Starbucks set to open its first bakery cafe in South Korea

Starbucks, marking its 21st year in South Korea with more than 1400 stores across the country, will open its first bakery cafe this month.

Starbucks Korea, the local unit of the US coffee giant, plans to open a bakery in Yangpyeong County, Gyeonggi Province, overlooking the Namhan River. It will also feature a bar that serves the company’s tea brand Teavana.

The company has been outsourcing the production of the baked goods it sells at its stores.

The new store, however, will bake fresh bread on site with dough from Shinsegae Food, the food manufacturing arm of South Korean retail giant Shinsegae Group, which owns 50 percent of the South Korean Starbucks franchise through subsidiary E-mart

The new initiative is seen as an attempt to achieve a new breakthrough in South Korea’s overcrowded coffee market.

More than 70 percent of Starbucks sales come from drinks, with food accounting for about 20 percent of sales.

Starbucks has been introducing new baked goods every one or two months to persuade customers to buy more bread or cakes and bakery sales have been growing by more than 20 percent annually.