The Starbucks menu of tomorrow will be a lot more extensive than what is currently sold at the coffee giant’s cafes.
On Wednesday, company executives unveiled a handful of new coffees, breakfast items, and soups that will be coming to the chain in 2017. The goal: continue to count on innovation to help fuel sales at Starbucks (SBUX), as it aims to post 10% annual revenue growth over the next five years.
Starbucks is planning to sell organic chicken and tomato soups regionally next year. It will also debut the company’s first gluten-free breakfast sandwich. Other new items coming to restaurants next year include a new drink called the cascara latte, small egg bites, and Teavana Craft Iced Tea. The Teavana item drew cheers from the crowd here at the company’s biennial investor day presentation in New York City.
“We have a foundation of innovation to build on,” said Global Chief Marketing Officer Sharon Rothstein. She claimed the pipeline of new items was more robust than ever.
The Teavana Craft Iced Tea launch, which features flavors like mango and peach, is especially notable as it will be an offering pushed by Starbucks partner Anheuser-Busch InBev—which earlier this year announced a deal to help the coffee giant tap the growing ready-to-drink tea market. The mandate has been to get Teavana brand in supermarkets and convenience stores by the first half of next year.
On the food side, innovation for breakfast in the form of the gluten-free sandwich and egg bites is important because Starbucks has made some major inroads in building the breakfast food business. That time of the day accounts for 40% of total food sales and breakfast sandwich sales alone have nearly doubled the past four years.
But lunch is important too. Because 50% of store traffic occurs after 11 A.M. Today, Starbucks knows that it has a greater opportunity to drive lunch item sales. New chicken and tomato soups can help on that front; though Starbucks will likely need to plan even more innovation if it wants to boost sales for that day part. As a reminder, only 19% of revenue comes from in-store foods vs 74% for beverages. So while food represents a great growth opportunity, it is still an under-penetrated business.
