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Starbucks Unveils New Drinks, Reports Weak Earnings

April 30th, 2008 @ 4:39 pm

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Tags: Beverage, Starbucks Corp., Earnings, Smoothie, Food & Beverage, Manufacturing, Dan Mitchell

Few foodservice outfits could introduce new products and get the kind of attention Starbucks is getting for its introduction, first reported by the Wall Street Journal, of a fresh-fruit smoothie and a “sweet, ice beverage” developed with the help of “an Italian company.”

Neither the names nor the prices of the drinks were revealed, nor was the identity of the Italian company. The new lines are part of Starbucks’ push into healthier beverages and non-coffee drinks, which the chain hopes will get more people into its stores. The company has struggled as the consumer economy has weakened. The timing of Wednesday’s Journal article may have been tied to Wednesday’s release of Starbucks’ second-quarter earnings, which were 28 percent below last year’s second quarter. As it released earnings, it also announced it would cut back its plans for new store openings in the United States through 2011 and concentrate more on offshore growth. Last week, the company said it was facing the worst economic climate in its history.

The new drinks, according to Douglas McIntyre of Bloggingstocks.com, “won’t save it.” The company “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.”

Au contraire, Starbucks’ vice president Rob Grady earlier told the Journal. The smoothie is “what we believe to be a huge differentiator” and consumers “cannot get [them] from any fast-food establishment.” But as McIntyre noted, you can get them at Baskin-Robbins and any number of other places

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Dan Mitchell

Dan Mitchell has spent the past 20 years writing and editing for newspapers, magazines, and Web publications. Currently, he writes the What's Online column for the Saturday business section of the New York Times. He has also written for the Chicago Tribune, the Minneapolis Star-Tribune, National Public Radio, Business 2.0, and Wired. more »

AboutFood Industry

BNET Food provides daily industry news coverage and insights for managers and executives, focusing on the major companies in the food and beverage sector, from manufacturers to retailers. In addition to detailed company profiles, we bring you critical analysis on new alliances and partnerships, new products, mergers and acquisitions, labor and cost management, investments and deal flow, and a host of other important business issues.

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