Starbucks to Open Walmart Cafes Under Seattle’s Best Brand

Mild, lower-priced coffee part of push for casual coffee consumer

   

With gas and food prices straining many American consumers’ household budgets, you’re not likely to see a regular Walmart (NYSE: WMT) shopper making a detour to a Starbuck Corp. (NASDAQ: SBUX) café for a sip of its pricey brews. So the coffee giant has decided to bring its more affordable coffee brand, Seattle’s Best Coffee, to frugal Average Joes with a taste for a better cup of Joe.

We aren’t talking about finding Seattle’s Best Coffee on Walmart store shelves, however.  Seattle’s Best will be sold at its namesake cafés inside of Walmart.  Ten cafes are slated to open this month. Though corporate parent Starbucks has locations under its flagship “green mermaid” brand in Target (NYSE: TGT), Safeway (NYSE: SWY) and other stores, the push for Seattle’s Best represents a corporate strategy to highlight it’s lesser-known label.

It’s not the first time Seattle’s Best Coffee, which boosts 325 of its own cafes, has partnered with retailers or vendors to boost sales. The coffee is sold at more than 50,000 locations in the U.S. and Canada, including at privately-held restaurants Subway and Burger King, on Royal Caribbean Cruises (NYSE: RCL) at AMC cinemas, and on board Delta Air Lines (NYSE: DAL) flights.

If you’re worried you’ll have to learn a new trendy language just to order a cup of Seattle’s Best, don’t. The coffee is being marketed with colored number packages designed to explain the difference between the five blends. For example, the No. 1 blend in the gold bag features a light roast for a milder coffee experience, while the No. 5 blend in the purple bag offers a robust dark roast.

Seattle Best CEO Michelle Gass says the company is targeting generic coffee drinkers who may be enticed by a premium brand minus, the class statement. “People don’t drink no-name colas, but lots of people drink no-name coffees,” she said. “That’s because no one’s come in and said, ‘Don’t accept a bad cup of coffee.”

If consumers buy into the branding effort, Seattle’s Best Coffee could well be on its way to being sold in 100,000 retail locations and Starbucks just might achieve its goal of $1 billion in revenue.  Provided, that is, that Seattle’s Best doesn’t win over some Starbucks customers.

As of this writing, Cynthia Wilson did not own a position in any of the stocks named here.


Article printed from InvestorPlace Media, http://investorplace.com/2011/05/starbucks-sbux-walmart-wmt-seattles-best/.

©2014 InvestorPlace Media, LLC

Comments are currently unavailable. Please check back soon.