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Starbucks Buys Bay Area Bakery to Revamp Food Operations

In a large-scale effort to revamp its food operations, Starbucks has paid $100 million cash to purchase renowned Bay Area bakery La Boulange, while also hiring French baker Pascal Rigo.

La Boulange and StarbucksOver time, the coffee company, hopes to offer La Boulange bakery products in all its U.S. retail locations. La Boulange currently operates 19 bakeries in the Bay Area, with a focus on fresh pastries and breads using natural ingredients.

“This is an investment in our core business. After more than 40 years, we will be able to say that we are bakers too,” says Howard Schultz, Starbucks chairman, president and ceo. “In La Boulange® bakery and Pascal, we’ve 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.”

Food currently accounts for $1.5 billion in revenues in Starbucks’ U.S. stores, and the revenue category has grown by double digits in each of the last two fiscal years.

“The acquisition of La Boulange bakery will help us to expand day-parts, drive customer loyalty and ultimately grow the overall business through differentiated brand experiences and multiple channels,” said Cliff Burrows, president of Starbucks Americas. “We will leverage our scale and premium product expertise to transform a core part of our business while building La Boulange bakery into a national artisanal bakery brand.”

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