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Seattle’s Best testing outlets in Walmart stores

Seattle’s Best testing outlets in Walmart stores

Coffee chain is experimenting with in-store cafes in four Canadian stores.

After losing some 225 café locations with the closure of Borders bookstores over the past year, Seattle’s Best Coffee is testing a new store-within-a-store concept in Walmart Supercenters in Canada, the company said Thursday.

Owned by Starbucks Corp., Seattle’s Best Coffee, or SBC, has reached the milestone of 50,000 points of distribution, a 66-percent increase over the past year, the company said, despite the loss of outlets following the bankruptcy of the Borders Bookstore chain.

Starbucks initially grew the SBC brand as a licensed concept within Borders locations, and most of the chain’s 325 locations are still in the bookstores.

In recent years, however, the Seattle-based coffeehouse giant ramped up efforts to build SBC as a more approachable and accessible alternative to its namesake brand through multiple channels, including franchising.

Company officials say Seattle’s Best has the potential to grow into a $1 billion business globally.

“Seattle’s Best Coffee is the coffee brand to watch right now,” said Michelle Gass, SBC president, in a statement. “Our dramatic expansion this past year confirms that we are delivering what consumers and our business partners truly want — a great tasting cup of premium coffee anywhere it’s needed.”

In addition to testing the new store-within-a-store concept in four Walmart Supercenters in Canada, an additional four are scheduled to open over the next 12 months as part of the pilot, said Jenny McCabe, SBC’s director of communications.

SBC has long offered a variety of flexible store sizes, from 10-square-foot kiosks to larger stand-alone cafes with indoor and outdoor seating. The Walmart version, ranging in size from 400-square feet to 1,000-square feet, will be a coffee bar with a walk-up window and seating at the bar.

McCabe said the company is testing the use of new equipment that could allow for more food and beverage offerings. Since Walmart doesn’t open until 10 a.m. in Canada, the focus will be less on breakfast and more on other dayparts.

The new pilot marks a shift in strategy directed at establishing SBC as a premium coffee option for a variety of retail executions that don’t serve name-brand coffee, including convenience stores, gas stations or family dining concepts, McCabe said.

“We have been in grocery and book stores, but we want to see the brand go into places that haven’t had premium coffee before,” she said.

SBC is now available in the roughly 25,000 Subway restaurants that serve breakfast, as well as at Burger King domestic locations. The coffee is also served in AMC Theatres and on board Delta Air Lines flights.

The 5,600-unit Taco Bell chain’s test of breakfast also includes SBC coffee, McCabe said.

In October Starbucks launched self-service vending machines offering Seattle’s Best coffee in hundreds of locations, such as ferry boats, college libraries, hospital waiting rooms and office break rooms.

The machines were developed to serve brewed coffee or café au lait with freshly ground beans for each serving, McCabe said.

Over the past year, the company has also seen double-digit increases in the sales of SBC coffee to workplaces, despite a negative trend for the industry overall, she added.

Grocery sales of the packaged coffee also continue to grow. In the past year, Starbucks changed the packaging of SBC packaged coffee in grocery stores, offering a “Levels” system to help consumers better identify the blend they like.

Contact Lisa Jennings at [email protected].

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