Coke takes on Starbucks with Toronto store
Coca-Cola North America is attempting to get a lucrative piece of the coffee drinker’s market by launching a new retail store in Toronto in what could be seen as a challenge to Starbucks Corp.
With pop consumption declining in North America, the beverage giant is looking at ways to expand its offerings, and is on the verge of opening a large retail-oriented store in Toronto as part of a test market, real estate sources say. And the bottler seems to be going after the upscale Starbucks customer.
According to one source, Coca-Cola will open a 4,000-square-foot retail space in Toronto’s tony Yorkville area for coffee-related products.
This month, the company launches Coca-Cola Blak, a “sophisticated premium blend of Coca-Cola, natural flavours and coffee essence,†according to a company news release.
Marketing support for the new brand was released last month during the red carpet pre-show broadcast at the 78th Annual Academy Awards, with 15-second spots presenting the drink as a glamorous new star.
Coke is represented in Toronto by CB Richard Ellis, but the real estate company declined to comment on Monday. A Coca-Cola spokesperson could not be reached for comment.
The Toronto store, meanwhile, is thought to be envisioned as the first retail outlet in what could be a chain of Starbucks-type competitors.
“If you’re looking in an area like Yorkville, you’re obviously trying to make a statement,†John Crombie, national retail director for real estate company Cushman & Wakefield LePage, told the Toronto Star.
Crombie said the typical coffee shop could range from 500 to 1,500 square feet. Rents in the area, which has some of the highest retail rents in Canada, could range from $60 up to $200 per square foot per annum, said Crombie.
“If you’re planning an outlet of that size, you’re going to make a big splash,†he said.
The new outlet could potentially sell Coke paraphernalia in addition to coffee-related products such as Coca-Cola Blak, said one source.
Coke already has products in the markets for power drinks, bottled water and juice, but this time seems determined to break into the lucrative coffee-drinking market.
–Canadian Press
The electronics lines are often seen as not as profitable as the soft lines, since the margins are so low.