Add Uruguay to the 60-plus countries in which Starbucks does business. The coffee giant announced last week that it would open its first store during 2018 in the country of 3 million.

The move is a gutsy one for Starbucks for several reasons. Despite the republic’s Italian heritage and proximity to major coffee producing countries, there has not been much of a coffee scene in Uruguay until the past few years. Yerba mate is king and queen in the tiny nation wedged between Argentina and Brazil. Sure, now it is fairly easy to find a good cup of coffee or espresso in Montevideo and smaller Uruguayan cities. But the hot beverage of choice for many Uruguayans is mate. Stroll along one of its beaches, attend a soccer match or hang out in one of the cities’ plazas, and you will note during your travel to Uruguay that the majority of people have a mate gourd in one hand and a thermos of hot water clasped under their arm.

The fact that someone always has some mate to share is one reason why Uruguay’s coffee culture is relatively “undeveloped” compared to some of its neighbors, such as Argentina. The sharing culture of Uruguay is also seen in its nightlife, as many bars sell beer by the one-liter bottle - the point, again, is to pour some into a friend’s or even a stranger’s glass. Hence it is going to take a lot of creative marketing to convince Uruguayans to stow their thermoses and hang out at a trendy cafe.

Another hurdle Starbucks is going to face is the high cost of living that has thrown a curve ball to many Uruguayans. At last count, inflation in Uruguay dipped under an annual rate of 7 percent - the first time that has occurred since 2010. Rising costs in Uruguay has made it hard for many Uruguayans to get ahead; and the costs of coffee drinks and snacks at Starbucks is often more expensive abroad than in the country’s U.S. home base.

As is the case with many countries in South America, foreign food chains have a tough go of it in that market. Starbucks is making a bold move, but if the company opens its first location in the right neighborhood (Pocitos?) and ensures that the menu friendly enough for locals, Starbucks may have a chance. For sure, they had better have a hot water samovar for thermos refills ready in order to get a head start.

Image credit: kimubert/Flickr

About The Author

Leon Kaye

Leon Kaye is the founder and editor of Based in California, he specializes in social media consulting and strategic communications. A journalist and writer since 2009, his work has appeared on Triple Pundit , The Guardian's Sustainable Business site and has appeared on Inhabitat and Earth911. His focus is making the business case for sustainability and corporate social responsibility. Areas of interest include the <a Middle East, sustainable development in The Balkans, Brazil and Korea. He was a new media journalism fellow at the International Reporting Project, for which he covered child survival in India during February 2013. Contact him at You can also reach out via Twitter (Leon Kaye) and Instagram (GreenGoPost). Since 2013, he has spent much of his time in Abu Dhabi, UAE, working with Masdar, the emirate's renewable energy company. He lives in Fresno, California.