Multibranding at Starbucks

If and when the ubiquitous coffee culture cools off after its long reign, Starbucks will be ready with a fridge full of other food products under various brands. This multibrand strategy is important because it facilitates revenue growth without the expense of opening new cafes--and it reinforces the company's toehold in non-coffee products.

Evolution Fresh juices, a 2011 acquisition, will give Starbucks its intro to the fresh-juice refrigerated section of supermarkets like Whole Foods. (Facebook: 10,700 likes for Evolution Fresh.) The company is smart to make the most of established grocery relationships in its marketing channel. Plus from a profit perspective, doesn't it make sense to sell your own products in your own outlets? That's why Evolution Fresh is replacing the Naked Juice line of fresh juices that Starbucks currently sells in its stores. And adding new Evolution Fresh snack bars to Starbucks menu boards.

In addition, Starbucks is partnering with Danone on a line of Greek yogurt parfait-style products, to be marketed under the Evolution Fresh brand. The idea is to sell them in Starbucks stores and through the grocery distribution channel. This is another bit of diversification that will help Starbucks offer more things to more people without going too far out on a limb. Again, it makes sense to boost a home-grown brand rather than bring in outside brands.
 
Starbucks not only has high awareness and positive associations among its customer base, also has a very cost-efficient social media platform for promoting itself and its brands (Facebook: 35.2 million likes; Twitter: 4.8 million followers).

And in the corporate social responsibility area, Starbucks is testing new community stores. These specially-designated stores donate a portion of each transaction to local programs for education, youth, health, etc. The newest community store in Seattle, for instance, expects to donate about $100,000 to the local YWCA. 

Starbucks and Evolution Fresh

Is the coffee culture giving way to the juice culture? Starbucks opened its first Evolution Fresh juice bar yesterday, in Bellevue, Washington. "Mixologists" blend--well, hand-craft--different fresh fruit juices (cold pressed, of course, never heated) and whip up healthy smoothies for breakfast, lunch, and dinner.

Starbucks acquired Evolution Fresh as the cornerstone of a new healthy-brand empire. CEO Howard Schultz says that successful juice bars ring up $1 million + per unit. Evolution Fresh is known for super-premium juices, and Starbucks is building on that brand's image and reputation to create an entirely new restaurant brand for this fast-growing "healthy" segment.

Juice bars aren't new, especially in Europe. Marrying the marketing might of Starbucks with the cachet of a differentiated juice brand could open new product and profit opportunities.