Starbucks: More than just coffee

Starbucks, the guru of premium coffee, is expanding its horizons. This week it acquired Evolution Fresh, created by the same founder of the college favorite Naked Juice. Starbucks has been able to purchase the company for a miniscule amount of $30 million- it is only 10% of 3rd quarter revenues.

It is a large part of the company’s attempts at diversification. Over the years we have noticed the additions of grilled sandwiches, oatmeal, and more recently, Bistro Boxes. It is now planning to expand into the “healthy” lifestyle beverage market with an entirely new line of juice products based on Evolution Fresh. Rather than incorporating the concept into its coffee shops, Starbucks will open a number of juice bars across the U.S. beginning in 2012.

Its expansion in the beverage industry is also an attempt to combat pressures from rising coffee giant Dunkin' Donuts and small-shop premium sellers. With competition to deliver variety, quality, and low prices Starbucks will face challenges in its main business segment. The juice segment, however, will offer entry into a new market and a new stream of revenues. If Starbucks can maintain its lead in providing the unique coffee experience and provide the same across all of its concepts, there is no doubt it has the ability to dominate a number of the beverage markets.

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Zeena Advani