Starbucks Buys Teavana Holdings

The latest acquisition moves Starbucks further out of the coffee zone (and into the green)

The number of properties growing under the Starbucks name just got one bigger: Starbucks announced today that it is buying Teavana Holdings Inc., a tea store chain, for $620 million. 

In its largest acquisition yet, reports Bloomberg, it's clear that Starbucks is moving into the tea game. Teavana has 300 storefronts and sells loose-leaf, exotic teas in stores. One analyst told Bloomberg that Teavana is an even more recognized brand name than Tazo, Starbucks' in-house tea. 

CEO Howard Schulze told Reuters that the plan is to open more Teavana stores and to add "tea bars" in existing Teavana stores with prepared drinks. Reminiscing about when Starbucks first opened an espresso bar in 1987, Schulze said, "We will do something very similar over time with Teavana... We will do for tea what we did for coffee."

Some say that the new move into the tea business is good for its further expansion into Asian markets, where tea reigns over coffee consumption. The acquisition follows this summer's purchase of the La Boulange Bakery, and the purchase of Evolution Juices before that. Clearly, Starbucks just wants to rule the beverage world. 

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Brian_H's picture

Schwartz says "We will do for tea what we did for coffee".... you mean cheapen the product and spread it out to every store and dilapidated strip mall in the nation? It is a sad day for tea drinkers. The difference with coffee is that Starbucks always had a burnt overcooked bean product, whereas Teavana has some very unique high quality teas. I guess my wife and I will now have to do the same thing for tea that we do for coffee; shop anywhere but Starbucks.

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