Esquires Coffee adds Chinese joint venture
Kiwi coffee company Cooks Global Foods has partnered with a Chinese retail and property giant to build 30 Esquire Coffee cafes in the southern province of Hunan.
Cooks which is listed on the NZAX, signed a joint venture agreement with Shenzhen-stock exchange listed retail and property company BuBuGao (BBG) to develop 30 Esquires Coffee cafes in the province by 2020.
Cooks already has a network of 21 cafes in China with another 150 planned. It currently has 71 cafes in seven countries and is aiming for global network of 800 by the end of this decade.
BBG has taken a 49 per cent stake in the joint venture and will place cafes in its shopping malls.
Cooks will manage the cafes through its wholly-owned Chinese master franchisee Beijing Esquires Management.
BBG has revenue of nearly 12.3 billion renminbi ($2.7b), employs more than 70,000 people and operates more than 373 retail outlets in the Hunan, Jiangxi, Sichuan, Chongqing, Guangxi, and Guizhou provinces, including 156 supermarkets and 29 shopping malls.
Cooks executive chairman Keith Jackson said the agreement was an endorsement of the potential for Esquires Coffee in China.
"The venture is a continuation of our strategy to drive growth in China by partnering with significant domestic businesses that can provide the resources, retail expertise and local knowledge that are pre-requisites for success in the region," Jackson said.
BBG chairman Tian Wang said demand for branded coffee in China was growing at rates that outstrip the rest of the world.
Esquires Coffee would fill an important retail role in BBG's shopping centres, he said.
Cooks has a similar joint venture with Jiajiayue Group (JJY) supermarket chain to open 30 cafes in the Shandong province near Beijing.
JJY is one of the largest companies in Shandong, employing almost 30,000 staff and operating more than 550 supermarkets.
Jackson said Cooks was looking at signing more joint ventures in China.
It was also developing packaged coffee for sale through supermarkets in China in six to nine months, he said.
Earlier in May Cooks also signed a master franchise agreement with Egyptian food service entrepreneurs Yasser Hamed and Samy Nada.
The contract runs for 10 years with a further right of renewal and could result in the development of 50 cafes in Egypt.
Esquires Coffee already operates 20 cafes in the Middle East.
Cooks owns the intellectual property and master franchising rights to Esquires Coffee Houses worldwide excluding New Zealand and Australia.
Cooks shares were unchanged on Monday at 14 cents.