What do you do when you've saturated virtually every neighborhood corner with a stand-alone coffee shop? Brew up as many partners as possible to reach the average Joe.
Starbucks (SBUX) announced Wednesday it's re-branding its mellower Seattle's Best coffee, which it acquired in 2003, and has struck a deal with AMC Entertainment to distribute the java in 300 theaters beginning in July.
This deal marks the latest effort in Starbuck's caffeine-fueled drive to grow its business and get its Seattle's Best brew into more than 30,000 distribution points by the end of its fiscal year -- from approximately 3,000 at the start of this year.
"We are determined to turn the traditional coffee model on its head with innovative new approaches in every phase of our business -- partnerships, retail, and packaged goods -- and to take our premium coffee to the places our customers go in their everyday lives," Michelle Gass, Seattle's Best Coffee president, said in a statement.
In February, Starbucks struck a deal with Burger King (BKC) to be the java provider at all of its locations by September, in a move to grab some of the breakfast business out of the mouths of competitors like McDonalds (MCD). And in late 2008, Starbucks announced a deal with Subway to roll out its Seattle's Best coffee in 9,000 sandwich shops.
These partnerships expand Seattle Best's reach beyond the already-established relationships with Alaska Airlines (ALK), Borders bookstores (BGP), Royal Caribbean Cruise Lines (RCL), college campuses, restaurants and grocery stores.
Starbucks, despite its saturation of stores, carries a flavor with a powerful punch that does not necessarily translate into a taste for the masses -- hence, its acquisition of local rival Seattle's Best, in a $72 million stock and cash deal.
Seattle's Best, with its self-described "approachable" appeal, has also served as Starbucks' java jolt into the breakfast business, as it increasingly sees an encroachment by McDonald's and other players who are offering their own specialty drinks.
Since its acquisition, Seattle's Best had maintained its own artful brand, but Starbucks is now retooling it with a far more simplified logo that carries a look that will likely appeal to the Target (TGT) shopper, aka the everyday guy and gal.
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