coffee

Starbucks Will Add More Cold Caffeine To Menu In 2021


If it’s cold, it’s hot for Starbucks.

In the spring of 2021, the coffee house chain will add to its growing cold-beverage offerings with the oat-milk-infused Shaken Iced Espresso.

Starbucks says the launch will address a generational shift in consumer tastes while addressing the needs of those who are health-conscious—a segment representing 26% of its customers.

“Millennials and Gen-Z-ers under 30 are two times more likely to drink cold coffee,” Rosalind Brewer, COO and group president, Americas, said last week during the company’s biennial Investor Day event last week.

“That's great news as cold beverages have driven more than $1 billion in sales over the past three years. And just like the rest of our cold platform, we believe this new drink will resonate all year across all day parts.”

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U.S. same-store sales in September declined 4%, making “a vast improvement from the approximately 65% decline we experienced at the depth of the pandemic only five months ago,” said Starbucks president and CEO Kevin Johnson.

At the end of the fourth quarter, approximately 63% of Starbucks stores offered limited seating. The company continues to close “underperforming” stores in dense urban areas while adding curbside pickup to company-operated store in the suburbs.

According to place-based data provider Placer.ai, April was the worst month for Starbucks in terms of monthly visits, which fell 64.7% compared to April of 2019. While visits were down 18.9% in October, a resurgence of COVID-19 cases helped contribute to a 23.3% drop in November.

As of Sept. 27—the end of Starbucks’ fiscal 2020—the Starbucks Rewards loyalty program had 19.3 million 90-day-active members, a year-over-year increase of 10%, but still lower than before the pandemic.

The bigger target is the company’s “addressable customer base—those customers who already know our brand and visit us,” which is “approximately 75 million,” said Brewer.

In September, Starbucks revised its loyalty program under the Stars For Everyone banner. That gave people who join the program more payment options—including cash, PayPal and credit/debit cards—with which to earn rewards “Stars.”

“What we’re seeing is that we are engaging our occasional customer, and that is something that we have not been able to do before we introduced Stars for Everyone,” Brewer noted.

As reported on Wednesday by Reuters, Starbucks has suspended two-for-one Happy Hour events scheduled for Dec. 17 and Jan. 7 due to overcrowding concerns amid the resurgence in coronavirus cases.

Happy Hour events occur from 2-7 p.m. on certain Thursdays for people who download the Starbucks app.

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