Starbucks opens its first store in Italy. Frappuccinos are not on the menu



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Thirty-five years after a trip to Milan inspired American entrepreneur Howard Schultz to transform Starbucks, the coffee chain has finally arrived in Italy.

Starbucks will open its first store in the country Friday, cutting the ribbon on a huge "Reserve Roastery" in Milan that does not look much like the small cafes frequented by Italians.

The upscale shop is located in a spacious former post office in Piazza Cordusio, just a short walk from the La Scala opera house. It has a 30-foot bar carved into a single block of Tuscan marble.

The Milan roaster is Starbucks' third after Seattle and Shanghai, and will sell coffees and premium, small batch food by Italian baker Rocco Princi.

And it will target the high end of the market. An espresso costs € 1.80 ($ 2.10), much more than the price of € 1 ($ 1.16) in many Italian cafes.

Starbucks (SBUX) 28,000 stores were opened in 77 markets before arriving in Italy, where coffee culture is taken seriously and where purists most often drink coffee while standing at the counter of a cafe.

Jonny Forsyth, associate director of food and beverages at market research firm Mintel, said the proven strategy of offering very large drinks with large quantities of milk will not work for Starbucks in Italy.

"Such cultural differences can not be ignored," he said. "Starbucks' new Italian stores are significantly focused on local market preferences, such as espressos, as well as custom-made ice cream and pizzas, rather than the traditional Starbucks menu formula."

This means that the Frappuccinos are not on the menu.

milan starbucks at the inside wide
The store is located in a former, spacious post office.

Yet, young Italians can be intrigued by the Starbucks experience, where customers often linger in the store to chat with friends or work on a laptop.

"Although snobbery may prevail in the first place, younger generations are more open," said Alexandre Loeur, an analyst at Euromonitor International, a market research firm. "Starbucks could do well in the medium and long term."

Stools Starbucks Milan
Inside the Milan roaster.

Domino showed that it was possible

Forsyth said that the coffee chain could follow the example of Domino's Pizza (DMPZF), which has carved out a place in Italy despite initial skepticism that an American chain could sell pizza to Italians.

Starbucks has announced plans to open additional stores in Milan with its license partner Percassi starting this year.

starbucks milan outdoor roaster reserve
The premium store will serve "small batch" coffee.

Schultz, who is now President Emeritus of Starbucks, awards a trip to Milan in 1983 for shaping his vision of the chain.

"I walked the streets of Milan and I was captivated, seduced, intoxicated by Italian cafes," Schultz said in a statement. "I rushed to America with a great idea to replicate in the US and everyone thought I was crazy."

CNNMoney (London) First published September 6, 2018: 9:51 ET

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