If you aren't getting your daily dose of caffeine, things are
about to change. Starbucks Corporation (
), the ubiquitous coffee store chain, thinks there is still
plenty of opportunity left to grow in the U.S. The company which
currently has more than 11,000 stores in the country will add
another 1,500 by the end of 2015. Overall, it will add 3,000 new
stores in the Americas region in the next five years.
Coffee And More
Not all of the new stores are expected to be traditional
Starbucks coffee stores, and we could see a fair number of Teavana
and Evolution juice bars as part of the new additions. At the
time of the
acquisition of Teavana
, management announced its plans to do to tea what they have done
to coffee, so this certainly looks like one of the brands that the
company is betting heavily on. Starbucks hasn't given out
details on the break-up, so it remains to be seen the proportion of
Evolution and Teavana stores that will open up.
Starbucks will also be looking to boost the sales of its
existing stores through La Boulange bakery offerings and Evolution
bottled juices. La Boulange is a San Francisco-based bakery
chain that Starbucks acquired for $100 million earlier in the year
while Evolution is a juice company purchased for $30 million in
November last year.
Beyond the Americas, China will be one of growth areas as the
company looks to increase its store count to 1,500 by the end of
2015. China will also surpass Canada as the second most important
market for the company in the next two years. Starbucks' global
store count will shoot up to more than 20,000 in the next two years
from 18,000 currently.
See full analysis for Starbucks Corporation
And as we talked about in our previous
, Starbucks' channel development segment represents a tremendous
growth opportunity. Revenues for the channel development business
were $1.3 billion in fiscal 2012, and management expects the
division to double its international footprint by 2015. The
company already has more than 100,000 distribution points across 20
countries. Starbucks will be banking on single cup servings such as
the VIA, K-cups and the recently launched Verismo brewer to fuel
sales growth of this segment.
We have a $58 price estimate for Starbucks, which is about 15%
higher than the current market price.
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