Numerous headlines were made this week when Starbucks bought Evolution Fresh, a super-premium healthy juice company. For Starbucks, this signals their entry into the health and wellness juice category, and may also spell the end of Naked Juice in Starbucks locations. First of all, who is Evolution Fresh and what makes them so special? Second of all, how will this affect the partnership between Starbucks and PepsiCo, with Pepsi bottling and distributing Starbucks Frappuccinos and Doubleshots? Will Pepsi’s Naked Juice follow the path of Happy Planet juices, the first juice and smoothie manufacturer in Starbucks coffee shops that was later replaced by Naked Juice when Pepsi and Starbucks entered into the distribution agreement?
In answer to the first question, Evolution Fresh differentiation is its unique pasteurization technique called High Pressure Pasteurization (HPP). This technique allows the liquid to be pasteurized in the bottle using little to no heat, maintaining the juice’s nutritional value as well as prolonging the shelf life. Other juices like Naked and Odwalla uses a technique called Flash Pasteurization”, which uses high temperature heat for 15 – 30 seconds to kill off bacteria and microorganisms. The main difference would be the use of heat to pasteurize the beverage, as flash pasteurization’s use of heat may slightly shorten the juice’s shelf life and also cause the loss of some vitamins.
Relating to the business and marketing aspects of this acquisition, Starbucks may have to look for a new distribution partner for their Frappuccinos and Doubleshots. With Naked juices being replaced with Evolution Fresh in Starbucks coffee shops, Pepsi may likely decrease their priority on re-stocking Starbucks products when inventory runs low. Other distribution options for Starbucks include regional beverage distributors or food distributors that sells products int he same grocery supermarket channels.
It will be interesting to see how the two companies treat each other when the partnership officially terminates – amicably or otherwise. With Starbucks initiating this juice purchase, they will be direct competitors in the juice category. Will Pepsi purchase or create their own coffee brand? After all, Coca-Cola does have their own boutique Chaqwa coffee brand, so maybe Pepsi will be developing their own coffee beverage to add to their overall refreshments portfolio.