Acquisition is next step in expanding Starbucks® strong food platform
with innovative new products, giving customers more reasons to frequent
our stores and enjoy their Starbucks Experience
SEATTLE--(BUSINESS WIRE)--Jun. 4, 2012--
Responding to customer demand for more wholesome and delicious food
options, Starbucks Coffee Company (NASDAQ:SBUX) today announced that it
has entered into a definitive agreement to acquire San Francisco-based
Bay Bread, LLC and its La Boulange® bakery brand, as well as to hire
renowned French baker Pascal Rigo. This acquisition and Pascal’s
visionary leadership will bring the artistry of the French bakery to the
marketplace in a similar way that Starbucks brought the romance of the
Italian espresso bar to many North American coffee consumers for the
first time.
La Boulange® bakery and Pascal are known for skillfully crafting
authentic French pastries and breads from scratch using high-quality,
fresh ingredients. With this acquisition, Starbucks plans to introduce
many of Pascal’s secret and storied recipes into its U.S.
company-operated stores under the La Boulange® brand, while also
accelerating the expansion of the company’s retail footprint over time
in key U.S. cities to further build a differentiated brand and customer
experience unique to the premium retail bakery café category.
“This is an investment in our core business. After more than 40 years,
we will be able to say that we are bakers too,” said Howard Schultz,
Starbucks chairman, president and ceo. “In La Boulange® bakery and
Pascal, we’ve found a company and a culinary artist who share our
passion for creating premium products, reinventing and elevating an
entire product category, and delivering the best customer experience.
We looked at opportunities comprehensively when making this acquisition
and we believe La Boulange® is truly unique in terms of visionary
leadership, product taste and quality, brand authenticity, bakery
capabilities, and potential for growth.”
Starbucks food portfolio is an important part of the company’s core
business that represents a significant opportunity for continued growth
in multiple channels. In recent years, Starbucks has made major
enhancements to its food offerings based on customer feedback, including
removing artificial ingredients wherever possible and diversifying its
portfolio to include smaller portion sizes. Food now accounts for $1.5
billion in revenues in U.S. company-operated stores and has grown by
double digits in each of the last two fiscal years. The acquisition of
La Boulange® bakery is Starbucks next step in its journey bringing
authentic and delicious food to customers, delivering additional reasons
to enjoy their experience during multiple day-parts and at
differentiated retail locations.
“The acquisition of La Boulange® bakery will help us to expand
day-parts, drive customer loyalty and ultimately grow the overall
business through differentiated brand experiences and multiple
channels,” said Cliff Burrows, president, Starbucks Americas, who will
oversee the integration and expansion of La Boulange®. “We will leverage
our scale and premium product expertise to transform a core part of our
business while building La Boulange® bakery into a national artisanal
bakery brand. And we will do it with an unwavering commitment to
maintaining the uniqueness, quality and level of care that Pascal is
known for baking into each of his croissants, pastries, loafs, cookies
and breads.”
Pascal has lived the traditional art of French baking since he was seven
years old when he began work at his village bakery in Paillet, France.
Over the past 40 years he has honed his craft: first by working for
several prestigious bakers near Bordeaux and in Paris and later by
moving to the U.S. where he has owned and operated several of his own
bakeries and restaurants. Pascal opened the first La Boulange® store
location in San Francisco in 1999, living with his family above the
original café on Pine Street for nine years. Today, breads and pastries
are still baked fresh at the location every morning.
“La Boulange® believes in whole foods made from the freshest
ingredients, including specialty grain, European-style butter and
locally sourced produce,” said Pascal, who will be named senior vice
president and general manager of La Boulange® bakery at Starbucks upon
closing of the acquisition. “We weigh, mix, divide, roll, cut, bake and
care about every croissant, cookie, pastry, loaf and bread that goes in
our pasty case and we are looking forward to sharing our passion with
Starbucks loyal and discerning customers. We are proud to join the
Starbucks organization.”
Over time, Starbucks plans to make La Boulange™ products available in
Starbucks® company-operated retail stores in the U.S. In order to
achieve this, Starbucks will look to make investments to broaden
distribution capacity in select markets, while working closely with
outside suppliers to create various La Boulange™ products for Starbucks
stores nationwide. The company will continue to serve Bay Bread, LLC’s
wholesale bakery customers and will evaluate expanding distribution over
time.
