size of a typical coffee shop. In a deal with Coinstar, Seattle's Best
vending machines will appear nationally, and its expansion into
the office coffee segment is part of a strategy "to go places where
it has traditionally been hard to find great coffee." Seattle's Best
will soon be a $1 billion brand without significantly eroding the
mermaid's dominance in specialty coffee.
This hints at the growth plans for tea.
LOGISTICS LOGIC
Tazo Tea Stores and Teavana will share production and
sourcing efficiencies and benefit from a well-tuned national
distribution and logistics network. Tazo dumped its dated
logo and color palette for an elegant Rococo motif. Its beloved
blends such as Awake and Calm remain in the coffee shop
lineup. Expect to see Tazo's neat new loose-leaf tins to appear
at Starbucks locations beside its teabags and Tazo branded
lattes—but customers will have to go elsewhere to get the
really good stuff.
"Coupled with the romance and theater of the retail
experience that is the heart and soul of Starbucks heritage,
[Teavana] will create a differentiated customer experience
and business opportunity that delivers immediate value to
shareholders," Schultz says.
Spending more than $2 million per store raised the
eyebrows of financial analysts and investors when the sale was
announced, but Teavana's modest storefronts average much
Starbucks spent $620 million to acquire Teavana, hoping
to get a boost from tea's healthier image and higher
profit margins.
higher margins than a Starbucks coffee shop, with far less
complexity and expense. The best selling category (55 percent
of revenue) is dry sacks of tea weighed and delivered. Gross
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