Coffee Still Key But Juice the Next Big Thing: Starbucks CEO

Ready for a juice bar on every corner? They'll be at your local Starbucks store.


CEO Howard Schulz told CNBC Wednesday that while coffee is still Starbucks' core product, juice is the next big thing.

"We can romance and merchandize the beverage as we did the coffee," the CEO said. "Customers want to eat healthier but are having a harder time getting the information they need. We will create a national retail brand around juice and wellness. Juice will be the hero."

The company opened its first Evolution juice bar in Bellevue, Wash., on Monday.

"Over the last few years we’ve done a lot of work in studying the health and wellness category, which is a massive market. We believe we have the opportunity to create a national brand in Evolution," he said.

The juices will also be sold in Starbucks stores and in grocery stores, just as the company already sells its instant Via coffees.

Besides recently introducing its own single-cup brewers, called Verismo, Starbucks said it would also make single-serve packs for Green Mountain Coffee Roasters's Keurig single-cup brewers. Schultz said there's room for both.

"This reinforces our relationshipwith Green Mountain , which is very strong," he said. "Their core business is around brewed coffee and we strongly believe that we an create an adjacency and create an espresso machine" called Verismo that will be sold in Starbucks stores.

Starbucks also said Tuesday it is expanding into the energy drink category with a line of "Refreshers" beverages, going head to head with Red Bull and others.

Schultz said the company will be remodeling 1,700 of its stores this year and opening thousands more, around the world. In China, Starbucks second largest market outside the U.S., he said there will be 1500 stores by 2015, with stores opening in India by the end of the year.

While he is hoping for 15 percent to 20 percent growth in earnings, he wouldn't say whether the price of a double latte would be coming down now that coffee prices are lower.

"We were thoughtful in not raising prices as much as everyone else did when prices went up," he said. "Now that prices are low we’re buying a fair amount of coffee, but its for fiscal 2013. …We’ll be thoughtful in 2012 in how we relate the coffee prices back to the consumer."

The Associated Press and Reuters contributed to this report.