Starbucks Buys Bay Bread

The French-themed bakery will provide new menu items for U.S. Starbucks locations.

June 06, 2012

SEATTLE - Responding to customer demand for more wholesome and delicious food options, Starbucks Coffee Company has entered into a definitive agreement to acquire San Francisco-based Bay Bread and its La Boulange bakery brand, as well as to hire renowned French baker Pascal Rigo. This acquisition will bring the French bakery to the marketplace in a similar way that Starbucks brought the Italian espresso bar to many North American coffee consumers for the first time.

La Boulange bakery and Pascal are known for skillfully crafting authentic French pastries and breads from scratch using high-quality, fresh ingredients. With this acquisition, Starbucks plans to introduce many of Pascal??s secret and storied recipes into its U.S. company-operated stores under the La Boulange brand, while also accelerating the expansion of the company??s retail footprint over time in key U.S. cities to further build a differentiated brand and customer experience unique to the premium retail bakery café category.

"This is an investment in our core business. After more than 40 years, we will be able to say that we are bakers too," said Howard Schultz, Starbucks chairman, president and CEO, in a press release. "In La Boulange bakery and Pascal, we??ve found a company and a culinary artist who share our passion for creating premium products, reinventing and elevating an entire product category, and delivering the best customer experience."

Starbucks?? food portfolio is an important part of the company??s core business that represents a significant opportunity for continued growth in multiple channels. In recent years, Starbucks has made major enhancements to its food offerings based on customer feedback, including removing artificial ingredients wherever possible and diversifying its portfolio to include smaller portion sizes. Food now accounts for $1.5 billion in revenues in U.S. company-operated stores and has grown by double digits in each of the last two fiscal years.

"The acquisition of La Boulange bakery will help us to expand day-parts, drive customer loyalty and ultimately grow the overall business through differentiated brand experiences and multiple channels," said Cliff Burrows, president, Starbucks Americas, who will oversee the integration and expansion of La Boulange. "We will leverage our scale and premium product expertise to transform a core part of our business while building La Boulange bakery into a national artisanal bakery brand."

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