With its purchase of Evolution Fresh juice bars, Starbucks plans to expand its business to offer more than coffee,Danny Johnston/AP
Starbucks Corp. said it plans to open a health and wellness-focused chain next year after its acquisition of Evolution Fresh, a California-based premium juice maker, for $30-million (U.S.).
Both moves were announced Thursday.
The announcements come as the world's biggest coffee chain seeks to increase sales by expanding into the $50-billion U.S. health and wellness category that is driving robust growth for retailers including Whole Foods Market Inc.
The Seattle-based company has been expanding the number of products it sells through grocery stores and other retail outlets and recently removed the word "coffee" from its logo to signal its move into broader categories.
"Bringing Evolution Fresh into the Starbucks family marks an important step forward in this pursuit," Starbucks chief executive Howard Schultz said in a statement.
The company's new retail concept, planned to launch in early-to-mid-2012, will be separate from Starbucks cafés and does not yet have a name.
The new chain will "redefine the super-premium juice category and experience" and offer a "wholesome portfolio" of food and beverages, Starbucks said.
Evolution Fresh was started by Jimmy Rosenberg, the founder of Naked Juice. The company uses a heat-free, high-pressure pasteurization process that it says retains more of the nutrients in its products compared with using conventional heat pasteurization.
Evolution Fresh's products are currently sold in Whole Foods and PCC Natural Markets stores on the U.S. west coast. Starbucks plans to expand distribution into additional retail channels and sell the products in its own retail stores.
Over time, Starbucks said it plans to invest in Evolution Fresh facility upgrades as well as its distribution business.
Starbucks expects Evolution Fresh to operate at a modest loss in fiscal 2012 before breaking even in fiscal 2013.
The coffee company, which returned to profit growth in 2010 after a painful two-year restructuring, said its forecasts for fiscal 2012 are unchanged as a result of the acquisition.
Shares of Starbucks are up about 40 per cent over the last 12 months.
Shares of potential rival juice chain Jamba Inc were up 3 per cent at $1.71 after the announcement.