During Starbucks’ first quarter earnings call — besides addressing the company’s sluggish quarterly results — CEO Laxman Narasimhan made several company announcements, from new menu items, to external partnerships. Here are five key takeaways from the Seattle-based coffee giant’s earnings call for the first quarter ended Dec. 31, 2023.
Starbucks is partnering with Gopuff for late-night and overnight deliveries
Starbucks is targeting the late-night demographic, as several of its industry colleagues were already doing over the past year. Narasimhan announced Tuesday a partnership with delivery startup Gopuff to tap into the late-night and overnight dayparts. Starbucks is conducting a pilot with Gopuff to coordinate delivery orders between 5 p.m. and 5 a.m.
“We saw record results in a U.S. delivery business with growth of nearly 80% year over year aided by our expanded partnership with DoorDash,” Narasimhan said. “We see significant growth for continued incremental growth as delivery represents only 2% of our transactions…. In this pilot, [with Gopuff], Starbucks trained baristas to prepare handcrafted Starbucks drinks and food inside Gopuff’s micro-fulfillment centers, delivering to the customers door in about 30 minutes.”
Bank of America is Starbucks Rewards’ second external partner
A year after announcing a partnership with Delta through Starbucks’ Reward Together program — which allows customers to earn Starbucks points through external partnerships and vice versa — Reward Together has its second partnership: Bank of America.
“This opportunity builds the great success of our partnership with Delta Airlines that has deepened connection and engagement with our members and is one of two new Starbucks Rewards partnerships,” Narasimhan said in a statement, adding that a third partnership will be announced later this year.
Two new beverages are being introduced for Valentine’s Day
Starbucks is also not pumping the brakes on menu innovation and will be rolling out two new beverages, “just in time for Valentine’s Day” Narasimhan said. These drinks will be the Chocolate Covered Strawberry Creme Frappuccino and Chocolate Hazelnut Cookie Cold Brew, though he did not go into detail on specific ingredients in the drinks, or when exactly they will be added to the menu. Narasimhan also emphasized the importance of the company’s food platform and hinted that more food options will be coming to the menu soon, especially those that target the afternoon daypart to “tide over customers between lunch and dinner.”
Starbucks is introducing three new drinks platforms
Besides new drinks and food items, Starbucks is also adding three entirely new drinks platforms to its menu, “each of which is squarely aimed at our Gen Z and millennial customers across a range of coffee and cold beverages and compelling for the afternoon,” Narasimhan said, though no further details were available.
If we had to guess, these new platforms could include boba tea — which grew in popularity in 2023 — and/or energy and protein drinks, which would be Starbucks’ answer to the growing popularity of Dutch Bros — a chain that is known for its energy drinks.
Starbucks maintains that it has not committed union-busting
Beyond new menu and partnership announcements, Narasimhan doubled down on Starbucks’ union position, maintaining that as per a recent independent audit, the company did not partake in union-busting, emphasizing that the company has not and will not be treating unionized employees differently, addressing a previous accusation against Starbucks.
“I want to be clear in my view on the matter of unionization at Starbucks,” he said. “We believe in a direct relationship with our partners, and in the 4% of our stores in the US where our partners have chosen to be represented by a union, we are committed to finding a constructive path forward with those unions…. Our partners remain core to the success of our business, and I am proud to be restitching the fabric of the green apron for all partners.”
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