Last year Starbucks put the "cold-crafted" juice and smoothie market at $3.4 billion, including $1.3 billion of juices made at home. Howard Schultz, Starbucks' chairman and CEO, told analysts the company intends to reinvent the category "in the same tonality that we have reinvented, over the last 40 years, the basic commodity of coffee."
And some tone it is: Starbucks now operates more than 17,000 coffee stores in 55 countries. The company hasn't disclosed how many Evolution Fresh stores it envisions, although Schultz has mentioned "a national footprint of stores." He also plans to distribute Evolution Fresh products nationally in Starbucks stores, and capture a bigger piece of the ready-to-drink business in grocery and mass-merchandise outlets. "We are making a full court press nationally in building the brand," he told analysts.
Matthew DiFrisco, a restaurant analyst at Lazard Capital Markets, thinks the opportunity for Evolution Fresh could be somewhere between 500 and 1,000 stores nationally. Starbucks, which trades for $51.96, is on the firm's "fresh money" list, and the analyst has a price target of $69. He sees the Evolution Fresh brand as an opportunity to expand Starbucks' higher-margin consumer packaged goods and food-service business, whose sales could reach $1.3 billion in the current fiscal year, nearly double the level of four years ago.