retail news in context, analysis with attitude

Starbucks announced yesterday that it is selling its Evolution Fresh business to Bolthouse Farms.  Terms of the deal were not disclosed.

The announcement said that "Evolution Fresh is a leading producer of primarily organic, cold-pressed, premium juice products. By joining forces with Bolthouse Farms - the No. 1 super premium refrigerated beverage brand and largest carrot supplier to North American retailers1 - Evolution Fresh will have the opportunity to accelerate its growth trajectory while Starbucks focuses its efforts on the growth of the core Starbucks business and its partner and customer experience."

The Wall Street Journal writes that "or Starbucks, the deal comes as (CEO Howard) Schultz directs more investment toward the coffee giant’s cafes and baristas. Mr. Schultz, the longtime Starbucks leader who returned in April for his third stint leading the chain, said the company needs to better handle increased demand, improve the cafe experience for customers and baristas, and increase communication between workers and executives."

KC's View:

If I remember correctly, Evolution Fresh was originally acquired by Starbucks during Schultz's second go-round as CEO as he sought to diversify the brand's portfolio.  They opened a few Evolution Fresh bars, but closed them down when Schultz stepped down and Kevin Johnson took over as CEO.

I'm not being critical here - it is important for companies to look for ways in which to expand their footprints and build more diversified business models.  Just because it didn't work isn't necessarily a reason not to have done something.

But … it also is important to remember that a number of Starbucks' current problems seem to be related to management not being connected to shifts in customer purchase behavior, which left stores unable to meet these changes effectively - like more than three quarters of its beverage sales being for chilled, not hot, drinks.  

Which makes me ask this question:  Did someone build a moat around Starbucks' Seattle headquarters when I wasn't looking?