Starbucks is cutting complicated drinks that baristas hate, and analysts are celebrating
- Starbucks plans to avoid limited-time beverage offerings that complicate operations and make workers' jobs harder, according to a new Cowen note.
- The coffee giant announced in April 2018 it would cut back on its limited-time offerings by 30%.
- Certain complicated limited-time offerings, such as the infamous Unicorn Frappuccino, infuriate baristas, as they take more time to make, slow down service, and can create bottlenecks.
- Starbucks will instead focus on introducing new types of drinks, such as its growing cold brew platform.
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Starbucks investors and baristas, rejoice - the coffee giant is cutting back on complicated limited-time offerings.On Monday, Cowen said in a note that it expects Starbucks' comparable sales in the US to grow by 5% in the fourth quarter, above consensus expectations of 4.4%. According to Cowen's Andrew Charles, analysts walked away from a meeting with Starbucks' chief financial officer Pat Grismer and director of investor relations Durga Doraisamy with a "greater appreciation of Starbucks' growth at scale playbook." Advertisement
Charles applauded Starbucks' work with cold drinks, such as the rollout of Nitro Cold Brew and debut of a Pumpkin Cream Cold Brew alongside the classic Pumpkin Spice Latte.
Starbucks representative Reggie Borges told Business Insider that the chain isn't cutting limited-time offerings altogether. Instead, the chain is working to be more disciplined about the types of limited-time offerings that hit menus.Certain complicated limited-time offerings have long infuriated baristas at Starbucks. In particular, Instagram-ready Frappuccinos, such as the infamous Unicorn Frappuccino, slow down service and can cause bottlenecks, annoying both employees and customers.In April 2018, Starbucks announced it would cut back on its limited-time offerings by 30%. Recently, the company has been emphasizing simplicity more broadly - a strategic shift that Cowen's Charles dubs the "New Mean and Lean Green Siren."Advertisement
New equipment and tech help employees spend less time on administrative tasks and speed up service. Plus, streamlined operations - tied to selling, refranchising, and closing certain locations - allows Starbucks to cut costs and reinvest in innovation and workers' benefits.
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