SEATTLE -- Starbucks Coffee Co. chairman, president and CEO Howard Schultz and other company leaders detailed Starbucks' five-year strategic growth plan at its biennial Investor Day. The plan offers new formats, new day-parts, new mobile commerce initiatives, continued category solidification and more global expansion.
"The seismic shift in consumer behavior underway presents tremendous opportunity for businesses the world over that are prepared and positioned to seize it," Schultz said.
"Over the next five years, Starbucks will continue to lean into this new era by innovating in transformational ways across coffee, tea and retail, elevating our customer and partner experiences, continuing to extend our leadership position in digital and mobile technologies and unlocking new markets, channels and formats around the world," he said. "Investing in our coffee, our people and the communities we serve, will remain at our core as we continue to redefine the role and responsibility of a public company in today's disruptive global consumer, economic and retail environments."
1.New formats. Starbucks has opened the first Starbucks Reserve Roastery & Tasting Room, in Seattle. The 15,000-square foot-Starbucks Reserve is a brewery- or distillery-like interactive coffee and dining venue that "redefines delivery of an immersive brand experience."
The additional small-batch roasting capacity afforded by the new Roastery will enable Starbucks to expand availability of its super-premium, small-lot Starbucks Reserve Coffee to 1,500 locations globally, and to support the launch of the Starbucks Reserve brand and the opening of the first 100 dedicated Starbucks Reserve stores.
"We have designed a space that will heighten all the senses. This is a real-life Willy Wonka experience with coffee as the heart and soul, where customers will see coffee being moved through the roasting process right before their eyes," said Liz Muller, vice president of creative and global design. "We have opened up the world of sourcing, roasting and brewing so that our customers at any one point are only feet away from the theater and artistry in a sophisticated yet relaxed environment."
2. New day-parts. The company expects continued top- and bottom-line growth in its food platform as it elevates and expands its offering of savory, locally relevant food offerings around the world. It plans to double its U.S. food revenue to more than $4 billion over the next five years.
And by the end of 2019, 20% to 25% of Starbucks stores in the United States will offer the Starbucks Evenings experience, adding approximately $1 billion in revenue. The Starbucks Evenings menu is available at select locations every day from 4:00 p.m. to regular closing hours. The regular food and beverage menu will always be available, with the addition of savory small plates, beer and wine and desserts. The menu includes Chicken Sausage & Mushroom Flatbread, Artichoke & Goat Cheese Flatbread, Parmesan Crusted Chicken Skewers, Blue Brie & Apricot Preserves Plate, Grilled Vegetable Plate, Bacon-Wrapped Dates with Balsamic Glaze, Truffle Macaroni & Cheese.
Click here to view the full Starbucks Evenings menu.
The expansion of Starbucks Evenings, Starbucks Reserve stores, micro- and express-store formats, new drive-thrus and mobile trucks are just a few of the innovations customers will see beginning in 2015.
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3. New mobile commerce initiatives. With more than eight million loyalty members, seven million mobile payment transactions each week and more than $4 billion loaded onto prepaid Starbucks Cards in North America in the past year, Starbucks offers the largest mobile ecosystem of any retailer in the world.
Starbucks has launched Mobile Order & Pay and plans for food and beverage delivery. Mobile Order & Pay will allow customers to place orders in advance of their visit, to pay for and to pick up their ready order at their preferred Starbucks store.
The national rollout of Mobile Order & Pay will lay the foundation for Starbucks launch of food and beverage delivery in select metropolitan areas later in the year.
By 2016, the company will create a mobile payment network with retailers beyond Starbucks. This platform, in which customers would earn Stars by using a stored-value account, would create opportunities for other retailers to reward their most loyal customers, also benefiting Starbucks by creating incremental traffic opportunities.
4.Continued category solidification. Building on its acquisition of Teavana, Starbucks is reinventing the $109 billion global tea category. It will continue to expand and to bring its super-premium loose leaf teas, handcrafted beverages and exclusive food offerings to carefully targeted markets worldwide. Teavana will also continue to grow its presence in Starbucks retail stores.
5.More global expansion. Starbucks has announced plans to double its store count in China to more than 3,000 stores by 2019. And when completed in second-quarter 2015, the acquisition of Starbucks Japan--the company's first international market outside of North America and with more than 1,000 stores its second largest market overall in retail store sales--will position Starbucks to further accelerate growth in the region.
"Starbucks business, operations and growth trajectory around the world have never been stronger, and we are more confident than ever in our ability to continue to drive significant growth," said Troy Alstead, COO. "We have more customers visiting more stores more frequently, both in the U.S. and around the world, than at any time in our history. And we expect both the number of customers visiting our stores and the amount they spend with us to accelerate in the years ahead. With a robust pipeline of mobile commerce innovations that will drive transactions and unprecedented speed of service, Starbucks is ushering in a new era of customer convenience. We believe the runway of opportunity for Starbucks inside and outside of our stores is both vast and unmatched by any other retailer on the planet."
Seattle-based Starbucks Coffee Co. operates approximately 7,000 U.S. company-operated retail coffeehouses.
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