Starbucks Announces US$100 Million Fund To Invest In Food And Retail Startups
Starbucks knows that it can't depend on the sales of its caramel soy latte forever if it wants to grow as a company. This is mainly the reason why the firm has now announced that it will be focusing on different investment opportunities, which should help boost its future growth. The coffeehouse chain revealed that it will be heavily investing in food startups in the coming years through a new venture fund with Valor Equity Partners; an investment company that had previously made huge investments into successful firms such as Tesla Motors.
Ahead of its upcoming shareholder's meeting, Starbucks announced that it has already prepared around US$100 million, which it plans to invest in new food and retail start-ups. The Valor Siren Ventures Fund also aims to raise an additional US$300 million from third-party investors. This will actually be the first time that Starbucks has made this kind of investment and it is yet to be seen if the strategy will work in the company's favor.
The move to invest in food and retail startups is likely a part of the ongoing efforts of the company's CEO, Kevin Johnson, to further integrate new technologies and digital trends into the firm. Since Johnson had taken the reins of the coffee giant, the firm has increased its digital footprint and engagement with customers. The company had also integrated different software and systems into its logistics and delivery services under Johnson's leadership. Prior to working with Starbucks, Johnson had mostly been the head of different major tech companies such as Microsoft and Juniper Networks.
In the wake of the relatively sluggish sales in the food industry over the past few years, food companies have now looked into other opportunities to protect their bottom lines. Investing in startups has become a very popular option, as it will allow companies to diversify their portfolios without having to invest a lot of money in research and development. Aside from Starbucks, numerous other food companies have also launched their own funds, including General Mills, Campbell Soup, and Kraft Heinz.
Aside from investing in new startups, Starbucks has also announced plans to fully update its stores around the world. The first stores that will be getting a makeover will be its store in New York City. Starbucks hasn't yet revealed just how exactly it will be renovating its stores, but it did mention that the renovations will not just be about changing the store's furniture. The changes will apparently include a reimagining of the stores a place that will suit their customer's needs.