Is Starbucks Becoming a Bigger Beverage Brand?

Starbucks Corporation (NASDAQ:SBUX) announced on Thursday the coffee company will enter the juice market after purchasing the company Evolution Fresh for $30 million in cash.

The acquisition will help Starbucks move into the $1.6 billion juice market with its ultimate goal of entering the $50 billion Health and Wellness sector. The company has held these ambitions for quite some time and Starbuck’s CEO Howard Schultz said of the company’s plans,”We think we can build a major business.”

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In a press release by the company announcing the acquisition, it said,

With Evolution Fresh, Starbucks will bring a unique, premium juice product to the marketplace through the creation of a differentiated brand and experience, similar to what Starbucks pioneered 40 years ago for coffee consumers. Leveraging Starbucks unique business model retail footprint, CPG grocery distribution channels, digital breadth and in-depth customer engagement the company believes it will be able to take a currently undifferentiated, commoditized product segment and introduce a unique, high-quality product to redefine and grow the super-premium juice market.

Starbucks (NASDAQ:SBUX) plans to open the new juice bars next year on the West coast that will include the Evolution Fresh brand and health foods. Safeway (NYSE:SWY), Costco (NASDAQ:COST) and Whole Foods (NASDAQ:WFM) stores in the west currently carry Evolution Fresh beverages.

The company said it will discontinue selling PepsiCo Inc.’s (NYSE:PEP) Naked brand juices in their shops, replacing them with the Evolution brand.

Starbuck’s news affects Jamba Inc. (NASDAQ:JMBA) which currently has 752 U.S. juice bars. Jamba announced a positive third quarter earnings report on Wednesday and said it open 40-50 new U.S. stores and 10-15 new international ones in 2012–just in time to take on its new rival.

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