Starbucks goes blond for light coffee fans

With the introduction of its lightest roast ever in January, the company is attempting to reach a broader range of coffee drinkers.

By Trefis Nov 11, 2011 1:17PM
Image: Coffee (© Foodcollection RF/Getty Images/Getty Images)Starbucks (SBUX) is launching a lighter roast in January to attract customers who prefer milder coffee.

Based on its consumer research, Starbucks is offering its Blonde line for the estimated 40% of American coffee drinkers, or 54 million people, who prefer a lighter roast. The new coffees in the Blonde category include several under the Veranda and Willow blend names.

Starbucks' competitors in the specialty-coffee market include McDonald's (MCD), Caribou Coffee (CBOU) and Peet's Coffee (PEET).

See our full analysis for SBUX


Trefis Break-Up of Starbucks Stick

Blonde coffee to drive sales


With the introduction of Blonde, Starbucks' offerings have expanded to light, medium and dark varieties. Starbucks is attempting to poach customers from competing firms, such as McDonald's and Dunkin' Donuts, that offer milder coffee.


According to Nielsen statistics, more than 70% of total premium coffee sales in grocery sales are in light and medium-roast categories. The statistics show a huge opportunity in the light coffee market. In July, Costa Coffee also launched a new slimmer brand of coffee, called Costa Light, which it said was developed based on customer feedback highlighting a need for a light and indulgent coffee.


We believe the introduction of Blonde shows that Starbucks is keen on innovating new products and is receptive to customer feedback. The firm has also been looking to expand its grocery business and enter the juice business. The new Blonde will surely lead to surge in sales at Starbucks. However, it is still to be seen how successful it would be in capturing market share in the light coffee industry.


Our price estimate for Starbucks stands at $40, implying some downside to the market price.


0Comments

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

STOCK SCOUTER

StockScouter rates stocks from 1 to 10, with 10 being the best, using a system of advanced mathematics to determine a stock's expected risk and return. Ratings are displayed on a bell curve, meaning there will be fewer ratings of 1 and 10 and far more of 4 through 7.

124
124 rated 1
282
282 rated 2
455
455 rated 3
624
624 rated 4
642
642 rated 5
665
665 rated 6
610
610 rated 7
460
460 rated 8
287
287 rated 9
167
167 rated 10
12345678910

Top Picks

SYMBOLNAMERATING
KOGKODIAK OIL & GAS Corp10
TWXTIME WARNER Inc10
BBBYBED BATH & BEYOND INC10
FOXATWENTY-FIRST CENTURY FOX Inc CLASS A10
COPCONOCOPHILLIPS9
More

VIDEO ON MSN MONEY

ABOUT

Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.

Contributors include professional investors and journalists affiliated with MSN Money.

Follow us on Twitter @topstocksmsn.