Starbucks to Acquire La Boulange Bakery for $100 Million

SEATTLEStarbucks Coffee Company has entered into a definitive agreement to acquire San Francisco-based Bay Bread LLC and its La Boulange® bakery brand for $100 million in cash. The acquisition is the next step in Starbucks plan to elevated its core food offerings and build a premium, artisanal bakery brand.

Starbucks food portfolio is an important part of the companys 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.

Starbucks also announced it will hire renowned French baker Pascal Rigo, who will use his visionary leadership to bring the artistry of the French bakery to the marketplace in a similar way that Starbucks brought the romance of the Italian espresso bar to many North American coffee consumers for the first time. Pascal will be named senior vice president and general manager of La Boulange bakery at Starbucks upon closing of the acquisition.

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 Pascals secret and storied recipes into its U.S. company-operated stores under the La Boulange® brand, while also accelerating the expansion of the companys 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 La Boulange bakery and Pascal, weve 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."

Over time, Starbucks plans to make La Boulange products available in Starbucks company-operated retail stores in the United States. The company will continue to serve Bay Bread LLCs wholesale bakery customers and will evaluate expanding distribution over time.