Starbucks gave customers a jolt Wednesday with plans to expand the availability of its coffee, and its loyalty program, outside its cafes.
Following a year of record sales — which hit $19.2 billion in 2015 — Starbucks executives outlined the company's strategy at its annual shareholders meeting in Seattle. Expect to see the coffee giant expand its presence outside of its cafes while giving customers more incentives to buy Starbucks products.
That includes the introduction of a Chase Visa prepaid rewards card at the end of the year. Customers will be able to use the card anywhere Visa is accepted and earn "stars" on every purchase, regardless of whether it's for Starbucks items. Details will come later on how stars will be rewarded for purchases made with the prepaid card, says company spokeswoman Linda Mills, who added that Starbucks is considering other possible debit or credit card partnerships.
The card is a follow-up to Starbucks' announcement last month that it would change its loyalty program to be based on dollars spent rather than number of visits, a move that upset customers who prefer to drink a regular cup o' Joe over its frillier, and more expensive, frappuccinos and other drinks.
But Starbucks says it hasn't felt the burn: More than 500,000 customers have signed up for the rewards program since the changes were announced, bringing total active members in the U.S. to more than 12 million.
And while customers are shopping with their new cards, they'll have more Starbucks products to choose from. Capitalizing on a trend that started brewing last year, the coffee company will also roll out single-serve bottles of cold brews — coffee that's brewed with cold or room temperature water — in retail stores this summer. That pits the brand against premium options from brands such as San Francisco's Blue Bottle Coffee Co. and Stumptown Coffee Roasters, that are sold in some coffee shops and retail stores.
"We had a significant uptake of cold brew as we introduced it into the stores," Starbucks Chief Operating Officer Kevin Johnson told USA TODAY in an interview ahead of the meeting. "We think the market for ready-to-drink beverages is going to sell very well."
The suggested retail price for a 9.5-ounce bottle is $3.29. A tall cold brew coffee — 12 ounces — in Starbucks cafes costs between $2.75 and $3.45.
Starbucks also is extending its partnership with Keurig Green Mountain, which has been struggling to keep up demand for its coffee machines and pods. Starbucks plans to launch latte K-cups in caramel, mocha and vanilla flavors and to expand its Keurig products outside of grocery into foodservice and restaurants. In the fall, customers will be able to make the cult favorite pumpkin spice latte at home with a seasonal version of the latte pods.
The lattes come with regular Starbucks coffee pods and packets of dried milk, sugar and natural flavors that are added to the mug before brewing the pod.
Follow Hadley Malcolm on Twitter @hadleypdxdc.
