Starbucks takes a jab at QSR coffee competitors

March 19, 2014 | by Alicia Kelso

There's been much buzz about the limited-service coffee wars of late, particularly as McDonald's shifts its focus to breakfast to boost lagging sales, and as Dunkin' Donuts expands aggressively throughout the country.

Of course, for any coffee brand, the target remains on Starbucks. The brand raked in record revenues of $14.9B in 2013.

And, although CEO Howard Schultz didn't mention any other brand by name during today's Shareholders Meeting, he reassured the crowd that Starbucks is working to further solidify its spot atop the coffee category by "sourcing higher quality coffee than at any other time in company history."

That sourcing comes courtesy of Starbucks' recently announced acquisition of Hacienda Alsacia, a 240-hectare coffee farm in Costa Rica that is now acting as a global agronomy and research center.

Schultz said the working farm is actively refining Starbucks Coffee and Farmer Equity (C.A.F.E.) Practices model and responsible growing practices, housing a nursery of more than 160,000 hybrid seedlings. He said the company will continue to evolve its Starbucks Reserve program by the fall, with new packaging and offerings.

Starbucks Reserve includes small batch coffee available to customers by the half-pound or cup with the company's patented Clover brewing system.

"This coffee is special, it's exotic; the likes of which the marketplace hasn't seen before," Schultz said. "We're not going to allow any competitor to take (coffee leadership) away from us. This coffee is going to wow our customers. I can assure you with this breakthrough innovation, we're going to have coffee that is second to none."

Digital/mobile leadership

But brands aren't just jockeying for coffee supremecy in the cut-throat limited-service category. They're also fighting for smartphone app real estate, and Starbucks has a big footprint in this space as well.

Chief Digital Officer Adam Brotman said mobile payments now represent 14 percent of all in-store transactions in the U.S. The brand's new iPhone app was officially released today, featuring a new design and new features, including the ability to pay and tip. A similar app will be launched "soon" for Android.

"We have the world's most successful mobile loyalty and payment platform of any retailer in the world," Brotman said.

Starbucks will continue to invest in "robust digital and mobile" platforms, and plans to test mobile ordering at some point this year, Brotman said.

Topics: Food & Beverage , Marketing / Branding / Promotion , Online / Mobile / Social

Alicia Kelso / Alicia has been a professional journalist for 15 years. Her work with, and has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, and Franchise Asia magazine.
View Alicia Kelso's profile on LinkedIn

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