After just recently announcing the closure of 600 stores in the U.S., coffee powerhouse Starbucks Corp. (NASDAQ: SBUX) will unveil protein smoothies and new iced beverages in some of its markets as early as next week. Starbucks hopes these protein drinks could help pump up sales and profits amid a downturn in its business due to the sluggish consumer economy in the U.S.When the company decided to drop its breakfast sandwich line because the offerings caused olfactory interference with its trademark roasted coffee smell, at least smoothies won't plug up customer nostrils, eh? Starbucks wants to find a replacement for the slow-selling Frappuccino line of ice-blended drinks in California and Florida. Together, those two states account for about a third of the chain's U.S. sales alone.
So, Starbucks is going after the non-coffee drinker with a premium-positioned product that most fast-food chains don't sell: the protein smoothie. Not that this is a dangerous move, but Starbucks is not the only one to sell smoothies these days. Jamba Juice (NASDAQ: JMBA) sells plenty of smoothies, and coffee competitor Dunkin' Donuts does as well. Starbucks will also offer a new cold-iced beverage that will be a low-calorie drink offered in fruit, dairy or yogurt-based flavors. However, with McDonald's Corp. (NYSE: MCD) also testing the smoothie offerings in some of its markets, Starbucks can't be given a pass here to these new products, certainly not as sort of overall savior for the company. If you're not a Starbucks fan, would you start going there just to purchase a smoothie?
Also see: Starbucks' Howard Schultz: Wake up, you're closing the wrong stores!
Walmart's New Health Food Push: Is It Too Hard to Swallow?
Bonds Are a 'Safe' Investment: A Big Lie Gets Even Bigger


Reader Comments (Page 1 of 2)
7-14-2008 @ 2:34PM
Brenda said...
Maybe their sales wouldn't be so "sluggish" if they didn't charge $5 dollars for a cup of coffee!
7-14-2008 @ 2:47PM
justathought said...
wow... isn't that what jamba juice (right next door to our local starbucks) and robek's do?
as said before, just drop the price...
7-14-2008 @ 3:08PM
INKIE said...
I AM ALSO IN A FINANCIAL CRUNCH BUT STARBUCKS IS A DAILY MEETING PLACE FOR BUSINESS/FRIENDS IN THE MORNING. SO TO SAVE MONEY I NO LONGER AM BUYING 2 VENTE LATTES BUT 2 VENTE ICE TEAS THUS CUTTING MY EXPENSES IN HALF AND STILL ENJOYING THE ATMOSPHERE.
7-14-2008 @ 3:50PM
Pat said...
I for one am looking forward to a low calorie yogurt drink. I watch what I eat and would love a low calorie option. The prices are way to high, but if it a protein smoothie, it is at least providing something other than empty calories.
I recently discovered the fat smash diet. I am presently still in phase 1 where you can have as much fruits and veggies as you want (other than avocado and white potatoes). I have lost weight and have broke some very bad sugar habits I had. I have lost 5 pounds so far and am feeling great. The website for more info on this diet is http://www.fatsmashdiet.com
I also walk all over the place. I am a mother of 3 very active boys under the age of 10 and going to the gym is out of the question. I wear smartsole anti-cellulite insoles which I put in my walking shoes or sneakers. They are super comfortable and they cause you to burn more calories with every step http://www.smartsole.com I think the combo of the fat smash diet and all my walking with my smartsoles are a great combo!
7-14-2008 @ 3:41PM
just me said...
jamba juice may charge 5 bux for a drink, but you're getting 32 oz of smoothie as compared to 20 oz of coffee. honestly the smoothies are healthier for you if you make them right.
7-14-2008 @ 4:58PM
ange said...
I still stick with my green tea; not only is it good for you and tastes good, it's one of the cheaper beverages on the menu. I'd kick my own ass if I spent five bucks on a frap every day. That's fifty bucks a week!
7-14-2008 @ 3:59PM
Liz said...
Starbucks is a wonderful place with a predictable shelf life. Within five years something new will have come along to take its place and perhaps inhabit its millions of empty store shells. That's life.
7-14-2008 @ 4:08PM
Mike said...
Yo Ange $5.00 per day is $35.00 per week.... at least where I live it is.
7-14-2008 @ 4:15PM
Bob Wong said...
