If you listen to conventional wisdom, a big dominant online presence is the must-have, go-to strategy for delivering products and services to your customers. Starbucks (SBUX) is one of the great innovators in the beverage industry. They have built a great network of stores to deliver coffee, tea, and other specialty beverages. They have also done a nice job of delivering healthy snacks and light meals to complement their beverage offering. Like all good companies, they build their brand through the customer experience, advertising and sales of logoed products. We do not know anyone who did not have at one time or another a Starbucks branded product. Visit virtually any company's lunch room and you are sure to see a coffee cup, mug, tumbler and/or travel mug with the Starbucks mermaid front and center.
There is another big part of their business that does not get much attention. That segment sells coffee beans and brewing accessories to businesses. Those businesses buy those products a number of ways. The can buy supplies directly from Starbucks online, from the company stores, third-party distributors or retailers like grocery stores or big-box retailers like Costco. Starbucks is a very well run company that cut its teeth by bucking the trend. Well, it seems they have done it again.
