What Distribution Channels Does Starbucks Use?
The mobile payments business and the consumer packaged goods, or CPG, business are two distribution channels that make up what Starbucks calls its blueprint for profitable growth. Traditionally, the global coffee and tea giant's retail stores have been its main distribution channel. As of 2015, it wants to go beyond that, and its CPG business is growing.
The CPG business includes the VIA Ready Brew line of instant coffees that are sold at stores like Safeway and Walgreens. Additionally, Starbucks has entered the premium single-cup market; this is the channel with the so-called K-Cups. An extension of this is the on-demand single-cup brewing system featuring Starbucks and Seattle's Best Coffee coffees and Tazo teas that it has developed specifically for hotel guests in the United States.
Regarding mobile, although the Starbucks Card Mobile is now discontinued, in 2011, it was a success: more than 3 million people had used it. In 2013, its mobile payments application was equally successful; Starbucks claimed that about 11 percent of its sales were from its own mobile wallet. The app continues to be a key distribution channel for the coffee and tea purveyor.
In 2011, the company entered into an agreement with HMSHost to build and operate Starbucks stores in airports and motorway travel plazas.