Posted by Dale Buss on November 11, 2011 03:12 PM
Starbucks CEO Howard Schultz lately has diversified his personal brand into becoming a cheerleader for U.S. job creation. Now he's engineering another stretch, as he takes his company further afield from coffee into new beverage arenas.
That's what Starbucks intends to do after its just-announced purchase of Evolution Fresh for $30 million. The coffee icon plans to use the deal to push well beyond its roots in java into both quick-serve delivery of juice-based products as well as a beefed-up presence in CPG -- and beyond.
"This is the first of many things we're going to do around health and wellness," Schultz said. "We're not only acquiring a juice company, but we're using this acquisition to build a broad-based, multi-million-dollar health and wellness business over time."
That approach could end up echoing what PepsiCo has done over the last decade or so as it has swung away from -- and at the same time transformed -- its original carbonated-soft-drink and salty-snacks businesses with all manner of better-for-you initiatives and brands. Starbucks has been clearing the decks for this kind of move for a while, having scaled back the number of its coffee outlets, for instance, and having taken "coffee" out of its logo. Schultz called the acquisition the next step in his "blueprint for growth" that aims to transform Starbucks into a global multi-channel grocery and quick-serve brand.
First, Starbucks will get Evolution into its own retail operations, where the brand will replace PepsiCo's Naked juices. Starbucks also will be driving its juice brand into supermarkets, which Schultz expects to contribute more and more to the company's overall results. And Starbucks will be figuring out how to open juice outlets that are likely to compete with its new rival, Jamba Juice.
Schultz is proving what a big appetite he has since re-taking the helm of his company three years ago. Now we'll see how good Starbucks is at digestion.