Starbucks CEO Howard Schultz was one of Jamba Juice’s first, biggest investors.Now he’s competing against them.
Today Starbucks announced that it purchased the premium juice label Evolution Fresh for $30 million, and that it’ll start rolling out juice bars in 2012.
It’s is part of a huge re-branding campaign. Starbucks recently dropped “coffee” from its mermaid logo and said the juice bars would be part of a much larger health and wellness chain (via Reuters).
Starbucks has a strong, high-quality brand, which will help it break into the $1.6-billion premium juice market (and the $50 billion health and wellness industry).
The challenge is to avoid the troubles that nearly sunk the company just a few years ago: over-expansion and -corporatization. Starbucks is smart to begin by launching the juice bars on the West Coast before rolling out further.
It will be interesting to see if Jamba Juice — where Schultz also served on its board of directors — changes its strategy to compete.
Here’s part of the Schultz/Jamba Juice backstory, according to Funding Universe:
[Venture capitalist Bob] Kagle enlisted Starbucks’ chairman and CEO, Howard Schultz, to participate in an initial $3 million round of funding for Juice Club. After meeting with [founder Kirk] Perron and finding that they shared similar values, Schultz subsequently agreed to join the board. Perron also turned to Starbucks’ real estate brokers to co-locate some outlets with Starbucks, since the two franchises were not in direct competition. With Schultz’s blessing, Juice Club was able to raise a further $19 million from seven venture groups, one of which was Microsoft cofounder Paul Allen’s Global Retail Partners. A wider group of investors would ultimately invest an additional $44 million in the business.
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