Thursday, October 23rd9.4°C
23888
23372

Starbucks puts on baker's apron

Starbucks Corp. is looking to offer a more tempting menu, with a $100 million cash deal to buy a small bakery chain.

The Seattle-based coffee shop chain says baked goods from La Boulange will start replacing its current lineup early next year, starting with French pastries such as the croissant. Products will start appearing in Bay Area stores first then roll out nationally.

Starbucks also says it plans to make the San Francisco-area bakery into a national presence in the years ahead.

"We'll take it one store at a time, starting in metropolitan areas around the U.S. where there's demand," said Cliff Burrows, president of Starbucks Americas.

Food has become an important part of Starbucks' revenue stream in recent years, with the segment now generating $1.5 billion a year. About a third of the purchases in its U.S. locations include a food item.

La Boulange, which also serves salads and sandwiches in a casual sit-down setting, has 19 locations in the Bay Area. The chain is being sold to Starbucks by Next World Group, a privately held investment firm based in San Francisco.

As Starbucks faces increasing competition from fast-food chains serving specialty coffees, the company has increased its profits through an expanding mix of consumer products, such as its ice cream and Tazo-branded K-Cup portion packs. The La Boulange deal could eventually feed into that mix.

This holiday season Starbucks plans to sell a single-cup coffee machine called Verismo that lets people brew lattes and other drinks at home. And moving beyond its iconic cafes, the company earlier this year announced plans to open its first Evolution Fresh Inc. juice store.

Additionally, the deal positions Starbucks to enter a fast-growing segment of the restaurant industry currently dominated by Panera Bread Co., which offers freshly baked bread, sandwiches and salads in a sit-down setting for slightly higher prices than most fast-food chains. St. Louis-based Panera has about 1,500 locations, up from about 1,000 five years ago. Sales have grown by 73 per cent over that same time, according to food industry researcher Technomic Inc.

With the acquisition of La Boulange, Starbucks says it hopes to popularize the French bakery experience in the U.S. the same way it brought the experience of the Italian espresso bar to the masses.

"After more than 40 years, we will be able to say that we are bakers too," CEO Howard Schultz said in a statement.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14312.07-235.64
S&P CDNX808.00-14.28
DJIA16461.32-153.49
Nasdaq4382.847-36.632
S&P 5001927.11-14.17
CDN Dollar0.8894-0.0001
Gold1235.20-10.30
Oil80.73+0.60
Lumber330.40+1.70
Natural Gas3.622-0.037

 
Okanagan Companies
Pacific Safety0.12+0.02
Knighthawk0.01-0.005
QHR Technologies Inc1.15-0.02
Cantex0.055-0.025
Anavex Life Sciences0.198+0.006
Metalex Ventures0.05+0.005
Russel Metals32.53-0.56
Copper Mountain Mining2.10-0.07
Colorado Resources0.145-0.005
ReliaBrand Inc0.013+0.001
Sunrise Resources Ltd0.05-0.01
Mission Ready Services0.405-0.055

 



23631

FEATURED Property
16232199 880 Christina Place
4 bedrooms 3 baths
$549,900
more details
image2image2image2
Click here to feature your property
Please wait... loading


Weakening global growth worries

The Big Picture Growth worries persist Worries about weakening global growth and its potential impact on the US economic recovery roiled markets around the globe this week. Europe continues to be the ...


Keep it rubber side down

This time of year, I always worry about which friends of mine will get caught going off the road in adverse weather conditions. With a little preparation most accidents can be avoided. Having won the...


Big bank predicts rate hike

Photo: Thinkstock.comThe end of record-low rates is nigh, according to one major bank, which has taken a stance and predicted when the Bank of Canada will raise its long-standing overnight rate. &ldq...

_








Member of BC Press Council


22771