International coffee bar chain Starbucks will open its first branch in Israel in September, at Rabin Square in Tel Aviv, Delek Fuel Corporation CEO Giora Sarig announced today. The second branch is scheuled to open four days later on Rothschild Boulevard in Tel Aviv. The Delek-Starbucks partnership is expected to set up 80-100 branches within five years, at a total investment of $20 million.
Sarig said that receiving the Starbucks franchise was another step in Delek’s business development and expansion into new retail fields, based on the group’s business strategy. He said Starbucks planned to open five branches in the central region by year-end, and have 20 branches throughout the country by the end of 2002.
Mark McKeon, president of Starbucks Europe, the Middle East, and Africa, said the chain’s activity in Israel would set new standards for the local coffee scene. He said Starbucks would offer 50 types of coffee and 14 unique mixtures.
In response to the question of whether branches would be opened in gas stations as well, Sarig said, “The only connection between gas stations and Starbucks is that we both sell black liquid. We regard the Starbucks project as an international brand name investment project. We’re not tying it to gas stations.”
Sarig also commented on the claim that Israelis' taste for coffee did not match Starbucks’. “Starbucks allows us to localize taste. We know Israelis like stronger coffee. We plan to create a new product suited to the Israeli market - a double latte that will be stronger.”
Starbucks Israel is a partnership between Delek (80%) and Starbucks (20%).
Published by Israel's Business Arena on 25 July, 2001