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Starbucks To Open Juice Bars In 2012

Natalie Fung |
November 14, 2011 | 11:43 a.m. PST

Staff Contributer

Starbucks plans to open juice bars in 2012. (Creative Commons/Flickr)
Starbucks plans to open juice bars in 2012. (Creative Commons/Flickr)
Look out, Jamba Juice! Starbucks announced on Thursday it will be opening a chain of juice bars next year, a market that Jamba Inc. has heavily controlled.

To expand beyond just the coffee business, Starbucks also announced that it had purchased juice company Evolution Fresh for $30 million in cash.

“We think we can build a major business,” Starbucks CEO Howard Schultz told reporters on a conference call, Reuters reports.

Schultz said the addition of juice bars is the first of many steps Starbucks has planned to get a move into the health and wellness market.

After Thursday's announcement, market shares in Jamba dropped 0.6 percent, while shares in Starbucks were up 1.1 percent on Thursday afternoon on the NASDAQ

Starbucks' plan may hurt Jamba Inc., especially since the juice company has struggled in past years due to other companies introducing competing products.  Schultz said that Jamba suffered after it shifted to more of a commodity business.

While Evolution Fresh is currently sold in Whole Foods and PCC Natural Markets on the west coast, Starbucks plans to expand the juice company's distribution to other retailers, including its own coffee shops.

The first of Starbucks’ new juice bars will open in early to mid-2012, starting on the west coast. The juice bar’s name has not been revealed, and it is not clear whether or not Starbucks’ famous mermaid logo, which recently dropped the word “coffee” from it’s design, will be featured in the new stores.


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Comments

Joe (not verified) on November 17, 2011 9:13 AM

Not so fast, Starbucks!!
Your decision to enter the Juice Bar business might awaken the sleeping giants. It seems logical now that Pepsico, Coca-Cola or even McDonald’s might make a play for Jamba Juice. The price is right and the potential is enormous. Jamba’s current market cap equates to a current valuation of only 1/2 times sales. Even at a conservative valuation of 2-time sales, Jamba can be taken for $6.50 a share.

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