Starbucks Hits a Summer Home Run
Karen is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
This summer’s heat wave has customers sweating and iced coffee dealers smiling. 'Cold' coffee sales should exceed $800 million this year and to give you an idea of the market potential, New Yorkers alone spent about $31 million in summer 2011 to drink 300,000 cups of iced coffee products per day.
The heat (pardon the pun) is on for coffee purveyors to come up with something new and innovative to attract new customers. With the release of Via Refreshers, Starbucks (NASDAQ: SBUX) proves once again why their competitors continue to trail far behind.
Refreshers is the third product in the Via single serving instant coffee line. It comes in two flavors, Cool Lime (my favorite) and Very Berry Hibiscus which has whole blackberries in it. Refreshers are created through green roasting the coffee beans so you get a shot of caffeine without the coffee taste. Both flavors are lightly sweetened (no syrupy aftertaste) and have only 35 calories.
Starbucks describes this roasting technique on their website as follows: “For those of you who are curious, this new take on coffee is made through an innovative process. We start with high-quality, green coffee beans. We soak the beans in water and pull out the caffeine and other good stuff. Then we dry the whole concoction down to create the concentrated essence and goodness of green coffee. That's Green Coffee Extract. No roasting. None of the steps that coffee beans typically take on their way to roasty perfection. So the end result is a natural source of energy which has no traditional coffee flavor.”
So what do Starbuck’s rivals have to offer as competition? The closest thing they have is a variety of iced coffee drinks offering varying combinations of caffeine and calories.
Dunkin’ Donuts (NASDAQ: DNKN) came out with their Coolatta freezes in a variety of flavors, including one caffeinated drink aptly named Coffee Coolatta. The Oreo Coolatta in Coffee selection tastes like a very sweet Frappuccino and the small size has 480 calories. It’s a good drink, but not refreshing.
The most refreshing iced coffee drink on the McDonald’s (NYSE: MCD) menu is their plain iced coffee. McDonald’s iced coffee drinks run a calorie count gamut from 140 calories for a small iced coffee to a whopping 530 calories for a chocolate chip mocha frappe. The iced coffee tastes great on a hot day, but their frappe is sickeningly sweet.
A wholly owned subsidiary of Berkshire Hathaway (NYSE: BRK-A), Dairy Queen’s iced coffees are more like a frosty delicious desert treat than a thirst-quenching summer drink. The small Cappuccino MooLatte has 450 calories while the large Mocha MooLatte is 820 gut-busting calories!
Of all of Starbucks competitors, 7-Eleven (SVNDF) serves up an iced coffee that’s just that: coffee with cream and sugar for 140 calories. Of course you can make an iced coffee from scratch using their brewed coffee, ice, and sweetener, but that’s more trouble than it’s worth.
None of Starbucks’ competitors offer any caffeinated beverage on par with Refreshers. So kick back, relax and enjoy a Refreshers while waiting to see how long it takes for the competition to catch up!
kprogers has no positions in the stocks mentioned above. The Motley Fool owns shares of McDonald's and Starbucks. Motley Fool newsletter services recommend McDonald's and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.
