Starbucks wants to sell you a sushi burrito with your Frappuccino?!
Starbucks has tried it all: First came cake pops, then truffle mac and cheese, and earlier this year, avocado toast.
Now the coffee giant is banking on another food fad to drum up lunch and dinner business: The sushi burrito.
The chicken maki roll – which the company says, is “a classic California burrito with a twist” – comes with cooked chicken, pickled cabbage and avocado, and is rolled in sushi rice and wrapped with seaweed. It is currently part of the Mercato lunch menu at a handful of stores in Chicago and Seattle, where Starbucks is based.
But first it has to overcome a substantial hurdle: Convincing customers its food is worth eating.
Despite repeated – and often novel – efforts, analysts say Starbucks has yet to find much success hawking meals alongside its coffee. The challenges are logistical – Starbucks stores don’t have kitchens, for example – as well as behavioural. Over the past four decades, Starbucks has trained its customers to run in, grab a coffee and run out. Getting them to think beyond beverages, or linger for a meal, has proven more difficult, particularly as modern customers demand locally sourced, freshly made food.
“The short answer is, Starbucks food is never going to be better than the hot, made-to-order meals you’re going to get at a place like McDonald’s or Dunkin Donuts.” Stephen Dutton, an analyst for market research firm Euromonitor International.
The company’s new Mercato menu includes grilled cheese sandwiches with burrata, and chicken and quinoa soup.
“It’s all about providing higher-quality, fresh food at lunch,” Scott Maw, the company’s chief financial officer, told CNBC in June.
But analysts say the offerings raise a number of questions: Selling croissants with coffee is one thing, but how do you premade customers to pair their afternoon lattes with pre-made sushi? And how willing are customers to shell out $10 for lunch when they could just as easily go elsewhere?
“Nobody goes to Starbucks to buy food,” Dutton said. “When they do buy something, it’s usually because they’re like, ‘I’m starving and I have to get to work, so I’m going to pick up this yogurt.’”
But that’s not to say customers aren’t shelling out, especially for breakfast. Roughly 20 percent of Starbucks’s revenue – which last year was $21.32 billion – comes from food sales, up from 16 percent five years ago. In recent years, the company has been successful in beefing up sales of breakfast foods, thanks in part to its purchase of La Boulange bakery for $100 million in 2012. But analysts say growth has plateaued as the company struggles to break into fiercely competitive lunch and dinner markets.
“There is a perception that Starbucks is selling an inferior product,” said Nick Seytan, an analyst for Wedbush Securities. “Customers are saying, ‘How good can that salad or sandwich be if you’re not making it in front of me?’”
Earlier this year, the company said it would stop selling beer and wine, as well as small plates like truffle mac and cheese and bacon-wrapped figs at its stores. Those additions, rolled out with much fanfare a few years ago, had failed to resonate with customers.
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Will sushi burritos help change that? Dutton says he remains unconvinced.
“This is one more way of outsourcing the problem instead of solving it,” he said.
AUTHOR: (c) 2017, The Washington Post · Abha Bhattarai