Monday, March 26, 2012

Juiceheads: Starbucks Flexes its Muscles As It Enters the Juice Market


Last November, Starbucks made good on rumors that CEO Howard Schultz was interested in branching out into the premium juice market when it purchased Evolution Juices for $30 million. On March 19, the first Evolution Juice Bar was opened in Bellevue, WA. The company plans to offer its "premium fresh squeezed mixology" through individual stores and through distribution in grocery stores. Similar to its 2007 market strategy as discussed in class, Starbucks will now be entering into a market more commonly known by Odwalla and Jamba Juice.

The company is more likely to be associated with wellness as perceived by creating the third space that promotes coffee's ability to bring people together and a lifestyle of premium customization. Now, that strategy is expanding to include wellness that highlights health benefits and has told its investors it plans to revolutionize the juice industry by focusing on retail footprint, grocery distribution, digital customer engagement, and of course by continuing to focus on the customer.

What is important to note here is why Starbucks focused on Evolution Juices versus other potential market players and how it fits in the future of the company. Evolution touts itself as one of the only true juiceries in the industry in that it peels, cracks, and presses its on fruits and uses a specialized process called HPP to keep nutrients throughout the juicing process. This will be key in the marketing of this new offering as Starbucks has taken the idea of personalized customization and marketed it as a lifestyle enhancer, one that allows you to be able to express yourself and relate to those similar to you. This $1.6 billion premium juice market will only complements the company's position within the $50 billion health and wellness industry. With the weight of Starbuck's global presence, the company sees little competition that will be able to compete with the visibility of the brand. Having learned from the over saturation of its past, the company's biggest competitor is likely to be how it moves forward in branding Evolution to better reflect the pure, natural, premium ingredients that fit into it's larger branding image.

http://investor.starbucks.com/phoenix.zhtml?c=99518&p=irol-newsArticle_pf&ID=1629169&highlight=
http://www.reuters.com/article/2012/03/20/us-starbucks-juice-idUSBRE82I05Y20120320
http://www.nasdaq.com/article/starbucks-taking-a-shot-at-energy-juice-drinks-20120326-00772

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