Starbucks Corporation, the world's largest coffeehouse company, on Monday announced it has acquired San Francisco-based bakery chain Bay Bread, LLC and its La Boulange bakery brand for $100 million.
Starbucks also announced the hiring of renowned French baker Pascal Rigo, whose recipes are to be introduced into its U.S.-operated stores under the La Boulange brand. "After more than 40 years, we will be able to say that we are bakers too," said Starbucks chairman, president and CEO Howard Schultz.
"In La Boulange bakery and Pascal, we've found a company and a culinary artist who share our passion for creating premium products, reinventing and elevating an entire product category, and delivering the best customer experience," Schultz added. The acquisition of Bay Bread is the company's largest ever.
Starbucks, which operates more than 17,000 retail stores in over 55 countries, has been able to successfully introduce food as an important part of the company's core business. According to a company statement, food now accounts for $1.5 billion in revenues in U.S. company-operated stores and has grown by double digits in each of the last two fiscal years.
With the announcement, Starbucks said it plans to make La Boulange products available in Starbucks company-operated retail stores in the United States over time, although a timeline was not immediately provided. La Boulange bakery operates 19 retail locations in the Bay Area and sells its products in several upscale restaurants, hotels, and specialty grocery stores in the region.
According to the agreement, Bay Bread, LLC and the La Boulange bakery brand will be a wholly-owned subsidiary of Starbucks Corporation. The acquisition is expected to dilute earnings by approximately $0.02 per share in the second half of fiscal 2012, compared to the previously announced earnings targets.