Starbucks finally getting real competition?

Joh A. Benckiser is buying Caribou Coffee for $340 million in its second acquisition of a US specialty coffee maker after snapping up Peet's.

By Charley Blaine Dec 17, 2012 4:57PM
© Tim Boyle/Getty ImagesMaybe the question should be asked. Is there a new rival emerging to Starbucks (SBUX)?

Joh A. Benckiser, a German-Austrian consumer-products company, said Monday it has agreed to buy Caribou Coffee (CBOU) for $16 a share, or $340 million. The price is a 30% premium to Friday's closing price of $12.32.

But investors are betting the price may be sweetened. Caribou shares were trading at $16.01 Monday afternoon. It had traded as high as $16.64. Starbucks was up $1.15 to $54.51.

The deal seems to be establishing a pattern. This summer, Benckiser and merchant-banker BDT Partners of Chicago bought Peet's Coffee & Tea, the California specialty coffee roaster, for about $1 billion. And it has a minority stake in D.E Master Blenders 1753, a Dutch-based coffee and tea company.

We asked the company if it had aspirations for taking on Starbucks, the global coffee giant. A spokeswoman said the company wouldn't comment.

Caribou is the nation's second-largest coffee-shop operator -- but a long second -- after Starbucks. As of Sept. 30, the Minneapolis company had 610 coffee houses, including 202 franchised stores, in 22 states, the District of Columbia and 10 foreign countries. It also sells coffees in supermarkets, warehouse stores, hotels and the like.

Caribou had the potential of emerging as a strong regional competitor to Starbucks, as I noted in "3 contenders for the next Starbucks." The other contenders were Dunkin' Brands (DNKN) and Panera Bread (PNRA).

Benckiser is a holding company founded in 1823 to sell chemicals in Europe. Starting in the 1950s, the German company started moving into consumer businesses. It owns 80% of Coty, the cosmetics maker; and Jimmy Choo, maker of sleek women’s shoes. The company owns 15% of Reckitt Benckiser (RGBPY), the British household products giant, whose brands include Lysol, Calgon water softeners and French's Mustard.

Now based in Vienna, Joh. A. Benckiser is owned by four members of the Reimann family, who have has controlled Benckiser since 1858. Their combined net worth is at least $20 billion, according to Bloomberg News. The company is led by CEO Peter Harf.

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16Comments
Dec 17, 2012 8:32PM
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Who in their right mind would pay that much money for what Starbucks calls coffee???

Dec 18, 2012 10:52AM
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I thought starbucks rival was apple?  This is the other company who specializes in getting sheeple to pay twice the price for something you can easily get next door
Dec 18, 2012 2:18PM
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never liked starbucks coffee, over rated!
Dec 18, 2012 3:40PM
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Buy some stock in both of these companies, then make your coffee at home and laugh twice as hard all the way to the bank.
Dec 18, 2012 4:40PM
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I'd rather go to a coffee shop that is locally owned than to one of these chains.
Dec 18, 2012 10:51AM
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Starbucks is my superstar stock followed by Green Mountain Coffee.  I look at the line at my local Starbucks each morning and all I hear is "cha-ching"!  Along with the popularity of the Kuerig GM Coffee has exploded and I'm already up $14K in 3 weeks. 
Dec 18, 2012 3:51PM
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I can set in my kitchen, grow a beard, smoke a cigar and act important for a lot less than that!
Dec 18, 2012 3:18PM
Dec 18, 2012 1:37PM
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Regardless of stock performance, drinking corporate coffee should violate some moral compass in one's body. Of all the things that should stay in a local economy, coffee must be at the top. Corporate coffee sucks (Caribou is not excluded...obviously) - stop supporting these companies entirely and drink local coffee.
Dec 17, 2012 7:49PM
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Starbucks biggest competitor is Port-o-San-  the Porta Potty company who plans to heat its contents and call  it coffee.
Dec 18, 2012 3:15PM
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Starbucks has gotten really crappy. And did it buy up all the green coffee to make certain it had a monopoly or is there a global issue in green coffee production?
Dec 18, 2012 2:02PM
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Coffee and Bottled Water! can't believe people buy that!
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