Starbucks Corporation (SBUX - Free Report) announced its investment and signing of a global licensing deal with premium Italian bakery, Princi, based in Milan in a bid to offer more upscale food products.
The investment has been made in partnership with Milan-based private investment firm Angel Lab and Pekepan Investments. Terms of the deal were not disclosed.
Princi operates five restaurants across Milan and London. Princi restaurants, founded by Rocco Princi, are famous for their premium artisan breads and other handcrafted food based on family recipes.
Starbucks along with its partners will help open more standalone Princi specialty cafes around the world.
Moreover, they will make Princi the exclusive food supplier in all upcoming Starbucks Reserve roasteries including those scheduled to open in New York in 2018 and Shanghai in 2017. Starbucks Reserve is the coffee giant’s ultra-premium coffee brand and a key long term growth driver.
A roastery, on the other hand, is a unique concept of offering roasting, education and retailing in one café. Starbucks already operates a Reserve roastery in Seattle which will not offer any Princi bakery items. The company has plans to open between 7 to 10 full-scale roasteries in key cities around the world.
Separately, Princi premium bakery goods will also be made available in future Starbucks Reserve-only stores starting in 2017.
In a similar deal, Starbucks bought San Francisco-based La Boulange premium bakery goods brand in 2012. However, last year it closed all the 23 La Boulange bakery cafés as they did not fare well. Instead, Starbucks decided to expand sales of the La Boulange premium bakery items at its Starbucks outlets in San Francisco and across the U.S. and Canada. Additionally, the company ended its partnership with Pascal Rigo, the French baker and founder of La Boulange.
Stocks to Consider
Starbucks has a Zacks Rank #3 (Hold). Investors interested in the restaurant sector may consider stocks like Carrols Restaurant Group, Inc. (TAST - Free Report) , Famous Dave's of America Inc. and Dave & Buster's Entertainment, Inc. (PLAY - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy).
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