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Starbucks juices up its business with a 'health and wellness' chain

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By Noel Young, Correspondent

November 11, 2011 | 2 min read

Starbucks is moving way beyond the coffee business. It has bought juice maker Evolution Fresh for $30 million - and plans to "reinvent" the $1.6 billion super-premium juice segment - just as it shook up the coffee business 40 years ago.

The famous Starbucks logo

Starbucks plans a new chain of health and wellness stores in the coming year that will carry Evolution products such as juices and simple foods. Starbucks said it was a retail model that hadn't been seen before.

Starbucks CEO Howard Schultz declared, "We are not just acquiring a juice company. We are using this acquisition to position ourselves, in a broad way, to build a multibillion health and wellness business over time."

Starbucks has been facing growing competition from McDonald's and Dunkin' Donuts in the US. More than a year ago it said it was looking for potential acquisition candidates. Evolution, which still cracks, peels, presses and squeezes its own fruits and vegetables, was started by the founder of Naked juice. Its products are sold at Whole Foods, Safeway, Costco and other retailers on America's West Coast.

It does NOT use pureed or powdered ingredients and high-pressure pasteurisation produces the juice without heating it, giving a higher nutritional quality while maintaining the taste.

Starbucks said the new chain - "an entirely different type of store"- would launch on the West Coast . Each would be roughly the same size as a Starbucks café. Starbucks will also carry Evolution products in its coffee shops.

"We understand the beverage business better than anyone else," said Schultz . He said they were replicating their understanding of beverage capability and "adding the theatre and romance" of their coffee stores.

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