Starbucks acquires juice business for US$30M
PORTLAND, Oregon (AP) — Starbucks Corp hopes to do for juice what it’s done for coffee.
The Seattle-based company that changed the way Americans drink their cup of Joe said yesterday that it acquired by juice maker Evolution Fresh Inc for US$30 million as part of a larger effort to move beyond just offering coffee.
Starbucks said it plans to “reinvent” the US$1.6 billion super-premium juice segment with its purchase of Evolution, which is based in San Bernadino, California. The company plans to open a new chain of health and wellness stores in the coming year that will carry Evolution products such as juices and simple foods. Details are still thin on the new chain, but Starbucks described it as a retail model that has never been seen before.
“We are not just acquiring a juice company,” said Starbucks CEO Howard Schultz. “We are using this acquisition to position ourselves, in a broad way, to build a multibillion health and wellness business over time.”
The move is the latest by Starbucks to broaden its business as consumers demand healthier products and it faces growing competition from the likes of McDonald’s and Dunkin’ Donuts. The company has rolled out lower-calorie and lower-fat food options, sugar-free syrups and switched from whole milk to two per cent milk as the default in its drinks. The company also is selling more products, like Seattle’s Best coffee and Via instant coffee, in grocery stores and other retailers.
Starbucks, which estimates that at some point in the future its consumer products business will rival the size of its cafe business, said more than a year ago that it would be looking for potential acquisition candidates. Its last acquisition in 2008 was of The Coffee Equipment Co, which makes the high-end Clover coffee brewing system.
Evolution, started by the founder of Naked juice, is a logical choice for the chain as it seeks to offer healthier options. Evolution, which makes fresh fruit and vegetable juices, has products that are sold at Whole Foods, Safeway, Costco and other select retailers on the West Coast.
Evolution is one of the few larger juice companies that still cracks, peels, presses and squeezes its own fruits and vegetables rather than using pureed or powdered ingredients. It also uses a process called high-pressure pasteurisation to make the juice without heating it.