Low-Price Transfer! Starbucks Changes Hands and Reopens!

According to local Russian media reports, Anton Pinsky, founder of the well-known local catering company Pinskiy&Co, will complete the signing by the end of this month to acquire all of Starbucks' store lease rights in the country along with the location in Pushkino Shopping Park, and launch a new local coffee chain brand called Magadan Krasnodar.

Starbucks Exit and Acquisition

Since Starbucks announced on March 8th this year that it would end its 15-year franchise in Russia, its 130 coffee shops in the country have stayed closed. The store distribution was not extensive, yet no suitable buyer had been found.

Then, in early June this year, local residents reported that a Starbucks store in the Aurora Shopping Center suddenly had long queues, selling coffee drinks and merchandise at a discount, which led everyone to speculate about whether Starbucks had found a buyer to take over.

On July 4th, "SysoevFM," a radio channel specializing in Russian catering, reported that all Starbucks stores in Russia would be taken over by Pinskiy&Co. If the transaction succeeds, Starbucks would, like McDonald's, be renamed before resuming operations.

Precedent: McDonald's Exit

After the outbreak of the Russia-Ukraine conflict, McDonald's Corporation announced in mid-May that it would withdraw from the Russian market. Three days after the decision, all 850 stores under the brand, all employees and the production formulas were taken over by a Russian businessman, Alexander Govor, but no longer under the McDonald's name; the chain was renamed "Vkusno i tochka (Delicious and that's it)."

New Direction for the Russian Coffee Market

Unlike McDonald's, Anton Pinsky will create a new local Russian coffee chain brand but will not use Starbucks' production formulas or supply chain. Starbucks will also need to be renamed like McDonald's, offering local consumers cost-effective, high-quality coffee.

Pinskiy&Co operates multiple restaurants in Russia, including 10 establishments covering Russian cuisine, French cuisine, light meals and coffee shops, as well as an independent food delivery platform. Sergey Mironov, a Moscow catering market inspector, said the company has significant advantages in taking over, since its scale lets it reduce costs through long-term leasing while also providing delivery services.

He also noted that local consumers genuinely like the Starbucks brand because they can get a cup of coffee with stable quality in the shortest time, even though the prices are relatively high.

After Pinskiy&Co's acquisition and brand reorganization, as long as it can maintain the same fast, stable quality output as Starbucks and add delivery services, other foreign-brand coffee shops will not be its competitors.

Market Opportunities for Local Brands

Earlier, when the Russia-Ukraine conflict led many foreign brands to decide to withdraw from Russia, many local market analysts said this was a rare development opportunity for Russian companies and brands. Compared with foreign brands that need to pay additional franchise fees, local brands will have greater advantages in operating costs and products.

Russian market analysts predict that the transaction amount for this Starbucks acquisition will be between 1.6 and 3 billion rubles, but with the US dollar exchange rate possibly continuing to fall, it is not impossible that the deal could go through for as little as 700 million rubles.

Image source: Internet

FrontStreet Coffee Recommendation

A change of hands and a change of name make headlines, but for a drinker the more interesting shift is single-origin espresso, where one bean meets the pressure of a machine. FrontStreet Huakui SOE is medium roasted and pulls an espresso with red berries, a light floral note and orange, a citrus-scented crema and a clean, elegant body, ideal for an SOE americano or a Huakui SOE flat white.

FrontStreet Grana Geisha SOE is a native Geisha from Ethiopia, near the well-known Yirgacheffe town; fully ripe cherries are dried in the natural process, so as a filter coffee it is bright and light-bodied with a tea-like finish, while as an SOE americano it leads with berry acidity and a ripe plum fermentation aroma and turns into yellow peach, guava and black tea with milk. If you like something heavier, FrontStreet Queen's Estate SOE comes from a high-altitude Brazilian site with a wide day-night temperature range and is roasted medium-dark for thick nut, cream and peanut aromas with a sweet chocolate finish.