Prime Highlights:
- Starbucks is expanding its health-focused menu by testing Coco Matcha and Coco Cold Brew drinks in over 400 U.S. stores starting August 21.
- The new beverages are part of the company’s long-term plan to boost wellness-driven innovation and attract younger customers.
Key Facts:
- Cold foam, one of Starbucks’ most popular drink add-ons, grew 23% year over year, and the company will launch a protein version later this year.
- The top 500 U.S. restaurant chains have increased beverage options by more than 9% in the past year, with specialty and cold drinks leading the growth.
Key Background:
Starbucks is growing its presence in the health and wellness market by testing more coconut water-based drinks. From August 21, the company will introduce its Coco Matcha and Coco Cold Brew drinks in more than 400 stores across the U.S. markets. The expansion covers major cities like New York, Los Angeles, and Chicago, along with several Midwest locations, including St. Louis, Springfield, South Bend, Madison, and Milwaukee.
The drinks combine coconut water with either matcha or cold brew foam, creating lighter and functional alternatives for health-conscious customers. Starbucks first introduced these beverages in New York City as part of its “Starting Five” innovation program, which tests new ideas in a handful of stores before scaling up based on feedback from baristas and customers.
Dana Pellicano, senior vice president of Starbucks’ global product experience, highlighted the company’s broader vision in a statement. Health and wellness have always been a core focus for Starbucks rather than a passing trend. The rollout of Coco Matcha and Coco Cold Brew across more stores marks an important step in advancing the company’s beverage innovation strategy, with an emphasis on wellness-driven choices.
One of the most newly popularly used modifiers is cold foam, and the usage of this modifier has increased by 23 percent as compared to last year, says CEO Brian Niccol. The company also has plans to introduce protein cold foam later in 2019 that will provide its customers with 15 grams of protein and no added sugar in their cold drinks.
Industry data support this strategy. Technomic research shows an increase of over 9 percent in the past year in terms of beverages offered in the top 500 chains, with the specialty coffees and energy drinks leading the pack as the hot drinks declined. Generation Z and millennials are initiating the trend toward enabling consumers to personalize cold and functional beverages.
The expanded test comes as part of Starbucks’ broader “Back to Starbucks” turnaround plan, which includes cafe renovations, menu innovation, and a renewed focus on customer experience. While U.S. sales recently outperformed Wall Street expectations, they still dipped 2% compared to the prior year. Starbucks is betting that innovation and enhanced in-store experiences will help regain momentum.
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