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Starbucks' (SBUX) new drinks won't save it

Starbucks (NASDAQ: SBUX) plans to come out with new premium drinks this summer. One will be a fruit smoothie and another a sugar-based drink created by a company in Italy. According to The Wall Street Journal, "Starbucks says they're the first stage of a broader push into healthier drink and food offerings."

The new products are not likely to help the coffee retailer much. Smoothies and Italian ice drinks are available at a large number of shops, even Baskin Robbins. Starbucks does nothing to differentiate itself by coming to market with products that are easy to come by elsewhere. It is also a move away from its core coffee franchise.

The other issue with the new drinks is that Starbucks stores already sell scores of items. When custom ingredients are put together with the regular drink menu, most stores offer dozens of drinks. The stores also sell ground coffee and coffee makers. Add to that donuts, muffins and other food. Starbucks will also sell anyone who comes through the door music and DVDs.

Those new drinks are not likely to stand out.

Douglas A. McIntyre is an editor at 247wallst.com an author of the Ten Stocks Under $10 Newsletter.

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Last updated: July 09, 2008: 08:34 AM

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