Photo by Jewel Samad, AFP / Getty Images.
The coffee kingpin, which has been carefully but methodically evolving beyond coffee over the past several years, is quietly testing handcrafted soft-drink products - spiced root beer, ginger ale and a lemon ale - in some stores in the Atlanta and Austin markets.
The fizzy drinks, made by baristas with special carbonation machines, are sold at Starbucks prices. In some Atlanta locations, for example, a tall goes for $2.45 while the venti fetches $3.45.
The move comes at a time Starbucks has its hands in a torrent of non-coffee activity - from teas to juices to energy drinks to improved pastries - as it tries to evolve into a multifaceted brand that's as familiar at the grocery store as in the Starbucks store. Some information on the most recent soft-drink test has been reported in The Wall Street Journal, Nation's Restaurant News and the unaffiliated StarbucksMelody.com blog. But Starbucks executives are mostly mum.
"We test products to help us understand how new product extensions can fit within our customers' daily routine - throughout the day," says Starbucks spokeswoman Lisa Passe.
She said it's too soon to know if the drinks will move beyond the few cities in which they're now being tested.
The test began at a few locations in Seattle in mid-April, according to a recent report from Wall Street analyst Mark Kalinowski of Janney Capital Markets. In the report, Kalinowski said, "the odds favor" a national rollout, as early as 2014.
"While not everything Starbucks tests eventually makes it to a national rollout, we are pleased to see that the company isn't resting on its laurels."
Since CEO Howard Schultz returned to the helm in 2008 - when Starbucks' sales suffered during the financial downturn - the chain has gone through a virtual metamorphosis. Now, Schultz, who oversees 18,000 Starbucks stores worldwide, including 11,000 in the U.S., is eager to evolve Starbucks beyond the walls of its stores to a brand that's equally obtainable in the supermarket.
By testing a soft drink, the chain finds itself dabbling in the $77 billion carbonated beverage category, which - while on an eight-year decline - is the single biggest beverage category in the U.S., says John Sicher, editor of Beverage Digest, a trade magazine.
"Starbucks is a smart company and smart to test these products," says Sicher. "This may help bring in customers who want something other than coffee, especially at some part of the day when many consumers don't drink coffee."
Even then, Sicher says, Coke and Pepsi can rest easy. "I don't see their soft-drink dominance under threat from Starbucks."
But brand guru Robert Passikoff, founder of Brand Keys, has serious doubts.
"The upside is, it turns out to be something that everyone wants and Starbucks makes another ga-zillion dollars," he says. "But that's less likely than the downside. I'm not sure you've got lots of consumers who will want it."
Bruce Horovitz, USA TODAY
Gannett / USA Today