Starbucks puts coffee on tap
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Starbucks puts coffee on tap

Starbucks is looking to combat slowing U.S. sales growth and make headway in an increasingly saturated coffee market with a novel new product: coffee on tap. This new coffee will be cold – nitrogen-infused cold – and resemble a pint of Guinness rather than a cappuccino. The foamy, nonalcoholic drink is being rolled out in response to strong customer demand. The company is planning to bring the new type of caffeine hit to 1,400 locations by the end of this year. It’s available at less than 1,000 now.

Sandy Stark, senior vice president of U.S. beverage and global innovation said: “It creates a whole new experience for our customers. The opportunity is massive. Our plan is to be in as many stores as we possibly can. Our plan is to continue to expand.”

Starbucks is capitalizing on a solid trend towards chilled coffee beverages – since the company introduced cold-brew coffee nationwide in the summer of 2015, sales have increased 25% year-on-year.

This might be a powerful force in combatting slowing U.S. growth – last quarter Starbucks saw same-store sales rise by 3% after a 7% rise in the previous year. The company is introducing ‘nitro drinks’ abroad too, and bringing them into traditional coffee markets like Columbia. Taken in tandem with Starbucks focus on digital growth and daytime food, cold coffee might just be the company’s growth driver over the next few years.

Disclosure

Dominion holds Starbucks in its Global Trends Luxury Fund. 


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