Tall order as Starbucks fills more niches,
Starbucks gave customers a jolt Wednesday with plans to expand the availability of its coffee and loyalty program outside its cafes.
Following a year of record sales — which hit $19.2 billion in 2015 — Starbucks executives outlined the company’s strategy at its annual shareholders meeting in Seattle. Expect to see the coffee giant expand its presence while giving customers more incentives to buy Starbucks products.
That includes the introduction of a Chase Visa prepaid rewards card at year’s end. Customers will be able to use the card anywhere Visa is accepted and earn “stars” on each purchase, regardless of whether it’s a Starbucks item.
The card is a follow-up to Starbucks’ announcement last month that it would change its loyalty program to be based on dollars spent rather than number of visits, a move that upset customers who prefer to drink a regular cup o’ Joe over a frillier, costlier frappuccino or other drink.
Starbucks says it hasn’t felt the burn: More than 500,000 customers have signed up for the rewards program since the changes were announced, bringing total active members in the U.S. to more than 12 million.
And while customers are shopping with their new cards, they’ll have more Starbucks products to choose from. Capitalizing on a trend that started brewing last year, the coffee company will roll out single-serve bottles of cold brews — coffee that’s brewed with cold or room-temperature water — in retail stores this summer. That pits the brand against premium options from brands such as San Francisco’s Blue Bottle Coffee Co. and Stumptown Coffee Roasters, which are sold in some coffee shops and retail stores.
“We had a significant uptake of cold brew as we introduced it into the stores,” Starbucks Chief Operating Officer Kevin Johnson told USA TODAY ahead of the meeting. “We think the market for ready-to-drink beverages is going to sell very well.”
The suggested retail price for a 9.5-ounce bottle is $3.29. A tall cold brew coffee — 12 ounces — in Starbucks cafes costs $2.75-$3.45.
Starbucks also is extending its partnership with Keurig Green Mountain. Starbucks plans to launch latte K-cups in caramel, mocha and vanilla and to expand its Keurig products outside of grocery and into restaurants.