Explaining Southern California's economy

Starbucks 'Barbucks' to serve alcohol, Southern California will be sipping beer and wine

Customers queue for coffee at Starbucks

PAUL J. RICHARDS/AFP/Getty Images

Ready for your Pinot Grande? Starbucks, the giant coffee retailer, has been undertaking a transformational experiment for the past two years. Back in 2010, on its home turf in Seattle, it began serving beer and wine and premium food in a setting that was meant to evoke a soothing nighttime experience more than a peppy morning wakeup call. 

Now "Barbucks" is coming to the Southland. We don't yet know how many locations will serve alcohol along with caffeine, but we do know that the option will be available — and that Starbucks will be charging more-or-less typical prices. Wines will range from $7-9 a glass, while beer will clock in at a fairly modest $5.

We already know that Starbucks can print money, so to speak, by transforming coffee beans, milk, syrup, and other ingredients into $4 and $5 beverages. The beauty of wine and beer is that it requires much less labor to serve than producing a latte.

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Starbucks price hike: You will pay 10 cents more for your latte!

But only if you live in the Northeast or the "Sunbelt." Southern California will be spared. For now.

I hate to admit this, but I missed the spike in coffee bean prices in 2011. The commodity is now up 42 percent on the five-year average, according to Bloomberg (which also provided the video report on Starbucks that I've embedded above).

Why do I hate to admit this? Because I can't live without coffee. I guess the issue here is that I've been drinking such el cheapo coffee for the past year that I didn't notice. I certainly wasn't closely following the coffee futures market.

Now, I suppose you could take the 10-cent Starbucks price increase, on beverages like lattes and brewed java, as the perfect opportunity to do what those pop personal-finance folks are always counseling you to do, particularly at the beginning of a new year: Quit buying lattes at Starbucks and start investing your savings. 

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Starbucks buys Evolution Fresh for $30 million, but juice is just the beginning

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Stephen Chernin/Getty Images

File: A Starbucks Coffee barrista readies a beverage for a customer in the new 42nd Street store August 5, 2003 in New York City.

Yesterday, Starbucks announced that it's buying Southern California's own Evolution Fresh Inc., for $30 million. That's pretty small potatoes as M&A activity goes. But for Starbucks, buying the juicemaker — which, according to the Starbucks announcement, is "one of the only true juiceries left in the industry that still cracks, peels, presses, and squeezes its own raw fruits and vegetables" — is just the beginning of the beginning.

And a risky undertaking.

Starbucks wants to move beyond coffee and expand its presence far beyond its retail stores. So far, it's been doing this slowly and carefully — and has already endured one misstep, when it over-expanded prior to the financial crisis. In Steve Jobsian fashion, CEO Howard Schultz returned to the company to trim, reinforce, and realign. The ship was righted. But now it's looking to grow again. 

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Meet Starbucks, your new neighborhood investment bank

Customers queue for coffee at Starbucks

PAUL J. RICHARDS/AFP/Getty Images

Welcome to your friendly neighborhood investment bank. Do you want them to leave room for...return on investment?

Here's an idea that's going to get people talking — and funding small businesses. The New York Times' Joe Nocera writes his column today about Starbucks' plan to partner with microfinance organization Opportunity Finance Network to solve a major American problem: a lack of small-scale lending. The project is called Create Jobs for USA. It's a great idea, but it has at least one significant problem: return on investment for the Starbucks customers who would be putting up their money.

Starting November 1, while waiting for you nonfat vente caramel latte, you can donate, say...$5 to the cause. You'll receive a red, white, and blue "indivisible" bracelet (the bracelet is an inevitable piece of viral marketing these days). Starbucks will seed the fund with a $5 million donation. As Nocera points out, this will enable Create Jobs for USA and OFN to borrow against this fund, utilizing a 7-to-1 leverage ration. Presto! Your $5 becomes $35.

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