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Starbucks acquires Evolution Fresh, plans to expand into juice category

November 14, 2011
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Starbucks Coffee Co., Seattle, announced the acquisition of Evolution Fresh Inc., San Bernardino, Calif. The $30 million acquisition is part of the coffee company’s commitment to evolve and enhance the customer experience with innovative and wholesome products, the company says. It announced plans to reinvent the $1.6 billion super-premium juice segment and said the acquisition is a significant step in entering the more than $50 billion health and wellness sector.

With Evolution Fresh, which currently sells its juices in Whole Foods Markets and PCC on the West Coast, Starbucks will bring 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, it says.

Leveraging Starbucks’ business model aspects, including retail footprint, consumer packaged goods grocery distribution channels, digital breadth and in-depth customer engagement, the company believes it will be able to take a currently undifferentiated, commoditized product segment and introduce a 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 Howard Schultz, Starbucks chairman, president and chief executive officer, in a statement. “Bringing Evolution Fresh into the Starbucks family marks and important step forward in this pursuit. Over the last year-and-a-half we have looked comprehensively at possible opportunities and chose Evolution Fresh because it stood above anything else in terms of premium quality, nutrition and potential for growth.”

Evolution Fresh was started by the original founder of Naked Juice, Jimmy Rosenburg. He returned to the premium juice business with Evolution Fresh, which cracks, peels, presses and squeezes its own raw fruits and vegetables to create juices. The company uses High Pressure Pasteurization (HPP) to deliver one of the only “never heated” juice products for an increasingly larger number of its offerings, ensuring fresh tasting and nutritious juices. Rosenburg will lead product innovation and development for the Evolution Fresh brand under the title of chief juice officer.

“The acquisition of Evolution Fresh supports our growth strategy to innovate with new products, enter new categories and expand into new channels of distribution,” said Jeff Hansberry, president of channel development for Starbucks, in a statement. “Not only are we able to tap into the $1.6 billion super-premium juice market, but the acquisition of Evolution Fresh marks and important milestone for us within the $50 billion health and wellness sector.”

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 company-owned retail stores providing nationwide presence and awareness for the Evolution Fresh brand, the company said. 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.

Additionally, to showcase Starbucks growing portfolio and as consumers become increasingly aware of Evolution Fresh, the company plans to introduce a new health and wellness retail concept that will further redefine the super-premium juice category and experience for consumers unlike any prior existing juice retail, the company said. The retail concept is planned for early to mid 2012 and will share Starbucks’ mission and values, be pioneered by Starbucks partners, which is the company’s term for employees, and provide a new wholesome portfolio of food and beverage offerings.

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