Starbucks expands its CPG footprint

The dust-up between Starbucks and Kraft last week triggered a RetailWire discussion about the coffee giant’s planned expansion into related consumer goods. Here’s my opinion:

Starbucks has done a good job balancing its focus on better-operating stores with expansion opportunities outside its core business, and its shareholders have been rewarded in the past year. (The growth of Seattle’s Best to other fast-food outlets and the strong sales of Via instant coffee are two good examples.) The challenge for Starbucks, as it considers a broader portfolio of CPG brands, is twofold: First, is there synergy between the new brands and the core beverage business? Second, can Starbucks manage new businesses effectively at the same time that it tries to re-engineer its coffee shops to drive more productivity and comp sales? It should be an interesting process to watch over the next few years.

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