Starbucks, the global coffee chain, plans to spend $100m (£65m) to acquire the San Francisco-based artisan bakery business Bay Bread and its La Boulange brand, as it looks to upgrade its food offering.
Under the agreement, Bay Bread and its 19-strong La Boulange bakery brand will become a wholly-owned subsidiary of Starbucks, with plans to turn it into a nationwide chain.
Starbucks said it planned to make La Boulange products available in its company-operated retail stores in the US. The company also will continue to serve Bay Bread, LLC’s wholesale bakery customers and will evaluate expanding distribution over time.
The coffee chain has also announced plans to hire Le Boulange founder Rigo Pascal, who opened the first La Boulange store location in San Francisco in 1999, to create products for its US sites.
Howard Schultz, Starbucks chairman, president and chief executive, said: “This is an investment in our core business. After more than 40 years, we will be able to say that we are bakers too. 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. We looked at opportunities comprehensively when making this acquisition and we believe La Boulange is truly unique in terms of visionary leadership, product taste and quality, brand authenticity, bakery capabilities, and potential for growth.”
The move marks an increased focus on Starbucks’ food offerings. Food now accounts for $1.5bn in revenues across the group’s US company-operated stores and has grown by double digits in each of the last two fiscal years.
