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Starbucks preps for full-on Swedish invasion

Starbucks coffee shops may soon be a familiar sight on Stockholm streets as the US chain aims to beef up its presence in Scandinavia following a "milestone" deal with a Norwegian partner.

Starbucks preps for full-on Swedish invasion

In advance of its planned conquest of the region’s lucrative coffee shop market, Starbucks has signed a deal with Norway’s Umeo Restaurant Group (URG).

The group, run by Norwegian businessman Jens Ulltveit-Moe, secured the rights to operate the global coffee shop giant in Scandinavia following talks with Starbucks founder Howard Schultz in June, according to Norwegian business daily Dagens Næringsliv.

“We are talking about something in the region of several hundred million (kroner). If we are going to build a brand the right way, it will take time. If we do it right, it will give a good return,” Ulltveit-Moe told the paper.

Starbucks has confirmed the agreement in a statement, expressing satisfaction that it had found “a strong partner in Umeo Restaurant Group for our expansion in Scandinavia”.

Michelle Gass, head of Starbucks operations in Europe, also stressed the significance of the deal

“This is a milestone deal,” she told the Wall Street Journal.

The financial crisis in the eurozone has put the brakes on Starbucks’ long-intended expansion into Scandinavia, a region with a high-standard of living and an established taste for coffee.

“Scandinavia has long been on high on our list. You are among those who drink most coffee in the world and have high purchasing power,” Gass told Dagens Næringsliv.

While Gass refused to say exactly how many Starbucks shops were planned for Sweden and Norway, she told the Wall Street Journal the company is looking to open a “significant” number of stores.

In addition, Starbucks hopes to rely on social media and other innovative PR techniques to build brand awareness.

The Seattle-based brand currently has only a toe-hold in Sweden, with shops at Stockholm’s Arlanda airport, as well as the central train stations in Gothenburg and Malmö.

And while the US-based giant’s presence remains dwarfed by local favourites Wayne’s Coffee and Espresso House, Ulltveit-Moe is bullish on Starbucks’ chances, telling the Wall Street Journal that Swedes and Norwegians have “an appreciation for American products”.

URG, which already runs about 250 licensed restaurants throughout Scandinavia, including Burger King and TGI Fridays, will initially expand the brand in Norway and Sweden and according to the agreement will own all the proposed coffee shops themselves. Further financial details of the agreement with Starbucks are yet to be released.

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COFFEE

#AdventCalendar: Why Sweden used to stockpile coffee in case of crisis

Each day of December up until Christmas Eve, The Local is sharing the story behind a surprising fact about Sweden as part of our own Advent calendar.

#AdventCalendar: Why Sweden used to stockpile coffee in case of crisis
How soon would Sweden stop functioning without a morning cup of coffee? Photo: Henrik Montgomery/Scanpix/TT

It's no secret that Swedes love their caffeine. They drink more coffee than almost any other nationality and have a booming cafe industry. 

And up until the 1990s, they went as far as stockpiling coffee in huge warehouses, so that even in the event of an unforeseen crisis, no person in Sweden would need to forego fika. 

Even though the country hasn't been at war for over 200 years, authorities do their best to ensure that processes are in place to help things run smoothly in the event of an emergency, whether war or a natural disaster. 

And experience from the Second World War, when rations were imposed on many foodstuffs including coffee, showed that keeping the population caffeinated would be a good starting point if the government wanted to keep morale high.

Coffee rationing began in 1940, the first to be introduced, and stayed in place longer than any other food ration in Sweden, until 1951. So up until the 1990s, around 200 food warehouses for times of crisis stored long-lasting foodstuffs such as beans, pulses, rice and sugar.

One warehouse in Lenhovda, Småland, housed 330 tonnes of coffee – enough to brew 100 million cups, should the need arise. It was shut down in 2001, along with most similar storage spots, after the Cold War ended.

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These days, the food stored in supermarket warehouses should be sufficient to sustain the country for between one and two weeks. That's quite a difference from neighbouring Finland, where enough food is stockpiled to keep people going for several months.

Historically, Sweden has had a troubled relationship with coffee, which at several points in history was banned due to fears of its impact on health. In fact, in the 18th century some economists argued that the drink was even harmful to the economy, and indulging was “immorally wasteful”. Naturally, the population didn't take this lying down, but continued to risk prison sentences by continuing to drink the warming beverage. 

Coffee may be no longer officially stockpiled, but it is one of the items that the Swedish Civil Contingencies Agency (MSB) advises individuals to keep as part of their own emergency preparedness kits.

Sweden isn't the only country that took such measures. Switzerland also stockpiled coffee for decades until the practice was abolished only this year, after the government decreed the beverage was “not essential for human life”.

We'll agree to disagree on that point.

Each day until Christmas Eve, The Local is looking at the story behind one surprising fact about Sweden, as agreed by our readers. Sign up below to get an email notification when there's a new article (if you would like to sign up but can't see the box below, drop us an email at [email protected]).

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