Starbucks jolts the coffee market with its biggest product launch in years
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Starbucks Corporation (NASDAQ:SBUX) inched higher in Wednesday afternoon trading with new details out on the Oleato line of coffee products.
The new drinks, which are infused with Partanna extra virgin olive oil, will be available at Starbucks Reserve Roastery Milan and in Starbucks stores in Italy. The Italy launch will be followed by locations in Southern California having Oleato this spring. Later this year, select markets in Japan, the Middle East, and the United Kingdom will launch the beverages.
For starters, the five Oleato beverages served at the Milan Roastery are Oleato CaffÃ© Latte, Oleato Iced Cortado, Oleato Golden Foam Cold Brew, Oleato Deconstructed and Oleato Golden Foam Espresso Martini. Starbucks stores in Italy will offer Oleato CaffÃ¨ Latte, Oleato Iced Shaken Espresso and Oleato Golden Foam Cold Brew.
Oleato coffee is the inspiration of Howard Schultz, who made the connection between olive oil and coffee while on a trip to Italy. "I was absolutely stunned at the unique flavor and texture created when the Partanna extra virgin olive oil was infused into Starbucks coffee," said Schultz. The confluence of the coffee (hot or cold) and olive oil was described as an unexpected, velvety, buttery flavor that enhanced the coffee and lingers beautifully on the palate.
Schultz called Oleato one of the biggest launches the Seattle-based company has launched in decades. He differentiated that Oleato is a platform, rather than a flavor or a product. While there are no packaged goods plans for Oleato just yet, a powerhouse launch and strong customer reaction could add some incremental pressure on J.M. Smucker (SJM), McDonald's (MCD), Costa Coffee (KO), Tim Hortons (QSR), Nestle (OTCPK:NSRGY), Keurig Dr Pepper (KDP), Dutch Bros, (BROS), Kraft Heinz (KHC), Krispy Kreme (DNUT), Caribou Coffee, Peet's, and Dunkin' Donuts.
On Wall Street, Bank of America reminded that the U.S. business for Starbucks (SBUX) is still the backbone with it accounting for 80% of EBITDA.
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