Starbucks, Whole Foods, a match made in heaven
Starbucks (NASDAQ:SBUX) , everyone’s favorite coffee company, has done especially well so far this year. Shares are up by more than 34% this year as the company has hit on all cylinders. Comparable store growth alongside geographic expansion has allowed the company to grow at rates the street would have never predicted. While many love the company’s traditional coffee offerings, the company has increasingly looked to expand its menu to meet the demands of consumers. Through the Evolution Fresh acquisition last year the company became an immediate player within the juice space.
Today, it was announced Starbucks has decided to leverage its past partnerships to grow the relatively new brand. While many consumers are accustomed to seeing Starbucks products down their Whole Foods aisles, you may be seeing more of the company’s products in a matter of months. Evolution Fresh will be sold at all Whole Foods Market (NASDAQ:WFM) stores nationally. The natural player will also sell the Evolution Harvest line of snack bars, fruit bars and trail mixes. From an analyst perspective, the deal bodes well for both companies. For Starbucks, management now has the ability to grow an unknown brand into a potentially huge revenue stream. Up to this point, the Evolution Fresh line of products has performed well at its current distribution points. For Whole Foods, the products should fit well as the two brands share a similar customer base. Moreover, Whole Foods caters to customers at the higher end of the range, these customers can therefore afford the higher ticket items.
The drinks will be expensive to say the least, at $2.99 to $6.99 for a 15.2-ounce bottle of juice, many customers will be unable to afford the products. However, some brands of super premium fresh juices can cost even a dollar or two more than that. Shares of both companies are down in the early session on Tuesday, alongside steep broad market declines.
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