Coffee giant Starbucks recently paid $2.7 billion dollars to get out of a distribution contract with Kraft Foods Group. Starbucks CEO Howard Schultz had this to say about the costly decision,“Having gained full operating control, we now have the flexibility and the freedom to control our own destiny and, most importantly, preserve and enhance the Starbucks Global business and brand around the world.” Starbucks executives believe that the future of the brand is one with a a large Consumer Packaged Goods element along with the development or their sales to hotels, airlines etc… Their CPG sales for the fiscal 2013 year hit $1 billion dollars which is double their sales from 2010. I found this article and more specifically decision by the Starbucks executives to be quite interesting because I had never considered how their operations deals and model could have been impacting their sales in such a way. The CEO explained that prior to paying out of the contract with Kraft they could only produce singe-serve coffee products for Kraft’s Tassimo System, forcing them to loose out on sales from competing systems such as Verismo  and K-cups. Hopefully investors agree with the CEO that this decision will pay off for Starbucks in the long run allowing their business to have more direct control of product channels and operations but and that the price of freedom in this case wasn’t too high!