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Will Starbucks Shareholders Prefer ‘Blonde’?

Lighter roast to tap into a new niche


Starbucks (NYSE:SBUX) announced Tuesday it will begin serving Starbucks Blonde Roast in the U.S., a lighter roast than its regular dark and medium roasts in an effort to attract more customers. The move is aimed at offsetting recent gains by competitors and higher coffee prices. While SBUX was a Wall Street darling last year, its more than 30% return in 2011 is unsustainable unless it can tap into a new niche.

Says Jeff Hansberry, president of Channel Development for Starbucks, “Starbucks Blonde Roast is our answer to providing a premium, lighter roast coffee to appeal to those that describe Starbucks signature roast as too intense.”

But, do customers actually want a less intense cup of Starbucks coffee? As it turns out, they do. In a study performed in 2010, 54 million coffee drinkers in the U.S. said they prefer a lighter roast coffee.

The java junkies have spoken and Hansberry and company have obliged. The new brewed and packaged Starbucks Blonde Roast is now available in all Starbucks locations nation-wide. This also includes grocery stores, where Hansberry says, “This new roast profile will allow us to increase our share of the brewed coffee market…where a majority of coffee sales are in the light and medium roast categories. This segment of the market represents a $1 billion opportunity for the company in the U.S. alone.”

The entirety of Starbucks Blonde Roast offerings includes:

  • Starbucks Veranda Blend  — a brewed option in U.S. stores
  • Starbucks Blonde Roast — a whole bean option in U.S. and Canadian stores
  • Starbucks Blonde Roast — a whole bean and ground coffee in U.S. grocery stores
  • Starbucks VIA Veranda Blend — in U.S. and Canadian stores
  • Starbucks Veranda Blend K-Cup Packs — in U.S. grocery stores
  • Starbucks Veranda Blend  — a brewed option in Canadian stores in February

A full report from Business Wire can be found here.

Article printed from InvestorPlace Media,

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