Starbucks will soon start selling fresh juices. Now that’s the last thing that one would associate with this coffee brand, right? For something like Starbucks, the immediate associations that come to mind would be coffee chain, fragrance, ambiance, friends, chatting and the colour green. But if you recall, Starbucks recently changed its logo and most importantly removed the words ‘Starbucks Coffee’ from it. As I had argued in a previous post, the removal of these words wouldn’t have any adverse effect on the brand, given the worldwide recognition that the mermaid enjoys. However, I was worried about the reason behind the change: extensions.

Starbucks has already seen a few disasters, having tried to extend its brand into music, ice cream and alcohol. And now it plans to enter the health and wellness sector through its acquisition of US juice business Evolution Fresh for $30 million. According to Starbuck executives, this move will mark the first step towards launching a separate health and wellness concept in 2012. Evolution Fresh is in the business of selling fresh juices which are “never heated” owing to the use of a new technology called High Pressure Pasteurization (HPP).

But will this deal work for Starbucks? The first question that comes to my mind is whether Starbucks will continue the brand or will it assume a Starbucks identity. This question is very valid since Evolution Fresh has a premium positioning although Starbucks is more well known brand. This question becomes even more relevant in the light of Starbucks announcing the launch of a completely new health and wellness concept next year. So will there be a portfolio of brands or just one new brand or will everything operate under the Starbucks name? These questions must be answered.

From a purely business standpoint, the move makes a lot of sense given the increasing demand for this sector. Furthermore, coffee sales are reaching a saturation point, and this offers a great way to grow in a similar segment. Starbucks enjoys another distinct advantage because of this aspect and that is its distribution network and operational excellence. The uniqueness of the juices along with the reach makes this a potential winner for Starbucks. The synergies in this sense have opened up a world of opportunities for this small brand.

The only question that remains as pointed out earlier is how the branding is managed. Coffee doesn’t exactly go well with fresh fruit juices. Yes, coffee and juices can and are sold together. But the moment one steps into a Starbucks outlet, one is greeted by the strong smell of coffee. Will this serve as a deterrent for the health conscious customers? I know I wouldn’t be thrilled to have caffeine wafting all around as I sip on strawberry juice. Starbucks should be very careful from the outset as to how it makes its foray into the new sector. But other than that, it’s definitely making the right moves.