Alstead: I think it’s too early for us to even begin figuring out what that number could be. We know in the U.S. there are hundreds of opportunities for additional Teavana stores. Outside of the U.S. it’s a tremendous opportunity. Tea is a huge, it’s an ancient beverage. It’s been around forever. It’s a part of people’s lives and their experiences. It has a very important foot forward in health and wellness for people. And then you bring the energy of a new contemporary teahouse idea to it that we can innovate around and be a part of. We think there’s a tremendous global opportunity for tea.
Tom: Do you have a sense that it’ll be a bigger international business than U.S. business, or that is also an unknown?
Alstead: I think if we were to look 20 years from now I think that’s very possible. In the short term because of the branding and the presence here, Teavana will be larger in the U.S. for quite some time. But much more tea is consumed outside of the U.S. than in the U.S.; much more coffee is consumed around the world outside of the U.S. than in the U.S. So the fact that we have been a U.S. company and still have 75% of our business in the U.S., over time I think that we continually progress increasingly toward a global opportunity.
The third leg of growth, if I can, Tom, is on Teavana, it’s the Starbucks Corporation (NASDAQ:SBUX) store, it’s the Teavana store, and then it’s CPG. We have built for ourselves over time deep capabilities in CPG, all those activities that happen outside of the Starbucks store where a customer has a chance to engage with our brands and products. That is in food service channels and restaurants. It’s down the grocery aisle. All those opportunities are very valuable to us in our core coffee business. They are valuable to us with our Tazo tea business and now as we, over the next year or two, really bring on to that platform, Teavana products and all form factors — huge growth opportunity.
Tom: Did you all think about changing the Teavana name when you acquired it or would you think about it going forward? Overall I love the Starbucks brand so much, and maybe it’s just a new brand takes time to get accustomed to, but for me saying, “Let’s go to Starbucks, let’s go to Starbucks, let’s go to Teavana,” hasn’t yet caught for me, but that just may be because it’s not as prevalent out there.
Alstead: In 1980, I think you’d have said the same thing about Starbucks Corporation (NASDAQ:SBUX). We’ve build that brand over the years and invested in it to now it’s a part of people’s lives. We love the Teavana brand. We love what they’ve built with it. We think it’s got huge opportunities to build around that brand and grow it from here forward, so it’ll absolutely remain. That’s a big part of what we’re excited about with it.
The article Starbucks CFO: Tea Will Be Big Growth Driver originally appeared on Fool.com and is written by Tom Gardner.
Tom Gardner owns shares of Starbucks. The Motley Fool recommends Starbucks. The Motley Fool owns shares of Starbucks.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