Bay Bread, LLC and La Boulange® bakery are being acquired from
management and an investment group, Next World Group. “Next World Group
has worked closely with Pascal over the past six years to grow La
Boulange® into a beloved, local, artisanal bakery that San Franciscans
come back for again and again. Now it’s a successful business ready for
future growth,” said Sébastien Lépinard, founder of Next World Group,
the majority investor in La Boulange®. “La Boulange® bakery and
Starbucks share similar values and a common vision for bringing premium
products to customers in a socially responsible way. We trust that
Starbucks is the best partner to take La Boulange® to the next level
while staying true to the brand and bringing the romance of an authentic
French bakery to life.”
Starbucks entered into an agreement to acquire Bay Bread, LLC and the La
Boulange® bakery brand for $100 million in cash and expects the
acquisition to dilute earnings by approximately $0.02 per share in the
second half of fiscal 2012, compared to the previously announced
earnings targets. Bay Bread, LLC and the La Boulange® bakery brand will
be a wholly-owned subsidiary of Starbucks Corporation.
La Boulange® bakery operates 19 retail locations in the Bay Area and
sells its products in several upscale restaurants, hotels, and specialty
grocery stores in the region.
Webcast Information
Howard Schultz, Starbucks chairman, president and ceo, Cliff Burrows,
Starbucks president, U.S. and Americas, and Troy Alstead, Starbucks
chief financial officer and chief administrative officer will host a
webcast today at 1:30 p.m. PDT to discuss this exciting strategic
acquisition and its significance to Starbucks growing business. A
simultaneous webcast will be available and subsequently archived at
Starbucks Newsroom at http://news.starbucks.com.
About Starbucks Corporation
Since 1971, Starbucks Coffee Company has been committed to ethically
sourcing and roasting the highest-quality arabica coffee in the
world. Today, with stores around the globe, the company is the premier
roaster and retailer of specialty coffee in the world. Through our
unwavering commitment to excellence and our guiding principles, we bring
the unique Starbucks Experience to life for every customer
through every cup. To share in the experience, please visit us in our
stores or online at www.starbucks.com.
Starbucks Corporation Forward-Looking Statements
Certain statements contained herein are “forward-looking statements”
relating to the acquisition of Bay Bread, LLC and its La Boulange®
bakery brand, the hiring of Pascal Rigo, Starbucks plans and
expectations with respect to the acquisition, and the acquisition’s
effects on Starbucks fiscal 2012 financial targets. Generally, these
statements can be identified by the use of words such as “anticipate,”
“believe,” “could,” “estimate,” “expect,” “feel,” “forecast,” “intend,”
“may,” “plan,” “potential,” “project,” “should,” “will,” “would,” and
similar expressions intended to identify forward-looking statements,
although not all forward-looking statements contain these identifying
words. These statements are based on information available to Starbucks
as of the date hereof, and Starbucks actual results or performance could
differ materially from those stated or implied, due to risks and
uncertainties associated with its business. These risks and
uncertainties include: successful closing of the acquisition, evolving
consumer preference for artisan, high-quality baked goods, acceptance of
Starbucks of such products, the ability of Starbucks to accelerate its
growth in multiple channels and food offerings, including baked goods,
the potential introduction of artisan, high quality by new market
entrants, the long term success of Starbucks strategy to innovate with
new products, enter new categories and expand into new channels of
distribution, and other risks detailed in Starbucks filings with the
Securities and Exchange Commission, including the “Risk Factors” section
of Starbucks Annual Report on Form 10-K for the fiscal year ended
October 2, 2011 . Forward-looking statements reflect management’s
analysis as of the date of this release. Starbucks does not undertake to
revise these statements to reflect subsequent developments, except as
required under the federal securities laws.
Source: Starbucks Coffee Company
Starbucks Coffee Company
Media Contact:
Lisa Passé,
+1-206-318-7100
press@starbucks.com
or
Starbucks
Coffee Company
Investor Relations Contact:
JoAnn DeGrande,
+1-206-318-7118
investorrelations@starbucks.com