Starbucks’ cold beverages are massively outselling hot coffee in the US
Iced coffee drinks are a hit at Starbucks (SBUX) outlets around the country, with cold drinks outselling hot drinks by a wide margin. Cold beverages accounted for 74 percent of total domestic beverage sales in the fiscal third quarter ended June 27, a new high and a ten-point increase over the previous two years.
On the earnings call with analysts on Tuesday evening, CEO Kevin Johnson said, “We continue to see strong demand for Starbucks Cold Brew, Nitro Cold Brew, and Starbucks Refresher beverages, while iced shaken espresso alone contributed more than a third of the iced espresso growth in the quarter.”
According to Yahoo Finance’s tally, the term “cold” was spoken 24 times on that call, while “hot” was referenced twice. On the call, “cold” was referenced almost as much as “coffee.”
The younger client group prefers the cold beverages, which are often ticket and margin accretive.
“I tell ya, customers love those,” Johnson said in an interview with Yahoo Finance Live on Wednesday. “Especially the millennial and Gen Z cohorts, they really enjoy those cold beverages.”
“So that’s a significant part of what’s driving growth in terms of the platform,” he continued, “is the fact that we have these customised, handcrafted beverages, both hot and cold, that people love.”