Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Starbucks Corporation (SBUX)’ Latest Venture Promises Big Growth

Starbucks Corporation (NASDAQ:SBUX)Starbucks Corporation (NASDAQ:SBUX), the world’s most popular coffee chain, is joining forces with Danone SA (ADR) (OTCMKTS:DANOY) to create an exclusive yogurt line called “Evolution Fresh, Inspired by Dannon.” The line of co-branded yogurts will be sold in U.S. Starbucks locations as soon as next year, and will reach grocery store shelves by 2015.

So what?
This partnership is important for a number of reasons. For Starbucks Corporation (NASDAQ:SBUX) it’s another way for the coffee chain to attract more customers throughout the day, in addition to its loyal morning crowds. In 2011, Starbucks scooped up Evolution Fresh, a premium juice brand, for $30 million. This together with the company’s 2012 acquisition of La Boulange Bakery is helping Starbucks Corporation (NASDAQ:SBUX) diversify its brand into the consumer packaged goods space.

Not to mention, the deal opens the door for Starbucks in the multibillion-dollar yogurt industry. Market research firm Packaged Facts says yogurt sales totaled more than $7 billion in the U.S. last year. As a snack, yogurt is a perfect fit for Starbucks, whose brand has come to embody health and wellness. Not only does this help Starbucks Corporation (NASDAQ:SBUX) expand into a new product category, but it should also be a win for the company down the road once its Evolution Fresh beverage and yogurt products are selling in grocery stores.

There are also clear advantages for Danone SA (ADR) (OTCMKTS:DANOY), the French dairy company that’s on the other end of this deal. In fact, it was Franck Riboud, Danone SA (ADR) (OTCMKTS:DANOY)’s chief executive, who first reached out to Starbucks Corporation (NASDAQ:SBUX) CEO Howard Schultz about a possible collaboration with the java giant. While financial terms of the deal were not released, an obvious benefit for Danone is that its products will now be sold at thousands of Starbucks locations across the country.

Starbucks’ massive distribution network should help Danone make a comeback in the U.S., where its products currently compete with deep-pocketed rivals, such as General Mills, Inc. (NYSE:GIS)’ Yoplait. While Danone currently holds the largest share in the overall yogurt market, it ranks behind General Mills, Inc. (NYSE:GIS)’ in the fast-growing Greek yogurt category: Yoplait now has a 24% share of the Greek yogurt market, according to Euromonitor. It’s not surprising, then, that the first Evolution Fresh, Inspired by Dannon product will be a Greek yogurt parfait.

Strategic partnerships such as this should pay off for Starbucks Corporation (NASDAQ:SBUX) down the road as it continues to expand into new markets and product categories. For investors, this could mean more upside in the stock. Shares of Starbucks are up more than 27% on the year, and the stock currently trades at around $66 a share.

The article Starbucks’ Latest Venture Promises Big Growth originally appeared on and is written by Tamara Rutter.

Fool contributor Tamara Rutter owns shares of Starbucks. The Motley Fool recommends Starbucks. The Motley Fool owns shares of Starbucks.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.