Starbucks executives had their Q4 earnings phone call with investors last Thursday, and, as expected, it was a rootin’ and tootin’ good time! There were plenty of thrilling new developments to get a Starbucks fangirl like myself all sorts of twitterpated, so brace yourselves for some serious excitement.
Starbucks’ Q4 sales were 25% higher than the company was expecting, which is very nice for Starbucks! Much of this can be chalked up to increased business via drive-thru and mobile ordering, which has shown that customers are pivoting from single to group orders. Group orders can also be thanked for increased sales of pricier cold drinks, and for upsizing, as customers are now more likely to get their refreshing beverages in venti or trenta sizes.
Speaking of cold drinks: Frappuccino sales are up from last year, and sales of Starbucks Refreshers and cold brew coffee showed double-digit growth in Q4 alone. What will happen now that that we’re officially in warm beverage season? Who knows! It’s 2020, baby, and anything goes!
With people pooling their resources for Starbucks runs, it makes sense that they’re starting to add food items to those group orders, rather sending anyone out to make multiple stops. For those working from home, those early morning coffee orders have shifted to mid-morning, when pre-lunch peckishness settles in. In general, it seems that routines are changing for good, but coffee will always be an important part of those routines, no matter what form it takes.
Pumpkin Spice Latte season came earlier this year than ever before, which worked out great for the company’s Q4 results. In a shocking development, Pumpkin Cream Cold Brew, which was only introduced in 2019, outsold the Pumpkin Spice Latte this year. Now that the weather has gotten quite nippy there’s a chance for the PSL to make a major comeback and show everyone who’s boss, but with the impending climate apocalypse bringing higher fall temperatures, could this be the beginning of the end for cozy-sweater season and its official beverage?
In one quarter (three months, for those of you too tired to do the math), sales of alternative milks at Starbucks doubled. That’s bananas! Or rather, that’s coconuts, because Starbucks has yet to put banana milk on its menu. Currently the options are limited to soy, almond, coconut, and oat milks, and I’d hazard a guess that we’ll be seeing many more specialty drinks built off these dairy alternatives in 2021.
We’ve written quite a bit on the restaurant industry’s infatuation with apps here at The Takeout, and we’ll definitely be doing a hell of a lot more of it in the future. Starbucks has been leaning heavily on machine learning and A.I. to gain detailed insights on consumer behavior, and its mobile app is a treasure trove of personal data that customers are freely volunteering in exchange for free drinks. Compared to 2019’s Q4, the total number of Starbucks rewards members has grown by a whopping 175%.
Like every other company on earth, Starbucks needed to radically slow its expansion plans thanks to coronavirus, and though there has been a smattering of store closures, globally the company opened 1,400 new locations in 2020. In 2021, Starbucks plans to open 1,100 net new stores globally; in America, 800 underperforming locations will be closing, and 850 brand spankin’ new Starbucks will be opening in places where they’ll actually be appreciated.
We first wrote about Starbucks’ plans for mobile-pickup-only stores in November 2019—a solid four months before life became a cataclysmic shitshow. Now, in the after-times, 75% of Starbucks’ Q4 sales volume was drive-thru and mobile orders. This was down from 90% in Q3, when in-store seating was still shut down, but even after the reintroduction of sit-down service, those numbers are significantly higher than they were pre-COVID.
There is so much to unpack about Starbucks China that there is no way I could do it justice in one article. (If “That Guy” wants to explain it to the class in the comments section, be my guest!) Generally, though, if you want to know what the future of Starbucks looks like, keep an eye on whatever they’re doing in China, particularly the “digital footprint.” Starbucks’ American identity has long been referred to as “the Third Place”—a home-away-from-home where the entire community can gather. In China (where the company added 260 stores in Q4, bringing the national total to 4,700), the local team developed a new retail format that underlines convenience. Called “Starbucks Now,” it’s very similar to the aforementioned mobile-only concept here in North America and has already been implemented in 98% of Starbucks’ China locations.
Delivery is also a big push in the Chinese market. In the earnings call, president and CEO Kevin Johnson said that Starbucks now “sit(s) across all of Alibaba’s platforms as well as the WeChat platform for delivery, and as part of that, we just introduced social gifting for delivery on the WeChat platforms.” In the future, the lines between Starbucks and real life will be blurred. We shall, at all times, be living inside Starbucks, because it, at all times, is living inside of us.