Today, while looking at a few cold hard numbers, I’m also taking a more contemplative look at what some major companies are doing to drive growth. More specifically, I’m looking at how Starbucks Corporation (NASDAQ:SBUX), PepsiCo, Inc. (NYSE:PEP), The Coca-Cola Company (NYSE:KO), and even the Campbell Soup Company (NYSE:CPB) are juicing for growth.
Starbucks Corporation (NASDAQ:SBUX) acquired the Evolution Fresh juice brand in 2011. The Company is seeking growth via juice outlets that focus on healthy beverage drinks. As Julie Jargon reported in a Wall Street Journal article (November 11, 2011), ” The coffee chain is buying a small, upscale juice maker Evolution Fresh Inc. for $30 million—a deal that pushes Starbucks Corporation (NASDAQ:SBUX) well beyond its coffee roots and shows how serious the company is about transforming itself into a consumer products player with a large presence outside its own stores.”
Why is this important to potential Starbuck’s investors? Aside from being a new revenue stream, this acquisition highlights Starbucks Corporation (NASDAQ:SBUX) commitment to tailoring their growth to trends. Health foods and drinks are more “in” than ever. Companies such as Starbucks Corporation (NASDAQ:SBUX) must drive growth through offering “on trend” products in addition to their core products. While there’s still room for innovation and growth in the coffee and tea category, there’s probably greater room in the health drinks category.
Consider that Starbucks Corporation (NASDAQ:SBUX) reported in January 2013 their financial results for their fiscal first quarter (ended December 30, 2012) and their focus going forward. They believe they will have sustainable profitable growth due to two major factors. These are the quality and diversity of their growth drivers in tandem with their ongoing concentration on operational excellence. Evolution Fresh is one of those quality and diverse growth drivers.
The Company started out small with their Evolution Fresh initiatives. However, by the end of 2013, their goal is to have this line of bottled cold-pressed juices in roughly 8,000 locations. Starbuck will open a juice processing facility this year in Southern California. Investors should note that this will quadruple their production and distribution capacity.
Investors should also note that Starbucks Corporation (NASDAQ:SBUX) has a history of successful initiatives (their ready-to-serve coffee powder (instant coffee) although they refrain from using that term, elaborate in-store coffee concoctions, and Verismo® machines).
Consider that for 1Q 2013 their Total Net Revenues grew by 11% to $3.8 billion, which is a record for the Company. Their global comparable store sales increased by 6%. The Company has a history of growing sales and no doubt has plans to market their healthy juice offerings aggressively.
