Starbucks (NASDAQ:SBUX) has officially forayed into the juice business through the acquisition of Evolution Fresh for $30 million, a premium juice producer. This major development was announced last Thursday. With this acquisition, Starbucks plans to reinvent the $1.6 billion super-premium juice segment and considers this as a crucial step in entering the larger $50 billion Health and Wellness sector. [1] Last month, it hired veteran juicer Yohana Bencosme, the former manager of the famous Manhattan juice bar Liquiteria. (See our previous post: Starbucks Could Give the Juice Business a Look)
We believe Starbucks is trying hard to diversify its core operations. It also intends to attract younger generation to its stores with the launch of a juice bar business. This consumer segment, mainly children, has remained distant from its stores. It expects to open juice bars in early to mid-2012 in the U.S.
Last week, Starbucks announced that it would invest $20 million in pre-harvesting credit for coffee producers by 2015, which represents an increase of 37% from last year’s financing. [2]
The stock has been up approximately 5% since its Q3 earnings release on November 3, 2011. (See our previous post: Starbucks Doubles Down on Growth After Solid Results) The stock is going ex-dividend Tuesday with each shareholder entitled to a dividend of 17 cents per share.
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Notes:
- Starbucks Acquires Evolution Fresh to Establish National Retail and Grocery Health and Wellness Brand, Company Website, November 10, 2011 [↩]
- Starbucks to Increase Loans to Coffee Producers, Market Watch, November 13, 2011 [↩]
