Starbucks Via Sales Hit $100 Million
Just 10 months into its launch, global sales of Starbucks' Via Ready Brew instant coffee have reached $100 million, according to the company.
Not known for revealing specific product sales data, Starbucks in this case chose to trumpet the Aim milestone in a press release.
The announcement emphasized that Via's U.S. sales alone already are well in excess of $50 million, qualifying the launch as a "mega-hit" as defined by SymphonyIRI Group (which awards the designation to U.S. products achieving that sales threshold within their first year).
Via ranks among the top 3% of all new U.S. products, and now has about 30% market share within the U.S. premium single serve/pod coffee segment, which totals $330 million when Nielsen-tracked pod sales and Via sales are combined, the company added.
At its launch last fall, there was considerable speculation among branding experts that Via, which is sold in mass retail outlets as well as in Starbucks locations, would either not gain traction with fussy coffee consumers or gain acceptance but undermine Starbucks' core brand and cannibalize sales of its traditional, on-premises coffee offerings.
Instead, Starbucks' financials have continued to improve, with Via (among other innovations) playing a key role in its momentum and global expansion strategy.
The company recently reported record third-quarter earnings, with diluted EPS up 35%, to $0.27. Both global and U.S. comparable-store sales were up 9% (each reflecting a 6% traffic increase and 3% increase in average ticket), and international comp-store sales were up 6% (reflecting a 4% traffic increase and 2% increase in average ticket).
Year-to-date, Starbucks reported diluted EPS of $0.87, up 172% versus the same period last year. Licensing net revenues -- which include the retail portion of Via sales, along with other expanding, licensed products -- rose 9.8% (to $301 million), and licensing's share of total net revenues rose from 12.5% to 12.7%.
Starbucks made a point of noting that its surveys of Via customers show that 55% are drinking the beverage at home, 25% at work and 20% while "on the go," and that nearly 40% indicate that they are drinking Via as an "additive to beverages they are currently drinking, rather than as a replacement [of] existing Starbucks coffee."
Starbucks president/CEO Howard Schultz noted that it had taken three years to achieve the $100 million mark for Frappuccino blended beverages (one of the company's most successful lines to date), and confirmed that Via will continue to be aggressively expanded both domestically and internationally. Starbucks supported Via's launch with its biggest-to-date marketing campaign, and has continued to heavily invest in the brand with marketing spanning both traditional and digital channels.
Retail distribution of Via, initially 12,000 North American outlets (Starbucks locations and some presence in chains like Costco and Target), now spans 37,000 U.S. locations, including about 25,000 food, drug and mass merchandisers stores and 12,000 Starbucks stores and food service accounts. (Via is also sold online.) By the end of fiscal 2011, Starbucks expects to add another 3,000 retail and food service distribution points.
"We are continuing to drive steady increases in Via distribution...channel by channel, country by country," Schultz said. Within the next few weeks, Starbucks will announce a new international market for Via, which is already in the U.K. and Japan, as well as another new product innovation for the line, he reported.
The Via line, which started with regular Columbia and Italian Roast offerings, already has been expanded with a decaf Italian Roast launched last November and iced coffee launched in June. These represent just the "beginning" of an "innovation pipeline" that is key to broadening Via's customer base in the U.S. and globally, Starbucks confirmed.
In mass retail outlets, the suggested retails for Via are $2.95 for three servings and $7.49 for seven servings. Starbucks stores also sell the three-pack (same suggested retail), as well as a 12-pack at $10.95, and a five-pack of iced coffee (16-ounce servings) for $5.95.