Kraft to Distribute Starbucks Beans to Supermarkets

Kraft Foods Inc., the maker of Maxwell House coffee, has agreed to market and distribute Starbucks Coffee Co.’s specialty coffee beans to more than 25,000 grocery stores in the U.S.

The agreement is part of a long-term deal to combine Starbucks’ experience in producing premium coffee with Kraft’s knowledge of marketing, selling and distributing packaged goods directly to groceries, the companies said Monday. Terms of the agreement were not disclosed.

“Thanks to Kraft, we are now in a position to provide Starbucks coffee through grocery stores nationally much quicker than we would have been able to do it ourselves,” said Howard Schultz, Starbucks chairman and chief executive.

Schultz said Kraft, a division of Philip Morris Cos., may eventually place on supermarket shelves the upscale foods that Starbucks is developing for its retail stores and its new chain of Cafe Starbucks restaurants.

Starbucks shares surged $5.19, or 14%, to close at $41 on Nasdaq. Philip Morris shares rose 19 cents to close at $46.13 on the New York Stock Exchange.