Starbucks Launches New Product! Starbucks Coffee Partners with PepsiCo to Introduce Energy Drinks

As everyone knows, besides the coffee served in their stores, Starbucks pays great attention to everything related to their brand. While Starbucks became famous for selling freshly ground coffee, it's actually their ready-to-drink coffee that can be stored at room temperature which sells best. (Fun fact: Since 1994, Starbucks has been the leader in the ready-to-drink coffee market, while Nestlé Coffee only launched ready-to-drink coffee later.)

They have a precise understanding of consumer tastes and needs, first launching canned black coffee, canned milk coffee, bottled flavored milk coffee, and bottled Frappuccinos. In recent years, as people have begun to focus more on health and Starbucks has also started emphasizing environmental protection, they have successively launched bottled almond milk coffee, soy milk coffee, coconut milk coffee, and oat milk coffee...

In addition to ready-to-drink coffee, Starbucks has also introduced caffeinated energy drinks for consumers who need caffeine but don't like drinking coffee. Yesterday, Starbucks announced that on March 1st, three fruit-flavored energy drinks—BAYA Energy—will be launched in major supermarkets across the Americas. This energy drink is jointly developed by Starbucks and PepsiCo, containing 90 calories, 90mg of vitamin C, and 160mg of caffeine per 12oz, making it a low-calorie, high-caffeine refreshing beverage.

Regarding a coffee company entering the energy drink business, Chanda Beppu, Vice President of Market Development for Starbucks Americas, explained: "We have been closely observing consumer consumption trends to determine what products to develop next. Recently, we have noticed steady growth in energy drink sales."

According to US market data: since the pandemic began, an increasing number of American consumers have started turning to energy drinks. In terms of the retail market, annual energy drink sales were around $15 billion in 2019, approximately $16 billion in 2020, and reached $18 billion in 2021.

Market Pressures and Strategic Shifts

The rapid increase in demand is due to various stresses generated during the pandemic, making consumers urgently need quick energy-boosting beverages. Unable to go out to buy freshly ground coffee, and with ready-to-drink coffee having low caffeine content (while being quite high in sugar, which can actually make people more tired), combined with more coffee brands entering the ready-to-drink coffee market with more competitive pricing, plus significant reductions in store revenue due to the pandemic and other factors, Starbucks began to feel a sense of "crisis." Realizing that focusing only on coffee wasn't enough, they decided to "get a piece of the pie" in the energy drink market.

However, "getting a piece of the pie" is not that easy! Market analysts in the Americas indicate that consumers have strong brand loyalty to energy drinks, and when choosing energy drinks, they tend to prefer major brands or established brands. While Starbucks has significant recognition, it's only famous in the coffee industry. In the energy drink sector, Starbucks can only be considered a new brand. Therefore, consumers might really not be interested in the energy drinks launched by Starbucks this time, or the consumers might only be trying them out of curiosity, or they might be Starbucks' original customers.

In early 2020, Coca-Cola tried launching energy drinks in the American market, but sales were extremely low, so they withdrew the product from the American market in late 2021, with the entire process lasting only a little over a year.

Starbucks' Strategic Approach

Starbucks is well aware of this, so they specifically approached from the angles of "low calories" and "high vitamins." They know that regardless of whether a brand is well-known or not, when entering a new market, it is a new brand. New brands require significant investment and time to establish, and to attract consumer attention, they need to stand out. Therefore, Starbucks hopes to attract consumers who have such needs or focus on health through the "advantage" of low calories and high vitamins.

Market Challenges

Even Starbucks finds the coffee market difficult to handle now... things are not simple.

Image source: Internet

For professional coffee knowledge exchange and more coffee bean information, please follow Coffee Workshop (WeChat public account: cafe_style)

For more specialty coffee beans, please add the private WeChat of FrontStreet Coffee (FrontStreet Coffee), WeChat ID: kaixinguoguo0925

Important Notice :

前街咖啡 FrontStreet Coffee has moved to new addredd:

FrontStreet Coffee Address: 315,Donghua East Road,GuangZhou

Tel:020 38364473