From July 14, Starbucks customers will be able to order any drink from the Refresher line in a blended version, which is another step in the implementation of the beverage platform development strategy, which the company estimates at $2 billion.
The new product comes after the April introduction of personalized Energy Refreshers, which – as company representatives recently reported – exceeded expectations and helped generate new purchasing opportunities.
Refreshers, i.e. frozen drinks based on juices and tea, often with pieces of fruit, have become one of Starbucks' largest beverage categories since their debut in 2012. They help drive traffic in the afternoon as the company tries to move beyond its traditional focus on morning coffee.
“The success of Refreshers reflects an evolution in the way customers engage with Starbucks offerings – a growing preference for cold, personalized beverages alongside our core coffee products.” Dana Pellicano, senior vice president of global product experience at Starbucks, told Business Insider.
The company highlights that Refreshers are helping to drive growth in afternoon visits – an area that Starbucks is increasingly focusing on as it looks for new sources of traffic. The key factor in the success of this platform is the possibility of personalization.
This strategy is part of a broader change taking place in the restaurant industry, where chains are competing not only with each other, but also with producers of energy drinks, functional drinks and social media-driven trends to attract the attention and spending of younger consumers.
“Restaurant chains are no longer competing just for coffee deals — they are also competing with brands of energy drinks, bottled teas, functional waters and custom soda concepts for the broader 'cold, caffeinated, customizable treat' category,” said Noah Pozin, food, agriculture and beverage industry consultant at Truist.
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Chasing the tastes of younger consumers
The Dutch Bros chain has expanded its offer of energy drinks, which, according to its authorities, now constitute approximately 25 percent of business. The concepts of personalized carbonated drinks are also gaining popularity, and brands such as McDonald's and Taco Bell are investing heavily in the development of cold drinks. JPMorgan and KeyBanc analysts point to a growing wave of innovation at both Starbucks and Dutch Bros. as the companies fight for share of the personalized, functional beverage market.
Behind this trend is a change in the approach of younger consumers.
Starbucks competitor Dutch Bros. says personalized energy drinks such as Myst Energy Refreshers now account for about 25%. company turnover
“Gen Z and millennials see beverages as a form of expression, social media content, functional energy source and affordable pleasure.” – says Pozin.
Amid persistent inflation, housing affordability issues, and general economic uncertainty, beverages have become a relatively accessible luxury. Consumers increasingly want to experiment, personalize and discover new products without having to incur large expenses.
This trend makes beverages a particularly attractive segment for food service operators. They typically generate higher margins than many food products and can increase the frequency of customer visits throughout the day, becoming an increasingly important source of revenue growth.
Social media has further accelerated this process.
“One of the biggest takeaways for us is how creative customers are with their Refreshers,” Pellicano said. “From the very beginning, we saw customers modifying basic drinks in their own way – such as replacing coconut milk, which led to the creation of Pink Drink, and adding new flavors, textures and colors.”
“What started as personalization quickly became a culture.” – she added.
Pellicano emphasized that social media has become a “real-time feedback loop and source of inspiration” for Starbucks, helping the company identify new beverage trends more quickly and scale them on a large scale.
With the introduction of blended Refreshers this summer — and more innovations already on the way — Starbucks is clearly signaling that its future growth won't rely solely on coffee.
The article is a translation from American edition of Business Insider
