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Starbucks (SBUX) catering to kids?

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"Duh, [this Italian roast] might stunt my growth. I wanna be 5'10" like Cindy Crawford." -- Alicia Silverstone as Cher Horowitz, Clueless (1995)

The world's medical experts have never really suggested that coffee, with its high caffeine levels and its tendency to be laced with sugar and fatty milk products, is a good beverage for the still-growing population. But kids today are a growing consumer sect, so what's a java-centric shop like Starbucks (NASDAQ: SBUX) to do? Consider offering "alternative beverages" to the under-13 bunch.

A recent MSNBC article notes that while Starbucks has traditionally maintained that it doesn't market its products to children, some locations are revising their stance. Brandon Borman, a spokesman for the Seattle-based firm, told MSNBC that while there will not be specific campaigns aimed at children, there are talks about adding child-friendly beverages to the existing menus. "We need to be realistic about who comes into our stores," Bormon noted, "we want to make sure that we have products that are appropriate to that age group."

One option would simply be a smaller-sized version of its hot chocolate - which now comes in a 12-ounce ("tall") size or bigger. SBUX is also contemplating how to keep some of its merchandise that appeals to kids - such as candy and stuffed animals - out of the reach of ankle-biters.

Critics argue that caffeine isn't necessarily the biggest problem - also at issue is the caloric intake of sweet delicacies such as the milkshake-like Frappuccinos, some varieties of which contain many more calories than soda, and almost as many as a fast-food hamburger. But there are plenty of parents addicted to the sweet nectar available only at the ubiquitous chain, and they're not exactly going to leave their kids in the parking lot when they run in to get their fix. At least the smaller sizes being proposed will help combat the calorie problem.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

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Last updated: July 06, 2009: 10:08 AM

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