Ready for overpriced juice?

Starbucks is moving into the premium-juice business with its acquisition of Evolution Fresh.

By Benzinga Nov 11, 2011 6:49PM

By John Thorpe, Benzinga Staff Writer


Nearly every day of my adult life, I have seen one or more people carrying around a cup of brand-name coffee. Nearly every time, I almost choked to death on my own laughter.


Now, those same folks will have the opportunity to entertain the frugal half of America by purchasing overpriced juice to go along with their overpriced coffee.


Wednesday, Starbucks (SBUX) announced that it acquired Evolution Fresh, a company that makes premium juices. Starbucks has seen success with an expanded healthier menu to deliver the nutritious, on-the-go options consumers are seeking. With this acquisition, Starbucks will reinvent the $1.6 billion super-premium juice segment, its significant next step in entering the larger $50 billion health and wellness sector.


This acquisition will position Starbucks as a potential leader in the sector, at least as far as retail and service segments of the industry go. With Starbucks locations already situated across the globe, the company is in a position to turn that entire healthy juice market upside down.


With Evolution Fresh, Starbucks bringw a unique, premium juice product to the marketplace through the creation of a differentiated brand and experience -- similar to what Starbucks pioneered 40 years ago for coffee consumers.


Leveraging Starbucks' unique business model -- retail footprint, CPG grocery distribution channels, digital breadth and in-depth customer engagement -- the company believes it can enter an undifferentiated, commoditized product segment and introduce a unique, high-quality product to redefine and grow the super-premium juice market.


"Our intent is to build a national health and wellness brand leveraging our scale, resources and premium product expertise," said Starbucks chief executive Howard Schultz. "Bringing Evolution Fresh into the Starbucks family marks an important step forward in this pursuit."


Starbucks can tap into the $1.6 billion super-premium juice market and hit a milestone in the $50 billion health and wellness sector, added Jeff Hansberry, another executive at the company.


Evolution Fresh was started by the original founder of Naked Juice, Jimmy Rosenberg. He decided to get back into the premium juice business to found Evolution Fresh, one of the only true juiceries left in the industry that still cracks, peels, presses, and squeezes its own raw fruits and vegetables.


This was an opportunity to raise the quality and nutritional benefits in the juice category. Using an innovative technology new to juice called high-pressure pasteurization, Evolution Fresh was able to deliver one of the only "never heated" juice products for an increasingly larger number of offerings, ensuring fresh-tasting and nutritious juices.


"Using high-pressure pasteurization to help ensure the inherent nutrients are kept intact during the juicing process is a key point of differentiation for a growing number of our juices,” said Jimmy Rosenberg, founder of Evolution Fresh. Mr. Rosenberg, who will lead product innovation and development for the brand, continued: "Consumers trust the Starbucks brand to deliver on superior best-in-category quality and taste."


Over time, Starbucks plans to expand beyond Evolution Fresh's current distribution into additional channels, as well as begin to make Evolution Fresh products available in Starbucks' non-franchise retail stores. In order to achieve this, Starbucks will look to make investments over time for upgrades to existing facilities as well as expansion needed for the broadened distribution of the product and for future growth plans for the brand.


More from Benzinga:


2Comments
Nov 11, 2011 8:06PM
avatar
Don't see this kind of place as a real hit.  Jamba Juice has only been moderately successful.  I  also chuckle at those folks carrying around a $4 cup of sugar coffee.  lol. Same people that drive a car they can't afford, buy a house they can't afford, send kids to schools they can't afford and in the end file bankruptcy and walk away from it all and you and I the taxpayers pick up a lot of the tab.
Nov 12, 2011 6:02PM
avatar
I have wanted to buy McD and SBU since day 1.  But i knew that people would not eat  hamburgers and fries, etc. every day.  And, I knew that people would not pay that much for coffee in a paper cup - every day.  Remember the Juce bar in shopping centers that served up delicious, healthy, frothy juce/egg white drink. 
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