Starbucks brews first China blend to perk up business

SINGAPORE (Reuters) - U.S. coffee chain Starbucks, keen to boost business in China, is brewing ahead of the Lunar New Year a limited-edition blend that includes, for the first time, Chinese beans.

The "South of the Clouds" blend, named after the Mandarin meaning of the semi-tropical, southwestern Yunnan Province, was unveiled in Singapore on Monday, a week after its Greater China debut, said Starbucks' Beijing spokeswoman Caren Li.

The coffee blends arabica beans from Latin America, Asia Pacific and the western Baoshan region of Yunnan, the main coffee-growing province in China, the ancient homeland of tea.

"Our priority is local relevance," Li told Reuters. "We are very proud of this coffee and we have full confidence that it will be popular with our customers."

Coffee grown in Yunnan, which borders Asia's top coffee producer Vietnam, has been available in China for over a decade. It is often sold as a cheaper alternative to imported beans.

Li said the blend offers an opportunity for Starbucks to expand further in one of the world's biggest economies.

"We spent more than three years working in Yunnan with local farmers and local coffee suppliers. The coffee has gentle acidity, medium round body and a soft herbal flavor in the finish and a cocoa mouthfeel."

Li declined to give any figures on production or details about the blend, which she said is being sold in a "preview launch" before any Yunnan-sourced lines may be rolled out.

The blend is on sale as "coffee of the week" in Starbucks' 700 outlets in Greater China, as well as stores in Singapore and in Malaysia ahead of the Lunar New Year which starts next week. It will be on sale in China until February 19.

Starbucks opened its first outlet in mainland China in 1999 and its president, Martin Coles, told Reuters last week the company sees China as one of its fastest growing markets, even as it closes down stores in other markets racked by recession.

(Reporting by Gillian Murdoch, writing by Miral Fahmy, editing by Chris Buckley)