Sayonara, pumpkin scones? Starbucks buys San Francisco bakery chain

Jun 4, 2012

Starbucks is thinking beyond cake pops and pumpkin scones. The coffee giant says it’s spending $100 million to buy a company called Bay Bread in San Francisco. It’s an acknowledgement that the company’s baked goods have lagged behind the quality of its coffee.

The deal will give Starbucks 19 bakeries called La Boulange, which specialize in French pastries like brioche and tarts. Chief Executive Howard Schultz says he plans to keep the La Boulange brand and start adding more pastries to Starbucks stores next year.

"One third of our customers and 20 percent of the business is food. We think there's an enormous opportunity to grow that," Schultz said. "This is where the company is going in the future."

Starbucks is also hiring Pascal Rigo, the French baker who created La Boulange. Schultz says he plans to have Rigo work with Starbucks suppliers to teach them how to make La Boulange products.

Buying a bakery chain is just the latest effort by Starbucks to expand beyond lattes. Last year, the company bought a juice business called Evolution Fresh.