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Starbucks sees retail coffee demand rise

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Consumer appetite for at-home coffee consumption in the US is growing, with convenience products winning an ever larger share of the market, coffee giant Starbucks said.

Starbucks' president of global channel development Michael Conway said sales in the company's at-home coffee segments had outpaced in-store sales.

Sales rise

US sales of Starbuck's branded packaged coffee were up 10% in the three months to December 27.

Sales of Starbucks-branded K-cups, single serving coffee capsules that are winning an increasing share of the US market, were up 20%.

Starbucks sales of packaged ready-to-drink coffee rose 22%.

Chinese expansion

Globally, Starbuck's in-store sales, including food and non-coffee beverages, were up 8% year-on-year, with traffic up 4%.

Mr Conway said Starbucks was eying new markets in China and Latin America.

"That is primarily a ready-to-drink business for us," he said of the new markets.

Prices locked-in

The company's chief financial officer, Scott Maw, said that coffee prices had already been largely locked in for the 2016 fiscal year, which runs to the end of September.

Starbucks secures its coffee supplies by contract, rather than over the commodity futures markets.

"We are now beginning to price our coffee needs for fiscal 2017 and we'll provide updates as we lock in meaningful volumes," said Mr Maw.


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