Global Food Brands Turn to Chinese Partners to Expand in China
3992 Mins Read
Major global food and beverage companies are increasingly collaborating with Chinese capital to strengthen their presence in China’s competitive market. From Starbucks to Häagen-Dazs, global names are handing over equity in their China operations to local private equity (PE) firms or exploring partnerships to secure growth.
According to the Financial Times, corporations are reviewing plans to transfer operating rights to Chinese PE firms to navigate what has been described as a “threefold hardship”: intensifying local competition, a slowing Chinese economy, and ongoing geopolitical tensions between the U.S. and China.
Starbucks, the world’s largest coffee chain, recently agreed to sell a 60% stake in its China business to Hong Kong-based Boyu Capital, founded by Jiang Zhicheng, grandson of former Chinese President Jiang Zemin. The $2.4 billion deal will allow Starbucks to earn royalties from China sales while Boyu Capital and Starbucks aim to more than double the current 8,000 stores to over 20,000 in the coming years.
In the ice cream segment, General Mills is exploring a new operator for its roughly 400 Häagen-Dazs stores in China. French retailer Decathlon is also considering selling part of its China equity, while coffee brands Peet’s and Costa, owned by The Coca-Cola Company, and Japanese convenience store chain Lawson are weighing similar restructuring options.
An executive at a private equity firm noted that while many boards had considered exiting China amid U.S.-China tensions, there is renewed recognition of the value of having a strong local partner.
These moves highlight a strategic shift among global food and beverage players, who are increasingly relying on local expertise and investment to expand in China’s vast and competitive market, ensuring that iconic brands continue to thrive while adapting to the unique challenges of the region.
