Starbucks Corporation (SBUX) is a global coffee roaster and retailer with operations in 70 countries. In 1971, Starbucks had one location in Seattle's Pike Place Market. By the end of 2018, the company had grown to over 29,000 locations globally, reportedly opening a new location in China every 15 hours. All of that expansion translates directly into company value for Starbucks, whose market capitalization has grown to $82.85 billion as of Dec. 13, 2018. Starbucks announced its Q4 2018 earnings on November 1, 2018. The company reported $6.3 billion in revenues this quarter, compared to $5.7 billion over the same period last year.
In addition to coffee products, Starbucks sells a wide variety of branded beverages, food items, and other products through its retail, independent grocery, and convenience stores. In addition to the company's Starbucks-branded businesses, it also owns and operates a handful of other beverage and food companies. In this article, we take a closer look at the top six companies owned by Starbucks.
Seattle's Best Coffee
Seattle's Best Coffee was established as a coffee roaster and retailer outside of Seattle, Washington, in 1970. Following numerous name and ownership changes, Starbucks acquired the company in 2003 for $72 million. As of 2017, Seattle's Best Coffee is the second-largest coffee roaster and wholesaler in the United States behind only its enormous parent company.
In 2014, Starbucks closed the last of its company-owned Seattle's Best Coffee stores. However, the company's brewed and packaged coffee is available in more locations than ever before. Its retail partners include Burger King and Subway restaurants, Chevron service stations, AMC movie theaters, and Safeway grocery stores.
Teavana is a retail chain specializing in brewed and packaged loose-leaf tea, as well as tea accessories and related products. The first Teavana teahouse opened in Atlanta, Georgia, in 1997. By the time Starbucks acquired it in 2012, the fast-growing retail chain had 337 locations. As of 2017, the company had expanded to 379 company-owned retail locations across the U.S., Canada, and Mexico. In a Q2 2017 earnings call, Starbucks announced it would shut down all 379 Teavana retail stores, citing that the brand was "perpetually underperforming". Starbucks continues to sell loose-leaf teas and tea-related products under the Teavana brand in-store and online.
Tazo manufactures premium packaged tea and herbal tea products. The company was established in 1994 in Portland, Oregon, and Starbucks acquired it in 1999 for $8.1 million. According to Starbucks, Tazo products accounted for more than $1 billion in sales by 2012. After a slow fiscal 2016, in which Tazo netted $112.5 million in sales, Starbucks announced in Q2 2017 that it planned to sell the Tazo brand to consumer goods giant Unilever (UL). Although Tazo is no longer available in Starbucks stores, the brand remains a fixture in grocery stores and other retailers around the world. The company also sells bottled beverages in North American markets.
Evolution Fresh manufactures bottled fruit juices and vegetable and fruit juice blends, which are sold at Starbucks locations and other grocery stores and retailers. The company's business is based on the use of fresh ingredients, cold-press juicing techniques, and high-pressure processing known as "Pascalization." Starbucks acquired Evolution Fresh in November 2011 for $30 million, when the health and wellness center was just a $50 billion industry. Evolution Fresh fruit smoothies and packaged yogurt products are available at Starbucks locations. The company also operates three retail locations in Seattle and Bellevue, Washington.
Torrefazione Italia Coffee
Torrefazione Italia Coffee originated as a coffee roaster and retailer in Seattle, Washington. Starbucks acquired the company as part of its $72 million purchase of Seattle's Best Coffee in 2003. By 2005, Starbucks had closed all Torrefazione Italia locations. Starbucks continues to market packaged coffee under the Torrefazione Italia brand and the brand is widely available at Starbucks locations, grocery stores, and other retail locations.
Ethos Water is a Starbucks subsidiary designed to raise awareness about water access issues for people in developing countries. The company also funds charitable grants for groups working to alleviate such problems, with five cents from each bottle of Ethos Water going to the Ethos Water Fund. As of November 2018, the fund has distributed more than $12.3 million in grants to water-stressed countries.