Starbucks wants Brand Control!

Did you know that Starbucks’ products are sold in stores through Kraft? Neither did I. Well, apparently Starbucks and Kraft are at conflict over an agreement they have. The main focus of this issue is brand control.  Although Starbucks has been very successful with this agreement over the years, it claims that Kraft had recently breached this agreement. To me, this sounds a little bit fishy; since Starbucks’ agreement with Kraft has no definite ending, Starbucks seems to want to get out so it can make more profit. If they have control over their own brand, then they can market it how they want, steer it in the position they want, rather than follow what Kraft tells them.  It is interesting that Starbucks is bringing this information public at Christmas season, the time when Starbucks makes its speciality ‘holiday coffee’ and sells lots of pre-packaged coffee to customers. They must feel frustrated of Kraft’s buyer power, although it’s going to cost them quite a bit to get out Kraft’s grasp. Some say around $1.5 billion. Is it worth it? Hmmmm…

Another point is that Kraft increased profits of Starbucks’ products tenfold. Maybe Starbucks should reconsider, since their products are doing so well through Kraft?

It is also good to examine competitiors. Dunkin Donuts uses a third-party retailer in order to sell its products in grocery stores. They’re not complaining. But, maybe it’s just a matter of time. Starbucks may be a trend-starter.

On the other hand, Starbucks is everywhere. Literally….everywhere. Almost every single Safeway or Chapters has a Starbucks store, so why can’t they just sell coffee there?