construction, roasting, and operations: 

• Energy: Around 20 percent of energy needs is supplied by over 26,000m2 of installed solar panels 

• Waste: The CIP is projected to achieve 90 percent recycling of waste annually.

The CIP enables Starbucks China to be the first market in the company’s global network to complete a fully scaled vertical integration ‘from bean-to-cup’, as well as the first coffee retailer in China to do so2 with: 

• Open Source Agronomy – Starbucks has been operating a Farmer Support Center in Yunnan since 2012, helping local farmers grow higher quality coffee, and bringing high quality Yunnan coffee to the world. 

• Sourcing – Ethically-sourcing high quality Arabica coffee beans from more than 30 countries around the world including China. 

• Blending – The CIP will enable Starbucks to develop a variety of unique blends and roast profiles and quickly adapt to the evolving tastes profiles and preferences of Chinese customers. 

• Roasting – The CIP will enable local coffee roasting at scale leveraging 52 years of Starbucks roasting expertise, providing freshly roasted coffee to customers across China in a sustainable way. 

• Distribution – The IDC will deliver freshly roasted beans to Starbucks stores, enabling Chinese customers to enjoy high quality handcrafted Arabica coffee beans. 

• Brewing and Crafting – Starbucks partners deliver exceptional coffee experiences with passion and craftsmanship at the Reserve Roastery Shanghai, China’s first ever immersive coffee wonderland, and across the more than 6,500 Starbucks stores in the market. 

• Talent - Starbucks has also cultivated generations of coffee professionals across every stage of the coffee value chain.

Transcending traditional notions of a manufacturing site, the CIP features an immersive Experience Center that provides a creative and unique interpretation of industrial tourism with an authentic, vivid showcase of the ‘bean-to-cup’ coffee journey. Through the Experience Center, Starbucks brings to life the miraculous power of a small coffee bean, for more people to experience the romance and artistry of coffee craft, learn about the many hands working together to ensure a sustainable future for coffee, and be inspired to do their part to support planet-positive industries and lead eco-friendlier lifestyles. 

Comprising of 12 touchpoints, visitors are transported across the world virtually to experience the sights, sounds and smells of faraway coffee origins from China’s Yunnan province to the farms in Costa Rica. They will witness roasting in-person and up close as they learn about the latest innovations and sustainability practices at different parts of the coffee value chain. For the most loyal fans, select Starbucks Rewards Gold members will be able to immerse themselves in this wondrous experience in the near future. 

Starbucks has been contributing to building a specialty coffee industry in China since entering the Chinese mainland market in 1999. It has been operating a Farmer Support Center in Yunnan since 2012, to provide open‐source agronomy resources to local coffee farmers. Earlier this month, it established the Starbucks China Innovation and Tech Center, focused on incubating human-centric digital retail innovations for the China market, where a new Starbucks store opens every nine hours. Starbucks currently has a market footprint of more than 6,500 stores across more than 250 Chinese cities. It continues to ramp up its growth in China as it strives towards its ambition to operate 9,000 stores across 300 Chinese cities by 2025 and invest over US $450 million.