Will the diversification of Starbucks (NASDAQ: SBUX) ever end? It has entered the instant coffee arena with its Via brand. It sells fruit smoothies. It has begun to open its own Evolution Fresh juice bars. Starbucks has even decided to serve alcohol in some locations.
The coffee store chain has decide to chase Red Bull and all of the “five hour energy drink” companies with its own product. Starbucks’ will be called “Refreshers”. The drinks will have 60-calorie drinks, will come in fruit flavors and will be hyper-caffeinated by extract of green, unroasted coffee. “Refreshers” drinkers can feel out of control as they do after a dose of drug-store sold energy beverages, marketed to people who have to many college exams or cannot get enough sleep.
Starbucks has begun to break the old “stick to the knitting” rule taught at many business schools. For almost any company the time comes when on too many products or locations begin to weigh on management’s ability to effectively operate efficiently. The over-ambition problem happened to Starbucks before, ahead of the recession. Its rapid store expansion program in the early 2000s collapsed and it had to close 600 stores and lay off 12,000 people in 2008.
Douglas A. McIntyre
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