Starbucks to Offer More Things We Don't Need to Spend Money On

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Starbucks buys Evolution Fresh, moves into Health and WellnessStarbucks (SBUX) has long been a master at getting people to overpay for something they could consume much more cheaply at home. Now -- confronted by a host of coffee rivals, led by Dunkin' Brands (DNKN) -- Starbucks hopes to pull off that neat profitable trick once more, this time with juice.

On Thursday, the world's largest coffeehouse chain announced its acquisition of Evolution Fresh, a small, high-end maker of juices and cut fruit and vegetables. In a press release, Starbucks proclaimed its intention to "reinvent the $1.6 billion super-premium juice segment, its significant next step in entering the larger $50 billion Health and Wellness sector."

But can Starbucks credibly claim to offer a beneficial addition to our nutritional regimens? This is a place, after all, that sells a 680-calorie Peppermint White Chocolate Mocha ("venti" size, made with whole milk plus whipped cream).

"Starbucks' idea of nutrition is nutrients in products, not real foods," says Marion Nestle, professor of nutrition, food studies and public health at New York University, and author of Food Politics and What to Eat, among other publications. "Starbucks would be a doing a lot more for the health of its customers if it reduced the sizes of its food offerings, and increased the proportion of real foods," says Dr. Nestl In other words: oranges instead of orange juice.

But you can only charge so much for a piece of fruit; the markup on a smoothie or blended juice drink can be many times higher.

Evolution Fresh does at least make a claim to singularity, boasting of new technology called High Pressure Pasteurization, which purportedly eliminates potentially harmful microbes without subjecting the juice to high temperatures that can degrade flavor or nutritional content. The result is a fresh product with a very long shelf-life -- 40 days, reportedly.

"I'm sure the juice is just fine nutritionally," Dr. Nestle said. "This is just part of Starbucks' plan to be seen as health foodish as well as caffeinated."

Starbucks CEO Howard Schultz said as much in an interview with CNBC. Schultz mentioned the respective sizes of "the health and wellness category in America" and "the premium juice business" and said that no "national specialty retailer of any kind" has matched what Starbucks thinks it can do with juice" (seeming to diss Jamba Juice). But aside from touting the taste and shelf-life of Evolution's products, which carry labels like "Daily Detox" and promise "vitality," Schultz said nothing about any actual health benefits.

Instead, discussing plans to open separate specialty stores after introducing Evolution drinks in Starbucks locations, Schultz said the company will "capture the romance and theater of juice beverages." But he did not elaborate on what might constitute that romance and theater, the atmospheric details that are presumably why consumers will be expected to pay a premium. In any case, Schultz sounded confident about Starbucks' ability to pull it off. After all, he'd done it once before, as he reminded the interviewer: "If you think back 30, 40 years ago we reinvented a commodity, which was generic coffee, and built a major business around the experience. We think we can do the same thing with juice."

The products at Starbucks' juice-based specialty shops could well wind up delicious enough to make a claim on our wallets. But as a strategy, the "major push into health and wellness" announced by Howard Schultz amounts to a bet that consumers will happily pay hand over fist for a feeling of health and a taste of wellness, preferring these pleasures to the hard, unglamorous work of exercising regularly and eating right.



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doo doo

Only if you are too lazy to make it at home . . . I make several iced caps and iced teas at home for pennies a cup. And I like them better. When one cup of coffee costs nearly as much as a whole POUND of grounds . . . and I obviously use washable cups and thermoses. I do this not so much to help the planet but because mine tastes better. I've had the joy of over 30 years of experiment to get my coffee BETTER than Starbucks.

November 17 2011 at 9:57 AM Report abuse rate up rate down Reply
finn

Everyone wants Starbucks to charge Walmart prices but continue to provide Starbucks quality and employment opportunities. Guess what, it ain't happening. Yes, I buy food at Starbucks, you know why? because I'm a vegetarian and Starbucks offers me more healthy choices than any of the fast food restaurants that can also brew me a decent cup of coffee. I think its ridiculous that this article would even call out Starbucks for what they sell given they sell better stuff than almost anyone else (except maybe the grocery store). No, I don't work for Starbucks and the closest one is 45 minutes from my house. But when I travel, it's my stop of choice, always clean, always great service, and always healthy choices.

