Broad Street Licensing Group Food News

Starbucks Gets Juiced

Both juice and advanced shelf life processing converged in Starbucks’ acquisition of juice maker Evolution Fresh.

The $30MM sale price gives the coffee giant entrée both to the $50bn Health & Wellness category, as well as High Pressure Pasteurization (HPP),[1] a process that subjects foods to upwards of 50,000 pounds per square inch (340 MPa) to kill or “inactivate” germs, mold and yeast.

The process extends shelf life weeks instead of days.

The move signals Starbucks’ intention of taking on Jamba Juice, which already dominates the “better for you” category with its lines of smoothies, juices, snacks and licensed retail products. CEO Howard Schultz claims the Seattle megabrand can use its reach across foodservice and retail channels to encourage Americans to eat healthy (and help the company make money). Super-premium juice is already a $1.6bn sub-category, and Starbucks is counting on HPP to differentiate Evolution Fresh from pasteurized competitors. That’s because pasteurization uses high heat to kill pathogens, yet can degrade taste and texture, especially when compared to never-heated products. HPP works particularly well on acidic foods like fruits, and can even elevate levels of sweetness.

Starbucks already has achieved significant retail success with its VIA and Keurig Single Cup (K-cup) offerings, which together are worth up to $1bn.[2] However, the company is playing catch-up, not only to Jamba Juice, but Green Mountain Coffee Roasters, who pioneered the K-Cup, and who has doubled its annual sales to $2.7bn in the fiscal year ending September 2011. Starbucks entered the “better for you” category with its Bistro Boxmeals.

[1] Also known by the terms pascalization and bridgmanization.

[2] VIA has gone from a standing start to $250MM annually in less than 2 years.

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