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Seattle's Best Coffee set for cafes in Borders bookstores

By Monica Soto Ouchi
Seattle Times business reporter

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The coffee retailer said yesterday that beginning next year, Borders Books & Music would run Seattle's Best Coffee cafes in more than 400 existing stores and in new stores as they open.

Seattle's Best Coffee, purchased by Starbucks in April 2003, is a fully owned subsidiary of the Seattle-based specialty-coffee giant.

Starbucks has a similar, long-standing deal with bookstore chain Barnes & Noble, which sells Starbucks coffee products at 558 Barnes & Noble cafes.

The deal places its products inside the two largest U.S. bookstore chains.

This marks the second deal Starbucks has announced on behalf of Seattle's Best Coffee in recent months. Last month, Starbucks said it expanded its licensing agreement with Kraft to include national distribution of Seattle's Best Coffee products in supermarkets and warehouse clubs, including both milder and flavored coffees that Starbucks doesn't sell.

Seattle's Best has 3,500 food-service accounts with companies from Alaska Airlines to Royal Caribbean cruise line.

"It's allowing us to reach other customers," Starbucks spokesman Alan Hilowitz said.

Terms of yesterday's deal were not disclosed, and it's unclear what effect the licensing agreement will have on overall sales.

Starbucks doesn't break out specific sales, but its partnership with Barnes & Noble falls under its food-service business, which accounted for $71.4 million, or 5.4 percent, of sales in its most recent quarter.

Wall Street didn't bite on the news. Starbucks shares fell $1.95 to close yesterday at $43.73.
 
Monica Soto Ouchi: 206-515-5632 or msoto@seattletimes.com