Starbucks Unveils 3-Year Reinvention Plan

The company will improve drink-prep efficiency, employee relations and boost its loyalty program, among other changes.

September 15, 2022

SEATTLE—Starbucks is reinventing itself, with plans to automate processes, improve employee scheduling and other benefits, as well as projecting double-digit growth for revenue and earnings per share as a result of the plan, reports the New York Times and CNBC.

Interim CEO Howard Shultz introduced the three-year plan to 150-plus investors in person. Although Starbucks was seen as a “winner” during the pandemic by effectively converting its customers to drive-thru and pickup, Shultz said the company had “lost its way” in certain areas.

Cold-drink orders have taken off with Starbucks customers, making up 70% of the company’s revenue, and the add-ins for these drinks, such as an espresso shot or sweeteners, account for more than $1 billion in sales each year on their own. The surge has been fueled by younger consumers, and their affinity for elaborate, customized coffees. However, because these drinks take time to make, employees’ jobs are more demanding, resulting in order delays.

In response, Starbucks is introducing a piece of equipment called the Siren System, which is designed to meet the growing demand for customization of hot and cold beverages and warm foods. Part of the system includes a redesign of its cold beverage station, which sharply reduces the time and number of steps to make cold beverages.

Starbucks also is developing a faster way to extract cold coffee and espresso with the Cold Pressed Cold Brew system. The system can make cold-brew coffee in seconds and in fewer than four steps, compared to Starbucks’ current method for cold brew which is steeped for 20 hours and takes more than 20 steps to make.

“We will never replace our baristas,” said Deb Hall Lefevre, Starbucks chief technology officer. “Rather, our job is to automate the work and simplify it so that their job is easier.”

Starbucks is investing about $450 million to upgrade its cafes with the new equipment and updating stores.

“Our physical stores were built for a different era and we have to modernize to meet this moment,” outgoing Chief Operating Officer John Culver told investors.

The company is building “purpose-built store concepts that meet customers wherever and whenever they want” and improve employee experience, according to a statement. It’s also expanding its Starbucks Delivers program in the U.S. with a new partnership with DoorDash, which will expand to a national scale alongside UberEats in fiscal 2023, “to make it even easier for customers to get Starbucks when and where they want.”

Starbucks is also boosting its loyalty program by extending the program to licensed retailers and linking the program to other loyalty program, such as those for retailers and airlines. Customers will be able to earn their stars on purchases other than Starbucks, and they’ll be able to use their points for airline miles.

The employee turnover rate for the company is better than the rest of the industry, but it’s still too high and there is a focus on reducing it, according to Frank Britt, chief strategy and transformation officer at Starbucks. The company is working on an app for its employees that allows them to manage their schedule and help with career growth. It’s also introducing a savings plan and student loan assistance program.

“As we execute on our Reinvention plan, we are building on our 51-year history of market leading innovation to position our business and our brand for the next chapter of growth,” said Schultz.

The 2022 NACS Show, October 1-4, in Las Vegas includes four education sessions on foodservice: Menu Optimization: Think Like a RestaurantGlobal Foodservice Trends & MenusFoodservice Analytics: The Recipe for Success and Gulp! Reinvigorated Dispensed BeveragesRegister today to attend the NACS Show.