Issue #36: The New Starbucks

Good afternoon! Coming to you early from the mountains of Colorado with a slightly abbreviated version due to the Super Bowl tonight and spending as much time on the mountains skiing as I can. As for the big game tonight, I have to stick with my Philly roots - Let’s Go Birds 🦅🦅🦅!!!

Two weeks ago, during the Buffalo Bills heartbreaking loss to the Kansas City Chiefs, Starbucks debuted its new messaging under CEO Brian Niccol, its new CEO. For those unaware of the transition, here is more on it from all the way back inIssue #13. Long story short, on the outs was the CEO with a CPG background, replaced by Niccol who started Chipotle to its latest heights and was CMO and then eventually CEO at Taco Bell. He took over in August, and changes have been trickled out, but given the size of the company it was going to take time to implement.

With this ad, the surrounding press, the recent earnings calls, and changes in operations, the Brian Niccol era has officially begun. If you haven’t yet, take the 30 seconds to watch it, I highly recommend it. Set to The Ting Tings, “That's Not My Name”, it depicts a customer entering Starbucks and all the changes that are happen. Here are some of the highlights:

• Starbucks is now “The Starbucks Coffee Company” - unlike Dunkin which wanted to be broader and drop the “Donuts”, Starbucks wants to focus on what it does best

• Handwriting is back - not names, which will still be printed on a sticker, but instead motivating messages are adorning the cup (that are pre-written in bulk)

Plus, these are just some of the many changes that were rolled out in January, accompanying this ad. There are now free refills of hot coffee, iced coffee, hot tea, and iced tea served in ceramic mugs or personal cups for customers who have their beverages in the store. The condiment bar returns, so people can add their own sugar. By the end of 2025, the menu will be rationalized by 30% (just like I covered how Chili’s had success doing in Issue #35). Finally, there is no longer an open-door policy, you must be a customer to use the restroom. These changes may seem a little broad, but to me I think this is really interesting. None of these changes are revolutionary, it is just a combination of taking Starbucks back to its roots with the features and a smattering of features you would find in your local independent coffee store. Starbucks doesn’t need to surpass that, it is too hard to scale this level of hospitality in the scale of Starbucks. However, I think it can go a long way to bolster Starbucks’s standing. It will be interesting to see given how much Starbucks has to catch up, but I am certainly excited to follow along.

• Summary: Started by 3 friends as something to do in college in between summers, the food truck has blossomed into a multi-unit chain in northern NH and southern Maine. The menu features sandwiches, grilled cheese, soups, and salads. Great place to warm up after a long day skiing.

• My Take: The branding is excellent, plus the concept is very interesting. Already having scaled to multiple locations, without having much density, it will be interesting to see how they approach growing the density of locations to reduce costs without too much overlap.

• Founder(s): Bryce Harrison

• Funding: No disclosed funding

• Number of Locations: 5 Locations in Maine and New Hampshire

• Social Media Following: 14k on Instagram

Additional Links:

1. The new spot to have a birthday party is Sephora (read more here)

2. Older generations are less likely to purchase something online if they have to pay a delivery fee (see more here)

3. Check out Reggi, a new tool to help you decide what restaurant to eat at (read more here)

4. Kraft Heinz partners with Mustard, Kendrick Lamar’s producer, to launch a custom Mustard (read more here)

5. Starbucks is re-doing its order fulfillment prioritization logic as it tries to recover from a bad earnings (read more here)

6. CVS launches app to help unlock the locked merchandise - this will be interesting (read more here)

7. Foot Locker is focusing on empowering its retail associates to make the in-store experience better (read more here)

8. Bed Bath & Beyond buys BuyBuyBaby back (read more here)

9. Chewy is the top online site according to over 40,000 customers surveyed; but overall online satisfaction drops (read more here)

10. Walmart Canada is investing in Supply Chain and Stores (read more here)

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