CHS Inc. Forms Venture With Drive-Through Coffee Chain
AM Online
November 1, 2006
CHS Inc., a diversified company whose holdings include convenience stores, announced it has formed a joint venture with Mountain Mudd, LLC, which operates drive-through specialty coffee kiosks in 22 states.
Under the agreement, CHS will partner with the present owners, Brenda and Dennis Burkhartsmeier, who will continue to manage and operate the business in Billings, Mont. Mountain Mudd Espresso, www.mountainmudd.com, was formed 13 years ago and has over 70 branded specialty coffee kiosks.
“We believe this is an excellent opportunity to enter this growing niche market,” said Leon Westbrock, executive vice president, energy, for CHS, in a prepared statement. “Our involvement with Mountain Mudd kiosks provides a unique way for both convenience stores and other businesses to expand their retail offerings.”
“The specialty coffee market is one of the fastest growing food service segments and is projected to expand by 7 percent annually,” said Brenda Burkhartsmeier, president of Mountain Mudd Espresso. “This joint venture with CHS will help us reach the rapidly growing drive-thru portion of the specialty coffee market.”
CHS Inc. ( www.chsinc.com) is a diversified energy, grains and foods company committed to providing the essential resources that enrich lives. A Fortune 500 company, CHS is owned by farmers, ranchers and cooperatives from the Great Lakes to the Pacific Northwest and from the Canadian border to Texas, along with thousands of preferred stockholders. CHS is listed on the NASDAQ at CHSCP.
Editor’s Insight: The coffee drive-throughs are a rising niche on the retail landscape. This partnership between a convenience store chain and a coffee drive-through chain makes good strategic sense. CHS is a significant company and could hasten the development of coffee drive-throughs.
As they expand, the drive-throughs will take coffee sales away from all other coffee retailers, including vending and office coffee service operators. The only way for vending and office coffee service operators to compete against these new players is to market products of comparable quality. The concept could also present an expansion opportunity for vending and OCS operators. 11-01-06 by Elliot Maras