Starbucks Corporation (SBUX), Walgreen Company (WAG) – Coinstar: Not Just Coins

The Motley Fool is on the road in Seattle! Recently we visited Coinstar, Inc. (NASDAQ:CSTR) — now officially renamed Outerwall Inc (NASDAQ:OUTR) — to speak with CFO-turned-CEO Scott Di Valerio about the 22-year-old company’s well-known coin-cashing machines, as well as its more recent acquisition of Redbox, and future initiatives to expand into other aspects of the automated retail market.

We’re all familiar with Coinstar and Redbox. In this video segment Scott reveals other Coinstar projects including Rubi machines — which will dispense Seattle’s Best coffee — and several other initiatives being tested in the food, beauty, and entertainment markets. The full version of the interview can be watched here.

A full transcript follows the video.

Austin Smith: It sounds like a lot of new products. I believe Rubi is, what, a partnership with Starbucks Corporation (NASDAQ:SBUX) as well, right? Seattle’s Best is a Starbucks Corporation (NASDAQ:SBUX) label?

Scott Di Valerio: Seattle’s Best is a Starbucks Corporation (NASDAQ:SBUX) label. We have an agreement with Seattle’s Best in certain channels, to provide beans as well as to brand the machines. We certainly are a very good partner with them, but Rubi is 100% owned by Coinstar; we’ve generated business. It’s a partnership that we have with them in bean supply, as well as obviously brand across key channels.

Austin: OK, so it looks like we have Rubi, some sort of food-based vending machines, and some photo-based vending machines. If you were to pick a “favorite child,” so to speak, which one do you think has the most growth? Which one are you the most excited about, going out a few years?

Di Valerio: Certainly our Rubi machines. The other businesses are relatively early-stage businesses.

It’s always hard to say, “OK, which one’s going to hit?” Again, Crisp Market is performing well in the couple of stores that they’re in today, the couple offices that they’re in today. Star Studio is in around 60-70 mall locations and doing quite well, so we think that could be a nice business there.