Starbucks Isn’t Bad At Acquiring Businesses: It Just Doesn’t Want Them

Starbucks went on something of a buying binge five or six years ago, buying a healthy-lunch chain, an unhealthy-pastries chain, and a loose tea retailer. Since then, the coffee chain has shuttered all of these businesses, which it paid hundreds of millions of dollars for. Is Starbucks just really bad at picking companies to acquire?

Nope, says Jonathan Maze over at Nation’s Restaurant News. Starbucks didn’t throw away the $620 million that it spent acquring Teavana, or the $100 million that it paid for the bakery chain La Boulange.

That’s because Starbucks wasn’t out to acquire a bakery chain or hundreds of stores that sell tea in malls. It wanted these companies’ products, and their established brands to a lesser extent.

Last week, when the chain reported its earnings and broke the news about Teavana, CEO Kevin Johnson also shared that its tea sales are up 40% across the whole chain, and that they’re up 60% in China.

The company’s goal with Evolution Fresh and La Boulange wasn’t to run those companies’ restaurants, but to bring in the companies’ products and their employees’ expertise. Along the way, Starbucks has increased its business among people who actually want to eat lunch.

Running a small bakery chain isn’t efficient, and running a retail tea business during an ongoing retail apocalypse isn’t a good idea. A few hundred Teavana stores have closed, but tens of thousands of Starbucks stores are pushing fruit-infused iced teas based on the company’s products, and selling their teas. Teavana-branded products will be sold in grocery stores across the country.

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