Starbucks Stock: Deep Dive into 3 Essential Suppliers

Katrina Ávila Munichiello is a seasoned editor, author, fact-checker, and proofreader with over fourteen years of expertise in print and digital media.

It's remarkable that Starbucks (SBUX) began as a single coffee shop. Its inaugural store opened in 1971 at Seattle's Pike Place Market. Founders Gordon Bowker, Jerry Baldwin, and Zev Siegl sourced premium whole coffee beans from farms across Latin America, Africa, and Asia—a tradition that continues to this day. Expert roasters carefully craft the beans to highlight a balanced and unique flavor profile.

When Howard Schultz acquired Starbucks in 1987, he introduced the essence of Italian coffee culture, emphasizing relaxed social interactions and a strong community vibe. The menu expanded to include popular teas, baked goods, and fresh food items. Starbucks also grew through acquisitions and began retailing coffee in U.S. supermarkets starting in 1998. Today, the multi-billion-dollar company operates over 21,000 stores across 87 global markets.

Key Highlights

• Regency Centers leases retail spaces to Starbucks throughout the U.S.
• First Capital REIT, based in Toronto, leases many Starbucks locations across Canada.
• Since 2015, Starbucks partners with Tingyi Cayman Islands Holding Corp. to produce and distribute ready-to-drink Starbucks products in China.

Starbucks’ major suppliers span countries including the U.S., Singapore, Hong Kong, Mexico, Indonesia, India, France, and Canada. This article explores three pivotal suppliers contributing to Starbucks’ growth.

Regency Centers Corporation

• Founded: 1963
• Headquarters: Jacksonville, Florida
• Market Cap (Nov 27, 2024): $13.887 billion

Regency Centers (REG) provides leasing services to Starbucks. Positioned as a leader in the dynamic real estate sector, Regency generated 0.8% of its annualized rent from Starbucks as of December 31, 2023.

Established by Martin and Joan Stein, Regency specializes in owning, operating, and developing grocery-anchored shopping centers in affluent communities. Headquartered in Jacksonville, Florida, the company partners with real estate investment trusts (REITs) and maintains rigorous standards for property acquisitions.

Regency owns 483 centers across the U.S., encompassing over 61 million square feet of leasable space as of Q3 2024. Their focus is on open-air shopping centers, often referred to as power centers.

When leasing to Starbucks, Regency prioritizes locations near thriving neighborhoods or community hubs in key markets, anchored by major grocery stores, and characterized by above-average household incomes. This strategy ensures steady revenue and a strong market position.

First Capital REIT

• Founded: 1993
• Headquarters: Toronto, Ontario, Canada
• Market Cap (Nov 27, 2024): $3.764 billion

First Capital also leases retail spaces to Starbucks. As one of Canada’s foremost urban property owners, developers, and managers, First Capital aims to deliver sustainable cash flow and capital growth. Starbucks accounted for 0.6% of its revenue as of December 31, 2023.

Operating in over 142 Canadian neighborhoods, First Capital manages 22.3 million square feet of leasable space as of 2023. The company invests in open-air retail properties featuring grocery stores, banks, restaurants, and other amenities. Their acquisition criteria emphasize well-located retail-centric urban properties with strong sustainability and growth prospects.

Tingyi Cayman Islands Holding Corp.

• Founded: 1991
• Headquarters: Tianjin, China

Tingyi Cayman Islands Holding Corp. (HKG: 0322), known as Master Kong, manufactures and markets Starbucks’ ready-to-drink beverages in China. Starbucks partnered with Tingyi in 2015 to establish a foothold in China’s rapidly expanding coffee and energy drink market, valued at approximately $6 billion at that time.

Quick Insight

The collaboration with Tingyi enabled Starbucks to tap into China’s booming multi-billion-dollar coffee and energy beverage industry.

China stands as Starbucks’ fastest-growing market outside the U.S., boasting over 6,500 stores in 250 cities across mainland China by 2024.

Tingyi and its subsidiaries produce instant noodles, ready-to-drink teas, bottled water, juices, and snacks throughout China. Their ambition is to become the world’s largest distributor of Chinese food and beverage products.

Starbucks’ Waste Reduction Initiatives

In 2022, Starbucks set an ambitious goal to reduce waste by 50% by 2030. Their strategy includes phasing out single-use plastics and encouraging customers to use reusable cups or Starbucks-provided alternatives. The company has cut plastic content in single-use cups by 20% and eliminated plastic straws. Pilot programs, such as reusable cup trials at Arizona State University and washing stations in ASU and Oahu, Hawaii, are underway to promote sustainable practices.

New Leadership at Starbucks

Brian Niccol took over as chairman and CEO of Starbucks in September 2024. Previously CEO and chairman of Chipotle, Niccol led significant revenue growth and an 800% increase in stock price. Facing a sales slowdown, Niccol aims to revitalize Starbucks by refocusing on creating warm, inviting coffeehouse experiences with personalized service.

Origins of Starbucks Coffee

Starbucks sources its coffee from over 450,000 farmers across 30 countries in Latin America, Asia Pacific, and Africa—the renowned "Coffee Belt." Its Costa Rica farm serves as a research hub for more than 600 coffee hybrids and varietals that form the core of Starbucks’ coffee offerings.

Conclusion

From a single Seattle storefront to a global brand with 21,000 stores in 87 markets, Starbucks’ success relies heavily on its worldwide supplier network. New partnerships, such as with Finland-based Huhtamaki for molded fiber lids on compostable cups, highlight Starbucks’ commitment to sustainability. These innovations are being piloted in stores across California and Minnesota, reflecting the company’s ongoing evolution and dedication to environmental responsibility.

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