Starbucks To Expand Into Premium Juice Market
Starbucks – the top-shelf coffee shop – has already expanded their offerings to include breakfast sandwiches and sweets. Smartly and profitably so. So it should come as no surprise that the company is in expansion mode again.
The coffee empire announced on Thursday that it had purchased Evolution Fresh, a maker of premium juices and cut fruit, for about $30 million in cash in an effort to branch out into healthier offerings.
The deal will also reap a tidy profit for Fireman Capital Partners, the private equity firm that took control of Evolution Fresh last year. The buyout firm, which specializes in consumer brands like Hudson Jeans, expects to reap about a 40 percent internal rate of return, according to a person briefed on the matter.
The new product line will take a two-wing approach.
As part of Starbucks’s plan, the company is seeking to roll out Evolution Fresh products at its own stores, as well as through newer retail outlets.
Starbucks’s move is the latest in recent years to diversify. It already offers food that goes beyond coffeehouse treats, including sandwiches and hot breakfast items.
Now it is moving into juices, as beverage giants seek to tap into demand for healthier drinks. Starbucks is also facing a seemingly endless procession of competitors in its core coffee business, including Dunkin’ Donuts and more upscale rivals.