Overpriced garbage. $5.00 coffee without a refill, give me a break!
7-14-2008 @ 4:49PM
Fred said...
Smoothies can be made at home for a dollar cost. Who's going to buy them at Starbucks for 5 bucks???
Moreover, Jamba Juice may be a serious competitor, it is also facing a downturn. As a matter of fact, it is in trouble too.
So it is clearly not the best example for Starbucks and as a result, not the best move from Starbucks.
SBUX, just reduce your price instead of getting into so much hassle!! The most successful businesses are the most simple ones.
So please make it SIMPLE: good coffee (note i do not ask for outstanding cup of joe) with various price range starting as low at $2.50. Maybe?
7-14-2008 @ 4:50PM
Sunny said...
Starbuck's is trying entirely too hard/.
They are old news.
7-14-2008 @ 5:01PM
mikeinlaca said...
What the heck are you folks asking for that costs 5 dollars? I get a "short" for a buck fifty which is about my limit before I start twitching from too much coffee. Even a "tall" is under two bucks so what's the bit about a cup of coffee for five????
7-14-2008 @ 5:14PM
CeeC said...
A coffee costs $1.55 the largest is $1.85..
if you want my mocha frappuccino its $3.50.. where you guys buying a $5.00 cup of coffee.
7-14-2008 @ 5:13PM
Mary said...
I agree with several of the people above. Starbucks' problem is not the quality of its products, it is the cost. In today's hyper-inflation, I am finding that I have no choice but to cut back on things I really like to do. Unfortunately, Starbucks is one of them. And I love Frappucinos.
7-14-2008 @ 5:17PM
Scott said...
For those that think the coffee is $5.00 a cup, obviously has never been in a Starbucks. A regular coffee is under two dollars and it isn't the junk you get at Wawa that sits on a burner for hours. They actually buy quality and brew it fresh every 30minutes. I'll pay the price. Sometimes, it's about quality, not quantity.
7-14-2008 @ 5:36PM
Eileen L. said...
Maybe if Starbucks' Frappuccino wasn't so darn sweet, I would've bought another one. But they are just awful. (Obviously, they are not selling well, so maybe other customers share my opinion.) Starbucks should take lessons from Coffee Bean & Tea Leaf -- they make the perfect Ice Blended -- not too sweet...just right! I'm not a Starbucks fan, and I would NOT go into the store just for a smoothie. I make my own at home. And it's just to my liking. But if I were to buy a smoothie, I would go to Jamba Juice, not Starbucks.
7-14-2008 @ 6:51PM
sagebaby said...
I will always remember my first experience at Starbucks in 1990 at Pike Place Market in Seattle. Well, at least I think that's where it was. It was down by the waterfront and it was my first trip to the west coast. The store smelled heavenly. I was in Seattle for a university project and I fell in love with everything about Seattle... Puget Sound, Pike Place, seals, and Starbucks. If I close my eyes, I can smell it. The coffee, not the seals. I would fork over $5.00 any day of the week to inhale. Though I go to Starbucks on the east coast, I always walk in hoping to smell that smell and I almost always do. It's intoxicating. It makes me glad I am human. It makes me glad I make more money now so I can treat myself. There is nothing like a starbucks. (INHALE) Ahhhhhhh. Bring it on, Dunkin'. You've got nothing but calories over them.
7-14-2008 @ 6:59PM
Karen said...
Please, if you have not been to Starbuck's, don't accuse them of selling $5 cups of coffee. Their brewed coffee costs about the same as a cup of coffee in a restaurant, $1.80, and that includes the tax. The main differences are, the coffee is always fresh and hot at Starbuck's, and you do not get a free refill.
7-14-2008 @ 7:34PM
undrgrndgirl said...
starbucks needs to go back to making good STRONG coffee...their coffee drinks used to be great...coffee being the major flavor with the syrup flavor in the background...now they pander to the coca-cola swilling multitudes - sweet syrupy drinks with a hint of coffee in the background...i often order my white chocolate mocha with one or even two extra shots of coffee so it tastes like it used to...
7-14-2008 @ 7:51PM
Lisa said...
I would drive 45 minutes anyday to the nearest WaWa I have been in a starbucks once (did a favor for my boss) Actually got a gift card for christmas and couldn't even give it away nobody wanted it.