Starbucks reveals its grocery ambitions
The company plans to surprise people with the volume and variety of its supermarket products.
"In the next 12 to 18 months, we will be unveiling new products and entirely new categories," chief executive Howard Schultz told the German magazine Der Spiegel. "We're going to build a major multibillion-dollar business in the grocery industry for Starbucks, both domestically and around the world."
It's clear Starbucks isn't content to just stay in the beverage world. Prepare for some surprises, Schultz added. "I think people are going to be quite surprised over the next few years at what Starbucks is capable of doing," he said.
Will Starbucks feel the pinch from rising coffee prices? Check out analyst comments in the following video.
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So can we expect to see Starbucks-branded chicken tenders or potato chips? The company isn't giving any specifics. But it has said it wants to build a portfolio of billion-dollar brands inside and outside its stores. It spent $9 million last year researching new food, drinks and equipment.
So far, Starbucks has focused on its Via instant coffee, its Frappuccino beverages and the Tazo tea brand.
Get ready for some big changes. But really, where else could Starbucks go in the U.S.? It's pretty much tapped out the opportunities for new cafes. Sure, there are still some places in America where you won't find a Starbucks for miles, but the prime locations are all taken.
The company made some bad real-estate decisions in the past, and is slowly opening more stores, but the real growth is in international expansion. Within the U.S., the growth will be in key partnerships and licensed deals.
Last year, Starbucks brought in nearly $9 billion on its coffee shops and retail business. But the global consumer packaged-goods business had only $707 million in sales -- paltry by comparison.
And that's where Schultz is focused. He has told shareholders that the grocery business will one day rival the success of the coffee shop segment.
One important partnership is Starbucks' deal with Green Mountain Coffee Roasters (GMCR), which makes the popular Keurig line of one-cup brewing systems. Starbucks coffee is headed to the Keurig K-Cup packs in November. Green Mountain sold 2.9 billion of those K-Cups last year, a 75% increase from the year before.
Starbucks thinks the deal with Green Mountain will generate around $1 billion.
Starbucks is having the strongest financial year in its history, Schultz told Der Spiegel. And in an ironic twist, the foundering economy is contributing to its success. " In the last few years, our stores have in many ways become a respite for people seeking refuge, especially during bad times," he said. "In this sense, we've created something of an affordable luxury."
What's wrong with a publically traded company expanding its product line? Should Google have just stayed with only making search engines?
I've found Starbucks Coffee...has Extremely high prices for what you buy there...
Why would anyone, in their right mind, shop there for high price
Millions of us find their coffee, in its many varieties, quite good. Their cafes are clean and comfortable (Take note Dunkin Donuts) and quiet (Take note McCafe). If you don't like the venue or their coffee, fine. But I travel quite a bit and never find an empty Starbucks. They must be pleasing a lot of customers.
Are you a child? You said,"Yet another company has sold out to chase the almighty dollar." Do you even understand what a business does? Starbucks is not a non-profit organization. They are not an educational institution. They exist to create wealth for shareholders. Period. It is called capitalism, and it makes the world a better place by providing jobs, opportunity, and a higher standard of living. Tell me, where else are all those tattoed, pierced, freaks going to go for jobs if not at a Starbucks? No, Starbucks needs to do all they can to grow profits and market share. It is the American way.
I personally have not entered a Starbucks since 9/11/2001 when it came out on the news that a Starbucks near ground Zero charge for price for water when people came into the store covered in debris needed water to wash the dust from their eyes. Their CEO the next day apologized saying he would give a full refund if they would bring the receipt to the store.
Besides I only drink Black Coffee and Dunkin Donuts gas the best Black Coffee
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