SALT LAKE CITY, July 14, 2011 - As part of its continued efforts to develop China’s Yunnan Province as a high-quality coffee growing region, Starbucks Coffee Company (NASDAQ: SBUX) today announced the signing of a Memorandum of Understanding (MoU) with Ai Ni Group, one of Yunnan Province’s most established coffee operators and agricultural companies. The MoU will pave the way for Starbucks and Ai Ni Group to form a joint-venture company that will purchase and export high-quality arabica Yunnan coffee beans, as well as operate dry mills in the Yunnan Province. Starbucks will have operating control of the joint-venture company.

The MoU signing ceremony was conducted during the inaugural 2011 U.S. & China Trade, Culture & Education Conference. Governor Qin Guangrong, Yunnan Provincial Government and Governor Christine Gregoire, State of Washington, were in attendance, and John Culver, president, Starbucks Coffee International, and Liu Minghui, Founder and Chairman, Ai Ni Group, signed the MoU on behalf of their respective companies.

“Starbucks Yunnan Coffee Project reinforces Starbucks coffee leadership in China, our second home market outside of the United States, and will help fuel our continued growth as we seek to serve customers through the more than 1,500 stores we expect to have in the market by 2015,” said John Culver, president, Starbucks Coffee International. “Starbucks has always been committed to buying and serving the finest-quality coffee to our customers and Yunnan will play an important strategic role in ensuring our long-term supply of premium coffee.”

Conference Chair Governor Christine Gregoire, State of Washington, said, “This is great news for Starbucks and for the state of Washington, home to some of the world’s most innovative and globally-competitive companies, including Starbucks.” She added, “Today’s announcement shows that what Washington state has to offer is in demand around the world.”

This partnership follows closely after Starbucks earlier commitment to collaborate with the Yunnan Academy of Agricultural Science (YAAS) and People’s Government of Pu’er City, Yunnan Province, to help local farmers promote responsible coffee-growing practices and develop high-quality coffee locally. Through the numerous Starbucks Yunnan Coffee Project planned initiatives, including the increased and direct sourcing of Yunnan coffee, the investment in and operation of coffee processing facilities, and establishment of a Starbucks Farmer Support Center, Starbucks aims to develop a complete value-chain in China – from coffee seed to its authentic Starbucks Experience in stores.

“This win-win partnership is an important step forward, as part of our broader joint efforts with the Yunnan Government and the YAAS, to elevate Starbucks C.A.F.E (Coffee and Farmer Equity) Practices across the vast geographies of Yunnan Province; allowing us to make a real impact in the areas of ethical sourcing, environmental stewardship and community involvement,” added Jinlong Wang, president, Starbucks Asia Pacific and lead for Starbucks Yunnan Coffee Project. “Since the introduction of Starbucks South of the Clouds Blend^TM in 2009, we have remained committed to bringing the distinctive Yunnan coffee taste to even more of our customers and coffee-lovers around the world.”

“The new joint-venture company will combine Starbucks global best practices and coffee expertise with Ai Ni Group’s established coffee-farming model to create a better future for the coffee farmers and communities in Yunnan,” said Mr. Liu Minghui, Founder and Chairman, Ai Ni Group. “Ai Ni Group is proud to partner with Starbucks in this endeavour as we share a common vision and ambition to establish Yunnan as a globally recognized premier coffee growing region.”

In addition to the joint-venture company with Ai Ni Group, Starbucks also plans to set up its wholly-owned Farmer Support Center in Pu’er, Yunnan Province. The Farmer Support Center will seek to provide agronomy consultation services and support to members of the coffee-farming community across China, in particular, those within the Yunnan Province. As part of the MoU, the Starbucks Farmer Support Center will also provide counsel to the Ai Ni Group on three different aspects, namely, the provision of coffee seeds for Starbucks recommended coffee varietals; agronomy support for Ai Ni Group’s demo coffee farms; and technical assistance on the set-up of its coffee wet mill.

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