Market Overview

JAB Holding Thinks It Could Compete With Starbucks

JAB Holding Thinks It Could Compete With Starbucks

JAB Holding, a European investment firm, has been active in acquiring notable U.S. coffee and food brands. The company most recently acquired Keurig Green Mountain and Krispy Kreme Doughnuts and will add the brands to its existing lineup, which includes Peet's Coffee & Tea and Stumptown Coffee Roasters, among others.

According to Bloomberg, JAB is now looking to develop and manage a chain of restaurants that highlight more than one brand. The concept is called Simply Coffee & Bagels and as its name implies it will sell its branded coffee along with Einstein Bros. bagels.

The Coffee & Bagels restaurant is still small, but JAB Holding thinks it can take on Starbucks Corporation (NASDAQ: SBUX) by offering customers fresh baked goods in a coffee-shop atmosphere.

Related Link: Todd Gordon's Starbucks Trade

Starbucks isn't the only coffee chain around, but there are no major competitors that operate nationally or internationally in the mid to premium segment of the coffee market.

JAB could fill the competitive void with its unique concept. The company's Einstein Bros. bagel shops lacked the atmosphere of a fun cafe to visit, while its Caribou coffee chain wasn't offering consumers fresh baked goods throughout the day.

On the other hand, JAB's Coffee & Bagels locations are brightly lit with large community tables and a bar where customers can watch their favorite drinks being made. The locations are also large enough to hold a retail section that sells other branded products including packaged coffee, mugs and other merchandise.

More than 50 Coffee & Bagels stores will open in the near-term across the United States with 35 planned to be open by the end of the year.

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