Starbucks Corp (SBUX.O) wants to make sales of its coffee and other products in the grocery aisle rival its traditional cafe business, according to Chief Executive Howard Schultz.
The world's biggest coffee chain is betting it can use the power of its brand to sell a portfolio of goods -- such as Via instant coffee and bottled Frappuccino -- everywhere food and beverages are sold, whether in a supermarket in the United States or a vending machine in Asia.
"The CPG (consumer packaged-goods) business as we know it today will rival the success of our Starbucks retail business" at some point in the future, Schultz said at the company's annual shareholder meeting in Seattle on Wednesday.
That is an ambitious target for Starbucks, whose U.S. retail business is its powerhouse, generating 71 percent of its overall revenue of $10.7 billion for the fiscal year that ended October 3, 2010.
In 2010, Starbucks' global consumer packaged-goods business brought in only $707.4 million in revenue. It will take five to 10 years to build the business up to the level of the cafe operation, said Chief Financial Officer Troy Alstead.
Starbucks took a big step toward its goal on March 1, when it split with long-time grocery distribution partner Kraft Foods Inc (KFT.N).
While it is not known how much it will have to pay Kraft for ending that relationship, the move gives Starbucks more control over packaged coffee sales through supermarkets and other stores.
Starbucks changed its logo this month, removing the words 'Starbucks' and 'coffee', a move which Schultz said would help its grocery business as it expands beyond coffee into tea, juice, and a variety of other products.
At the same time, Starbucks is moving heavily into the $4 bill