Here Are 5 Big Details Starbucks Just Revealed to Investors

Starbucks reported earnings this week, which included weakness in the U.S. and China but stronger profit margins. However, company executives revealed several interesting details during their earnings call.

Starbucks plans to introduce three new beverage platforms over the next six months, aimed at Gen Z and millennial customers across the range of coffee and cold beverages. Afternoons are key for the chain, as it lost its occasional customers who typically visit in the afternoons last quarter. Starbucks is also introducing a new coffee roast, Starbucks Milano Roast, to celebrate its five years in Italy, the country of its inspiration.

The company is also testing delivery-only kitchens such as CloudKitchens and testing overnight orders with delivery company Gopuff. Starbucks-trained baristas will prepare food and drinks inside Gopuff’s microfulfillment centers to be delivered in 30 minutes or less between 5 p.m. and 5 a.m. Gift cards have become a popular item during the holidays, with the company selling a record number of gift cards in the last three months of 2023, making it the second most popular gift card.

Starbucks has also connected its loyalty program to other brands, announcing that the next partner for the loyalty program is Bank of America. Starbucks has thrived with its loyalty members, who now number 34.3 million people and account for 59% of spending at its corporate locations. Turning occasional users into loyalty members is key, and the Bank of America partnership could help.

Over the years, Starbucks has shifted from primarily selling hot drip coffee and espresso-based beverages to selling highly customizable cold beverages of all kinds. CMO Brady Brewer said that there is no trade-off in frequency between cold beverage customers and hot beverage customers. The young people apparently like their beverages cold, as they are drinking hot coffee every day, just as people of different generations were drinking hot coffee to start their day.

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