Future of Starbucks
CATEGORIES
- Asset Performance
- Innovation assets and pipeline
- Disruption vulnerability
- Company headlines
- Company’s future prospects
DATA ACCESS
Starbucks Corporation is a US coffee company and coffeehouse chain. Starbucks was established in 1971 in Seattle, Washington. The company operates in different locations worldwide. Starbucks is regarded as the principal representative of "second wave coffee", initially distinguishing itself from other coffee-serving venues in America by customer experience, taste, and quality while popularizing darkly roasted coffee. Since the 2000s, third wave coffee makers have targeted quality-minded coffee drinkers with hand-made coffee based on lighter roasts, while Starbucks nowadays uses automated espresso machines for safety and efficiency reasons.
Innovation assets and Pipeline
All company data collected from its 2016 annual report and other public sources. The accuracy of this data and the conclusions derived from them depend on this publicly accessible data. If a data point listed above is discovered to be inaccurate, Quantumrun will make the necessary corrections to this live page.
DISRUPTION VULNERABILITY
Belonging to the food and drug store sector means this company will be affected directly and indirectly by a number of disruptive opportunities and challenges over the coming decades. While described in detail within Quantumrun’s special reports, these disruptive trends can be summarized along the following broad points:
*First off, RFID tags, a technology used to track physical goods remotely, will finally lose their cost and technology limitations. As a result, food and drug store operators will begin placing RFID tags on every individual item they have in stock, regardless of price. This is crucial because RFID tech, when coupled with the Internet of Things (IoT), is an enabling technology, allowing the enhanced inventory awareness that will result in precise inventory management, reduced theft, and reduced food and drug spoilage.
*These RFID tags will also enable self-checkout systems that will remove cash registers entirely and simply debit your bank account automatically when you leave a store with items in your grocery cart.
*Robots will operate the logistics inside food and drug warehouses, as well as take over in-store shelf stocking.
*Larger grocery and drug stores will transform, in part or in full, into local shipping and delivery centers that service various food/drug delivery services that deliver food directly to the end customer. By the mid-2030s, some of these stores may also be redesigned to accommodate automated cars that may be used to remotely pick up their owners’ grocery orders.
*The most forward-thinking food and drug stores will sign customers up to a subscription model, connect with their future smart-fridges and then automatically send them food and drug subscription top-ups when the customer runs low at home.
SCENARIOS
Probable
*Starbucks will reduce the use of plastic straws and plastic cups to zero in all their stores.
*Starbucks will open almost 3,500 new stores across the US and provide Americans with nearly 70,000 new jobs.
*Most of the Starbucks locations will become drive-throughs.
Plausible
*Starbucks will be the first coffee brand in the world to open a fully AI-robot operated store.
*Half of Starbucks stores will be transformed into experiential, new tech-friendly stores, adjusted to customers using VR and AR glasses.
*All American Starbucks stores will become cashless.
Possible
*Starbucks drive-through service will serve electric car users only.
*Starbucks creates its own programme to save and support refugees in Europe, Asia and South America.
*Starbucks will create an AR simulation of their coffee shop. The user will stay at home wearing their AR glasses, order a coffee at the virtual till, sit by a virtual table and have a real coffee delivered to their home.
COMPANY’S FUTURE PROSPECTS
*China is Starbucks’ biggest growth opportunity. A new Starbucks coffee shop is opened there every 15 hours.
*Starbucks has hired experts formerly working at Cisco, Disney, Amazon or Microsoft, to enhance and support Starbucks’ technological platform.
*Starbucks has developed a closer business relationship with Microsoft, with Starbucks using many of Microsoft’s cloud services and its support and advice on apps creation.
*Starbucks has created a very successful app which includes rewards, beverage ordering and collection from the nearby store, in-app payment system, location-based services, and more.
*The increasing demand for experiencing, not only consuming, services.
*The increasing need for saving the natural environment and switching the company policy to sustainable business.
*As climate change worsens, the developing countries where the coffee bean is grown may not be able to grow as much beans as they can today, impacting supply and raising costs for Starbucks.
*Starbucks has always put the customer experience in the centre of the business. To improve the customer experience, over the next few years the company plans to open 1 000 experiential coffee shops. In the shops, customers will be able to witness the coffee brewing process and see an operating bakery through glass walls, or order aperitifs at the bar.
*The experiential stores will be created with technologies supporting the customer experience. These will include engaging technological features and modern devices, such as augmented reality available through a smartphone (ex. used to see inside the coffee brewing process; the feature is already implemented in an experiential store in China), the menu displayed on tablets and Clover X (cutting-edge machinery, grinding beans and brewing coffee in 30 seconds).
*Starbucks will open 20-30 roasteries around the world, which will serve as the company’s innovation incubators and elevate the brand. The innovations will include new product breakthroughs and testing new technological solutions.
*Starbucks will start accepting cryptocurrency payments from November 2018 on.
*Starbucks will eliminate plastic straws in 28 000 its stores worldwide by 2020. Instead, the company will provide customers with an ‘adult sippy cup’. This initiative could mean a reduction of plastic straws used in Starbucks stores by around a billion each year.
*Thanks to the collaboration between Starbucks and McDonald’s, ideas from around the world are gathered to find a future solution for a compostable cup.
*Starbucks will offer training to 200,000 coffee farmers to improve the sustainability of their crops by 2020.
*The company will open 3,400 new coffee shops across America by 2021, which will account for 68,000 new jobs.
*Starbucks wants to make all its equipment smart and interconnected. It will mean less technical duties for the staff and more time and focus given to the customers.
*The company will increase the number of cashless coffee shops around the world (currently there are only two cashless Starbucks stores - in Seattle and Seoul).
*Starbucks plans to hire 25,000 veterans and military spouses by 2025, and 10,000 refugees by 2022 in 75 countries.
*As part of the Sustainable Coffee Challenge and a commitment to plant one billion coffee trees, Starbucks will provide farmers with 100 million trees by 2025.
*Starbucks aspires to serve 100% ethically sourced coffee and, by connective work with other companies in the industry, Starbucks hopes for coffee to become the first sustainable agricultural product in the world.
*Thanks to scaling the Mercato lunch programme - the Starbucks food donation initiative operating across America - in the next five years it will be possible to sell or donate 100% of Starbucks food in American stores.
*In the next few years, 80% of Starbucks store growth will be drive-throughs. This will mainly affect the suburbs of middle and South America. The company’s drive-through locations already have a 25-30% higher revenue than the typical coffee shops in city centres.
*Starbucks’ in-app payment system is forecasted to be the leader in the proximity payment platform competition through 2022.
*Starbucks will meaningfully contribute to decreasing plastic waste in the industry and therefore set an example for other businesses, and encourage them to work for saving the environment.
*The company will provide support those in need by saving and distributing the unsold food, as well as by hiring youth, veterans and military spouses.
- Forecasts collected by Alicja Halbryt