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Starbucks Freshens Menu With Cold-Pressed Espresso Shot

Zacks Equity Research

In a bid to gain edge in the competitive cold coffee market, Starbucks Corporation SBUX has come up with a new cold-pressed espresso.

The Seattle-based coffee chain giant has developed a technology, Aqua Tamp, for making a shot of cold-pressed espresso. This reflects the company’s endeavors toward bringing in technological innovation to strengthen its brand, improve efficiency and in-store execution, and boost profits.

The cold-pressed espresso beverages will debut at the premium Starbucks Reserve Roastery in Seattle. The cold-pressed espresso menu at the Seattle Roastery will include a Sparkling Cold-Pressed Americano, Cold-Pressed Americano Exploration Flight as well as Cold-Pressed Ginger Fizz.

Starbucks has been strengthening its portfolio with innovation in beverages and core food offerings. Beverage innovation has been a significant contributor to comps for Starbucks over the years. Specifically, Starbucks has been focused on iced beverages in recent times to cash in on the growing iced coffee consumption. According to Starbucks and the market intelligence firm Mintel, iced coffee consumption has grown 75% over the past decade.

Earlier this year, Starbucks launched Teavana Shaken Iced Tea Infusions apart from adding the Nitro brew last year.

As revealed earlier, the company expects to quadruple its Cold Brew business by 2021. The company intends to boost its cold beverage mix to nearly 50% by 2021 from 35% in 2013. The company’s cold brew sales have also risen sharply in recent years, growing 338.9% from 2010 through 2015.

Starbucks Corporation Price


Starbucks Corporation Price | Starbucks Corporation Quote

Meanwhile, McDonald's Corporation MCD recently expanded its McCafé line of beverages. Also, the company recently inked a deal with The Coca-Cola Company KO to bring a line of ready-to-drink McCafe Frappe beverages to groceries across the United States in early 2018.

Again, with the demand for coffee expected to grow further, Dunkin Donuts’ of Dunkin' Brands Group, Inc. DNKN is continuously adding coffees to the menu, both in the value and premium segments, like the Macchiato's line of products and the most recent Cold Brew coffee. On an incremental sales basis, cold brew has been the most successful product launch this century, helping drive the brand’s coffee credibility.

With its refined new beverages, Starbucks aims to capitalize on the growing coffee culture among customers and meet the changing needs in terms of taste, convenience and value. This will help this Zacks Rank #4 (Sell) company to somewhat counter its tepid comps in the United States, thanks to soft retail and consumer spending environment.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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