The world’s leading coffee retailer Starbucks Corporation (SBUX) has decided to give the Americans its signature value-added experience while they sip their fruit juice and has thus taken over Evolution Fresh, a Californian juice maker. Starbucks looks set to strengthen its grip in Health and Wellness sector and will open a new line of outlets focused on nutritious products. Also, the company said that it wants to build a multibillion health and wellness business over time.
The veteran coffee retailer will be selling juice through three channels, first of which will be through Starbucks coffee shops, where Evolution juice will replace the current range of juices available.
Secondly, it will offer its drink through new line of stores that the company plans to open next year. These new stores will sell juice and food and have tables and chairs for customers. The coffee giant will also make the juices available through grocery stores, many of which already sell packaged Starbucks coffee like Seattle’s Best coffee and Via instant coffee.
With the takeover of Evolution, Starbucks will also own the veteran juice maker’s method of making the juices, which is much healthier than other juice makers.
Starbucks has revealed that each bottle will be made by cracking, peeling, pressing and squeezing its own fruits and vegetables, rather than using pureed or powdered ingredients. It also uses a process called high-pressure pasteurization to make the juice without heating it.
The foray into the juice marketplace is part of the ‘good for you’ campaign taken up by the company. It had come up with a new ‘health and wellness strategy’. Starbucks has been making noticeable attempts to offer healthier food spread on its menu card. In 2009, it got rid of artificial colors and flavors and introduced salads, as well as plates of eggs, cheese and fruit. Its stores have also introduced bags of nuts, dried fruit and oatmeal. Starbucks mentions the calories by the side of every food item that they sell.
Many other companies have also started showing the zeal of providing health to its customers. Pepsico (PEP) has established a global nutrition group in the windy city’s West Loop, headed by the company’s chief scientific officer. Among other initiatives, the company wants to roll out savory snacks in which salt content will be less. Northfield, Ill.-based Kraft Foods Inc. (KFT) is developing foods that align with organic principles.
Starbucks Corporation recently registered robust results for the fourth quarter fiscal 2011. Quarterly earnings increased 16% year over year to 37 cents a share. It slivered past the Zacks Consensus Estimate of 36 cents by a penny.
Currently, we prefer to rate the stock as Neutral. Starbucks holds the Zacks #4 Rank, which translates into a short-term Sell rating.
