The Coffee Wars: Starbucks Tries to Fire Kraft
Only hours after Starbucks released better-than-expected earnings, Kraft made a statement about the relationship: "Kraft Foods' agreement with Starbucks regarding the sale of packaged coffee in grocery stores and other channels is perpetual. Importantly, if Starbucks decides to exit its relationship with Kraft Foods, the agreement requires Starbucks to pay Kraft Foods the fair market value of the business plus, in certain instances, a premium. Kraft Foods intends to keep the discussions with Starbucks private and will not be providing further details or comments at this time."
So, apparently, each side intends to keep the details private, but that claim is somewhat undercut by the fact that they both posted their comments in the press release sections of their corporate websites, for all to see. The feuding companies are clearly hoping to get some sympathy from customers and the press.
But the wrangling doesn't matter for consumers, at least for now. Starbucks doesn't appear to have any plans yet to pressure Kraft to settle by blocking the distribution of its packaged goods . Such a move would probably be bad for Starbucks' image and would hurt its retail sales -- perhaps significantly.
The struggle between the coffee company and food company is for now a tempest in a teapot, although eventually if legal action ensues, the claims and counterclaims could rise well into the tens of millions of dollars.