Japan chugs chilled Starbucks like soda

Starbucks introduced a new drink flavor this week called "Paris." It comes in a sealed cup with a straw on the side, costs a bit less than an 8-ounce latte — but can be found only in convenience stores in Japan.

Paris is the latest in a line of ready-to-drink chilled coffees called "Discoveries" that Starbucks sells only in Japan, Taiwan and South Korea, markets where beverage competition is cutthroat.

In Japan, many new drinks cycle off the shelves in weeks because space is so limited and consumers so discerning.

Starbucks figures the ready-to-drink coffee market in Japan is worth $13 billion to $14 billion, compared to about $1 billion in the United States.

"It's their cola," said Gerry Lopez, president of Starbucks' global consumer-products group.

This year, Japanese consumers will buy 100 million cups of Discoveries, he said.

Lopez's group sells a host of Starbucks-branded products — including coffee beans, ice cream, liqueurs and bottled Frappuccino — in grocery and convenience stores.

It brings in about 4 percent of Starbucks' overall revenues but is growing fast.

Net revenues in the third quarter were up 24 percent to $87.1 million.

Starbucks dominates the ready-to-drink coffee market in the U.S., where bottled Frappuccino and a canned espresso drink called DoubleShot accounted for 94 percent of the segment in 2005, according to the research and consulting firm Beverage Marketing Corp.

Starbucks' ready-to-drink business is preparing to vault out of its North American stronghold through an expanded partnership with PepsiCo.

Last week, the companies said they will move into other markets, beginning with China, and will eventually include countries where there aren't Starbucks shops.

Starbucks has separate partnerships for ready-to-drink beverages in Japan, Taiwan and South Korea.

It began selling Discoveries two years ago in Japan and Taiwan. It has more than 900 stores in those two markets.

In May, it expanded Discoveries into South Korea, which has more than 200 Starbucks shops.

U.S. companies regularly sell drinks in Asia that Americans can't buy at home. Some have names that are uniquely American.

Coca-Cola markets a hugely popular line of canned coffee in Japan called "Georgia," after the company's home state.

Discoveries cost about $2 for a 6.7-ounce cup and have a shelf life of about two weeks.

They have a stronger coffee flavor than bottled Frappuccinos and must be refrigerated, unlike bottled Frappuccinos.

"We tested a variety of sample products and heard from Japanese consumers that they wanted a coffee drink that had a bold coffee presence that wasn't overpowered by the milk," said Joanne Kaufman, product research and development manager for Starbucks.

Melissa Allison: 206-464-3312 or mallison@seattletimes.com