by Lars H
If you think of hot coffee when you think of Starbucks, you’re behind the times. In the United States, it’s all about the cold drinks!
Here are some key points Laxman Narasimhan made about popular beverages at Starbucks on a recent 2023 investor call:
- Cold beverages make up 75% of U.S. beverage sales at Starbucks.
- The cold espresso platform saw 13% year-over-year growth, underscoring the continued popularity of cold espresso drinks.
- Cold brew specifically was mentioned as an area of focus, with the new cold-pressed Cold Brew made using the Oleato platform rolling out in 2024.
- Starbucks Refreshers, which skew toward afternoon/evening dayparts, saw double-digit growth across all dayparts highlighting the popularity of the refreshed platform.
- Customized cold foam was called out as the fastest growing customization at Starbucks, now driving over $1 billion in annual revenue.
- Food attach was at an all-time high, driven by breakfast sandwich demand. Food is seen as an incremental growth opportunity.
- Delivery has grown to a $1 billion business, doubling sales versus a year ago, representing a new occasion.
That means that cold espresso, Refreshers, cold foam customizations, cold brew, and food/delivery were all highlighted as popular and fast-growing parts of the Starbucks menu. The focus continues to be on drink innovation and expanding food sales.
The good news is that Starbucks is still working on improving their hot coffee technology too. They rolled out Mastrena 2 espresso machines to all of their stores, and they are currently installing new Clover Vertica individual coffee machines, which will deliver a larger variety of high-quality, on-demand hot coffee, including decaf.
But I’d describe this situation as a company that’s looking more and more like its big competitor, Dunkin’, all the time. Dunkin’ is also about food and dessert like drinks.