Starbucks set for new recipe of success

Starbucks hopes to transform itself from a coffee chain into a broader consumer-product company in China with the opening of a food store.

The new store, in Beijing's Oriental Plaza, serves beef lasagna, cream of mushroom soup and smoked chicken salad, among other dishes.

"The new store, decorated as a Paris coffee shop, is targeting high-end consumers who work nearby and would like to have a nice lunch, afternoon tea or just a coffee break," said Lory Lu, manager of the store. Lu added that company has opened several such shops in Hong Kong.

In June last year, Starbucks acquired San Francisco-based Bay Bread and its La Boulange bakery brand.

Starbucks food portfolio is an important part of the company's core business. According to the company, food now accounts for $1.5 billion in revenue in US company-operated stores and has grown by double digits in each of the last two fiscal years.

At the end of last year, Starbucks opened a Barista coffee store in Beijing, the first of this kind in China, to offer hand-made coffee-based drinks.

"The company understands the complexities of operating in a country where consumers in smaller cities are just getting their first Starbucks and where established big-city coffee drinkers already need upgraded stores," said Belinda Wong, president of Starbucks China.

On Thursday, the Nasdaq-traded coffee chain announced its quarter results, which ended on March 31. Its total net revenue increased 11 percent year-on-year to $3.6 billion.

Net revenue for the China/Asia Pacific segment was $213.6 million, a year-on-year increase of 22 percent.

Starbucks operates more than 700 stores across more than 50 cities in China. The company said China will be its second-largest market by 2014 and will have 1,500 stores by 2015 across more than 70 Chinese cities.