Starbucks to expand Seattle's chain
First of all, Starbucks owns Seattle's Best Coffee. Who knew? I only found that out recently, and it seemed like something I should have already known. Well, it happened almost seven years ago but don't expect Starbucks to go out of its way to make that information public. They don't deny it, but the acquisition helps cater to a different coffee drinking segment than Starbucks has typically targeted.Starbucks coffee is the gold standard but is often criticized for its price. Seattle's is able to offer a pricepoint that is generally lower by stripping away alot of the "cafe" elements built into a Starbucks. Starbucks is also able to replace some of its placement in grocery stores with the Seattle's brand coffees to preserve its high-priced brand.Starbucks made the news last year for shutting down many locations, particularly outside of the US. A struggling global economy hurts the luxury brands, and for a drink as simple as coffee, Starbucks was no exception. Before the end of December however, a spokesperson for the Seattle's brand announced aggressive plans to boost expansion in the next five years. 200 potential franchisees were invited to a webinar meant to encourage sign-ups.My guess? During a recession, people change their spending habits. They find less expensive ways to get all the same satisfaction, and Starbucks is wise to the fact that while there is still room in its high-price niche, customers they lost during the recession will are not coming back. Those customers have descended into the next price segment down and are perfectly satisfied with the coffee in that segment. The best thing for Starbucks is to preserve its brand but compete aggressively in the other niche through this subsidiary and its own wholly-developed brand.