Starbucks Moves Via Into Grocery

The shift mirrors one of the food industry's hottest trends: pushing restaurant brands into supermarkets.

May 03, 2010

SEATTLE - Soon, Starbucks aficionados can pick up Via instant coffee at their supermarket, the Wall Street Journal reports. The coffeehouse chain is rolling out Via to grocery stores, mass merchandisers and other retail locations this spring.

Via??s move from Starbucks stores to supermarkets imitates a food industry trend of restaurant brands, such as P.F. Chang??s China Bistro and California Pizza Kitchen, appearing in grocery aisles.

Over the next year and a half, Starbucks will launch other new products along the same lines as it has done with Via" a highly promoted appearance in Starbucks, then a heavily publicized move into supermarkets.

Having a "very significant consumer packaged goods" business is a "centerpiece" of its growth plan, said Howard Schultz, Starbucks CEO. Currently, grocery items, such as bottled frappuccinos, coffee beans and ice cream, bring in close to 10 percent of the company??s sales.

"It??s an intriguing question how far Starbucks the coffee shop can morph into Starbucks the brand," said Sharon Zackfia, an analyst with William Blair & Co. This plan "bears some risk. And Howard does strike out sometimes. But he also hits home runs," she said.

Target has stocked Via for months, where the instant coffee has shown "incremental growth in the sales of Starbucks and in the total instant coffee category," said Greg Duppler, a senior vice president of merchandising at Target.

Starbucks will distribute Via on its own, which could cause problems if the company cannot keep up with supply and demand.

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