A Starbucks customer drinks coffee in Palo Alto, Calif., Tuesday, Feb. 26, 2008.
Eyewitness NewsNEW YORK -- Starbucks looks to expand its food business with a $100 million cash deal to buy a small bakery chain. The Seattle-based coffee chain says baked goods from La Boulange will start replacing its current lineup early next year, starting with French pastries such as the croissant.
Starbucks also says it plans to make the San Francisco-area bakery into a national presence in the years ahead.
Food has become an important part of Starbucks' revenue stream in recent years, with the segment now generating $1.5 billion a year. About a third of the purchases in its U.S. locations include a food item.La Boulange, which also serves salads and sandwiches in a casual sit-down setting, has 19 locations in the Bay Area.
The deal positions Starbucks to enter a fast-growing segment of the restaurant industry currently dominated by Panera Bread.
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