Starbucks: Is The World Running Out Of Coffee?

Retail

Published: September 7, 2007 4:54 pm

The chairman of Starbucks (SBUX) says that there will be a shortage of the beans for very high end coffee.

Fear not. SBUX has already locked up supply due to it huge network of buyers. As for the competition, "At the very top of the market where Starbucks plays, I do not believe that others will have access to the quality of coffee that we are buying because we have secured those sources," Howard Shultz told Reuters.

Odd comment. Does it mean that McDonald’s (MCD) and Dunkin Donuts will find that the best beans are scarce. Maybe they won’t be able to make money on gourmet coffee.

Schultz did say "If anyone believes that Starbucks is going to allow another company to take our leadership position away they are mistaken." Perhaps supply will be his advantage.

SBUX needs something. Its stock is down 22% this year.

Douglas A. McIntyre

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