With thousands of locations in the U.S., there is no question that Starbucks is all "stored up" here, so where does the company turn for domestic growth? To other companies' stores, of course.
The coffee giant, which is currently wrangling with Kraft Foods to take over distribution of its whole bean and ground coffee in food stores, sees an opportunity for growth by bringing Starbucks and other brands such as Seattle's Best and Tazo Tea to consumers in other outlets. The company made clear its intentions at a recent analyst conference.
"There's no question inorganic growth will be a bigger part of our next 10 years than it has been of our previous 10 years," Troy Alstead said during the event.
Acquisitions could include brands "close to what we're about" and others seen as being complementary to coffee, Mr. Alstead said.
A report by Stifel, Nicolaus & Co. suggested Peet's as a possible takeover target. "When Starbucks and Kraft part ways, Peet's could be a nice fit to deliver Starbucks into the distribution business," the Toronto Star quoted the report.
The two companies have a shared history, with several of the original Starbucks stores having been sold to the chain's founders by Peet's. The company also sold coffee to Starbucks when it first opened.
Another possible acquisition, suggested in The Seattle Times report, was Dean Foods. The company is the largest distributor of milk, creamer and cultured dairy products in the U.S. The company's stock has not been performing well and is near its 52-week low.
"The big theme was that this company is in transition, becoming a global consumer-products company that was a specialty retailer," Jack Russo, an analyst for Edward Jones, told the Seattle paper.
Discussion Questions: Is Starbucks on the right track by looking to grow through CPG brand acquisitions? Do you see Starbucks becoming more like a CPG company, by nature?
Is Starbucks on the right track by looking to grow through CPG brand acquisitions?