The news that Starbucks is getting into the juice business comes as no surprise.
The fact that they offer so many products in their stores including food and cold drinks (lemonade and other juices), has long indicated that they want the brand to mean more to us than just coffee.
They dropped $30 million on a small juice company called Evolution Fresh Inc., which has a large presence on the West Coast. The Evolution beverages will replace the Naked Inc. beverages sold in Starbucks stores, as well as go into supermarkets with evolution.
Whether they rebrand these juices or not, one element of their strategy is to use their presence in the Starbucks stores to generate awareness. The WSJ quotes Starbucks CEO Howard Schultz as saying that getting these juices in front of the 60 million people who frequent Starbucks each week is "equivalent to airing a commercial on the top three television shows weekly." Maybe, maybe not.
Additionally, the company has announced plans to open a new chain centered on wholesome beverages and food that will tap into the $1.6 billion juice market and the $50 billion health foods market.
No matter what the stores are called, "Starbucks has the clout, marketing savvy and name recognition to make its juice and health foods a premium brand and take market share from competitors," or so the LA Times quotes one expert enthusing.
But will they use the brand equity of Starbucks?
It's a tough call, but I would imagine they will in some form or another, partly because it seems obvious that the juice stores will offer coffee and other goodies, and people already see Starbucks as a spot where they can get a myriad of products.
Apple Computer changed its name to Apple, Inc. as it broadened its product line with iPods, iPhones, and iPads. This was a great move despite initial skepticism in the industry that the company would struggle to sell in these new product categories.
Juice has long been an open gambit for Starbucks anyway, and as Seattlepi says, $30 million is "chump change" to the coffee giant.
If Starbucks goes into this venture wholeheartedly, they could transform the juice business the way they transformed coffee.
Remember when people thought expensive coffee wouldn't work?
Technorati Tags: Coffee, Starbucks, Juice, Branding, Naming, Marketing