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Starbucks Keeps Growth at a Boil

Boxes of Via, which Starbucks hopes to bring to Russia, are displayed at the company?€™s headquarters in Seattle. Anthony Bolante

SEATTLE — Starbucks plans to introduce its Via instant coffee brand to Russia, the world’s second-largest market for the product, following a Chinese debut within the next year, CEO Howard Schultz said in an interview.

The world’s top coffee chain has been struggling to revitalize growth by slashing costs and introducing items like Via. The company recently finished a two-year business revamp that included slashing costs and closing more than 900 stores around the world.

Schultz said he saw no sales impact from recent economic jitters in the United States and Europe. He is now looking toward emerging markets like China and Russia.

Starbucks’ U.S. business, which accounts for more than half of the company’s profits, has returned to growth, and Schultz is now focused on introducing new products to drive sales growth.

Key among them is Via instant coffee, which is sold in the United States, Canada, Britain and Japan. Schultz said Starbucks planned to build Via into a billion-dollar brand, with expansions into China and later on, Russia.

Starbucks now has just over 700 units in China, Taiwan and Hong Kong, but the company sees the world’s most populous nation and third-largest economy as its next major market.

The chain has just 31 cafes in Russia, but they post blockbuster sales and the brand has cachet there, Schultz said.

The top three instant coffee markets in 2009 were Japan, Russia and Britain with 2009 sales of $2.3 billion, $2.1 billion and $1.2 billion, respectively, according to Euromonitor.

Via, which debuted in September, is on track for $100 million in sales in its first year. Starbucks expects Via to have a “slightly positive contribution” to fiscal 2010 earnings, even with marketing and advertising. “We’ve got a winner and we want to feed it,” Schultz said.

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