• by Steve Ellwanger , February 2, 2022

Starbucks is entering the energy drink category and expanding its retail presence in ready-to-drink coffee at a time when cold offerings account for more than half of its restaurant beverage sales—up from 25% five years ago.

Three fruit flavors of Starbucks Baya Energy—containing caffeine from coffee fruit, which encase the beans in coffee plants—have rolled out to retailers nationwide and online sales channels.

Starting next month, the energy drinks will be sold at Starbucks’ U.S. locations.

Starbucks Baya Energy is the latest launch from the chain’s North American Coffee Partnership joint venture with PepsiCo Inc., which  dates to 1994 and now holds nearly 80% of the ready-to-drink coffee market.

“Energy drinks represent a rapidly growing category. We believe this new beverage differentiates us, opening up another category in the portfolio for growth,” Starbucks president and CEO Kevin Johnson said yesterday on a Q1 earnings call.

Several new Starbucks RTD beverages that will launch later this year include Frappuccinos with oatmilk. The chain debuted the Oatly brand of oat milk at its U.S. stores a year ago next month.

In an interview this morning on CNBC, Johnson said that five years ago roughly 25% of the chain’s U.S. beverage mix was cold offerings, but now it’s more than 55%—with growth largely driven by younger customers.

“That really is giving us a competitive advantage. The fact that we can personalize and customize those beverages with different cold foams and different sweet creams has really made them popular beverages,” said Johnson.

Starbucks’ national television spending for CPG products rose to $45.6 million in 2020 from $29.7 million in 2019, and declined to $27 million last year, according to data from iSpot.tv.

In the quarter ended Jan. 2, comparable-store sales at company owned, U.S. locations were up 18%. The number of 90-day active members of Starbucks Rewards increased to 26.4 million—up 21% year-over-year.

The company says loyalty members visit stores three times as much as non-members.

According to place-based data provider Placer.ai, the Omicron variant of the pandemic impacted foot traffic to Starbucks last month. Weekly visits were up 1% in the week of Jan. 3 but declined 4.1% and 12.1% in the weeks of Jan. 10 and Jan. 17, respectively, compared to the same periods in 2020.