November 17 2011 at 9:13 AM Report abuse rate up rate down Reply
JBenChicago

While I think Starbucks is a great company model for employees, it's just gotten too expensive for me. I'm in Chicago, and a Grande Latte, (I know, kind of fancy-pants), is over $4 now. And I don't even think of buying any of the food. In a typical workday, pre-recession, I'd swing in at least once a day for a coffee. But now, even $20 a week seems like a lot for coffee I can brew at home for $5 or less. Maybe sometime in the future I'll be able to indulge again. I do hope they stick around though, they employee a lot of good people!

November 16 2011 at 6:22 PM Report abuse rate up rate down Reply
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November 16 2011 at 1:04 AM Report abuse rate up rate down Reply
breakin100

to gstev75035...AMEN to that. Don't like it? Don't like nutritional value? Don't like sizes offered? DON'T BUY IT but don't tell others what to do

November 15 2011 at 9:43 AM Report abuse rate up rate down Reply
babygboo4

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November 14 2011 at 3:25 PM Report abuse rate up rate down Reply
trudiqsb

Starbucks will not offer a senior price on their coffee per cup!!! So, I go directly accross the street to McDonalds --- for 79cents (senior price) coffee and all the refills you want!!! Where would you spends your money??? How disgusting to not offer a senior price --- everyone else does. With the profit in hot water -- be nice.

November 14 2011 at 2:33 PM Report abuse rate up rate down Reply
1 reply to trudiqsb's comment
midsr4kids

and the cool thing is starbucks is a new progressive company..the kind your overlord obama likes...and just like him seniors are a disposable commidity, after he restributes all your ill earned wealth.

November 14 2011 at 5:59 PM Report abuse rate up rate down Reply
Gumby

I add cinnammon and nutmeg in the coffee grounds before dripping it with hot water.. It tastes so spicy and nice! Starbucks can copy my idea, free of charge!

November 14 2011 at 12:31 PM Report abuse rate up rate down Reply
l07hye

Our coffee pot brews (3) pots of coffee a day. When we go to work, we fill thermos jugs, and take powered creamer to add later, if we desire it. Starbucks is for people that can't think outside the box. or just has a lot of money to throw in the trash. I say to each their own. People just need to mind their own business and stay out of others.

November 14 2011 at 11:43 AM Report abuse rate up rate down Reply
gstev75035

It is so vogue to bash Starbucks...a company that employes thousands of people across the globe....gives benefits to their part timers and works with kids school schedules like few other companies will. They also get behind many causes for the environment and social activities. If you do not like their coffee....fine...don't buy it. Some people don't like the taste of beer...you don't drink it. Some don't like spicy food.....don't eat it. We have different tastes. I can only guess that people who bash Starbucks are suffering from some sort of economic jealousy.

November 14 2011 at 9:55 AM Report abuse -1 rate up rate down Reply
1 reply to gstev75035's comment
BABIN

Yes, Starbucks employes thousand people all around but in here pay for that job not living wages and charge for the product ''rich'' wages...and because of many young people working for that company and for any other who pay low wages parents and relatives for that particular employers pay living bills in other way give parents hard time from own job where try to make more money just to help own younger peoples and like this game goes so long and nobody from that anymore can make normal living...youngers work service jobs for low wages, parents work for higher wages but in end of month not either one can survive normal and without using C.C. stuff and go more in the debt...I mean this system just works only for 1% and regular peoples is just so bling...I always say don't change elected people, change how system works and put that in the law and let's see after that will people who work hard still make low paying wages...AMEN.....

November 14 2011 at 3:19 PM Report abuse rate up rate down Reply