The mission at Starbucks Coffee Co., Seattle, has always been to inspire and nurture the human spirit one person, one cup and one neighborhood at a time, and that extends beyond its retail stores and into consumer packaged goods channels, enabling customers to enjoy Starbucks anywhere and in any format.
“We think that it starts and ends with our desire to better serve our customers, and to provide the world’s finest coffee wherever and in whatever form our customers want to enjoy it, in a brand-appropriate way,” says Jeff Hansberry, president of Starbucks channel development and Seattle’s Best Coffee. “For our organization, our vision, our mission, our charge [is] to better serve our customers.”
Hansberry, who joined Starbucks in June 2010, notes that the Starbucks CPG segment had begun to grow before he and his team arrived, but its evolution has accelerated around the realization that the company can better serve its customers, who other companies might refer to as consumers, from its retail stores to local convenience stores and everything in between.
“There are millions of points of distribution that our customers want to be able to access our brand through various points in their day, and the channel development organization is built to better serve our customers wherever and whenever they want our coffee and products,” he says. “That clarity of vision is more recent and that’s really what we’ve been building toward over the last two years.”
Building on strengths
Part of Starbucks’ evolution included implementing a direct model to market, sell and distribute Starbucks and Seattle’s Best Coffee packaged coffees as well as the company’s Tazo tea brand in March 2011. Previously, the company had a distribution partnership with Kraft Foods for its packaged coffee and tea.
“With that direct model, we have built a number of capabilities that allow us to effectively represent our brands to customers across the US,” Hansberry says.
“With that direct model, we have built a number of capabilities that allow us to effectively represent our brands to customers across the US,” Hansberry says. “As we’ve done that, the capabilities that we’ve built are really around customer relationship management, strategy alignment with our key customers [and] business planning, category management and shopper marketing.
“We’re investing heavily in those capabilities for a couple of reasons,” he continues. “One is because that is an expectation of a leading CPG company, but also beyond that we see those capabilities as enablers for what we call our Blueprint for Growth.”
Within the company’s Blueprint for Growth is its portfolio of assets that includes its retail stores, social and digital assets, and loyalty program, coupled with down-the-aisle availability of products in packaged goods channels and finding ways to connect all of those elements to speak to customers in new and different ways, Hansberry says.
“The power of it is really two-fold: [it’s] an ability to speak to our customers in a way that they’re comfortable with, and it’s an ability to speak with our customers in a compelling way that is very efficient and effective,” he adds.
Among those ways to communicate, Hansberry notes that 60 million customers visit Starbucks retail stores every week, where they are surrounded by the sights, sounds and smells of the café as well as interaction with the baristas. With its social and digital outreach, the company has millions of Facebook fans and Twitter followers as well as millions of starbucks.com visitors every week. Starbucks also has millions of Starbucks Cards in circulation, including registered cards and Starbucks Gold Cards, Hansberry says. The company considers these tools of its Blueprint for Growth plan that create capabilities based on shopper marketing and shopper insights, he explains.
The company also is looking for ways to link its assets with its retailers’ assets to create propositions that add value for both brands in a way that’s creative for both parties, Hansberry says. It also wants to leverage shopper marketing that’s linked to the Starbucks brand group and category management group to allow the teams to work with their retailers to translate insights into category and brand growth.
This new approach to channel development also is a part of another new venture for the company. In November, Starbucks Coffee Co. announced its acquisition of Evolution Fresh Inc., a super-premium juice business, which was started by the founder of Naked Juice, Jimmy Rosenburg.
“Juice for us is a very big and exciting opportunity; it’s really our point of entry into the $50 billion health and wellness space,” Hansberry says. “We estimate the [super-premium juice] category at about $1.6 billion in revenue, and it’s growing. We think we have a product in Evolution [Fresh] that is better for you than anything that is out there on the market, and the reason we believe that is we have a juicery in southern California.”
Starbucks will begin to build the Evolution Fresh brand through its current and additional CPG distribution channels, Starbucks retail stores and through an Evolution Fresh retail experience that began rolling out last month, the company says.