Starbucks is trying to extend its brand beyond coffee to dominate the entire food and beverage market.  Starbucks recently spent $70 million to build a plant that will produce cold-pressed juices.  In the past two years, Starbucks has also acquired Evolution Fresh Juices, La Boulange Café and Bakery, and Teavana.   La Boulange pastries are now available in 3,000 Starbucks locations.  Teavana just opened its first tea room in New York.  Evolution Juice is currently available in Whole Foods.  Starbucks also has plans to open stores dedicated to the brand that include features allowing customers to mix their own juices.  Starbucks’ new ventures are working as sales are up 11.7% in the first three quarters of 2013.

Starbucks has struggled to lure customers into its stores in the afternoon hours as morning hours are more popular for coffee drinking.  Currently, beverages, mainly coffee drinks, account for almost 75% of the company’s sales.  Many retail analysts wonder if introducing so many new items is sustainable for Starbucks.  The logistics of introducing new food items in thousands of locations has also been cumbersome as many locations don’t have space for prep work.  Also, some consumers worry that Starbucks isn’t focusing as much on its competitive advantage, which is coffee.  Yet, Starbucks believes that in order to continue to grow in the food and beverage sector, it needs to pursue more than coffee.

Discussion Question:

What growth strategies are Starbucks pursuing?

 

SOURCE: Stephanie Strom, New York Times, October 8, 2013