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Starbucks eyes Latin American market

ESCAZU, Costa Rica--Starbucks Corp. has long bought some of its best beans a few dozen miles from this ritzy suburb of Costa Rica's capital.

Now it is betting Costa Rica, and other coffee-rich Latin American nations, will be a source not only of fine Arabica, but also of affluent customers eager to trade their traditional chorreado drip coffee for what Starbucks here calls an alto latte.

Some are eager to embrace it.

“It's a coffee shop with a lot of variety. We have nothing like that in Costa Rica,” said Armando Madrigal, 26, a pharmaceutical-sales representative drinking an iced coffee at Starbucks' flagship Costa Rican store, at the fancy Avenida Escazu shopping center.

The Starbucks is near a Max Mara store, an IMAX movie theater and upscale French and Italian restaurants.

His companion, Melanie Ascanio, was less impressed. It's too expensive, the 20-year-old university student said. Moreover, the flavored drinks don't highlight the storied quality of Costa Rican coffee, she added.

“It's all about fashion,” Ascanio said of Starbucks. “It's all about the name on the cup.”

The contrasting opinions at this one table underscore the challenges — and opportunities — Starbucks faces in Latin America, the region where it buys the majority of its beans.

Coffee has deep roots in Latin America, of course. Yet in many countries that grow it, including Costa Rica and Colombia, coffee is mostly brewed at home, and many balk at paying high prices to buy it elsewhere. Latin Americans, with the exception of Brazilians, drink less coffee on average than consumers in the United States or Northern Europe.

Starbucks nonetheless hopes the region's booming middle class, heavily influenced by the U.S., will heed the siren's call.

One obstacle for the company is the time-honored Costa Rican chorreado, which involves pouring hot water into a coffee-filled cloth bag hanging from a wooden stand and watching the brown liquid slowly trickle into a cup.

Another hurdle comes from the small-time but savvy local operators like Manuel Dinarte, a national barista champion who runs a truly homegrown operation: He built the furniture in his coffee shop and roasts his own coffee.

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Beijing's East Cathedral on Wangfujing Street is reflected in the window of a Starbucks Coffee store on Feb. 9, 2004. Starbucks Corp. is betting Costa Rica, and other coffee-rich ...

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