Largely driven by Millennials and Gen Z and particularly when it comes to iced and specialty holiday offerings, Starbucks’ customised beverages business reached $1 billion in 2022.
The Gen. Z customer ordering a customised iced Starbucks drink (preferably fall or holiday-themed) isn’t just sharing her drink on social media: she’s also sharing the wealth. Starbucks’ boom of 7 percent same-store sales growth and 3 percent revenue growth for the quarter ended Oct. 2. has a lot to do with its younger customer base, and the growth of customised, iced beverage platforms.
Starbucks is seeing big results as its customer base gets younger and keeps ordering personalised drinks — whether a secret menu concoction or simply swapping out for plant-based milk — as the Seattle-based coffee giant’s customisation business reached $1 billion or more than 60 percent of beverage sales, in 2022.
This is despite financial coaches telling consumers to skip their morning coffee runs to save a couple bucks and despite prices increasing nearly 6 percent over the last year. Consumers aren’t recoiling.
“We haven't seen the loyalty and the transactions abate,” Starbucks Interim-CEO Howard Schultz told investors on the Q4 earnings call.
In addition to leveraging the marketing power of an army of iced coffee-drinking “Zoomers” posting their customized drinks on TikTok, Starbucks has ramped up the scope and scale of its development plans. International markets (outside of China) and licensed stores in particular have been seeing bump-ups in success.
Over the next three years, Schultz said that the company’s goal is to open eight new stores per day (around 8,000 stores) to bring the total store base up to 45,000 by the end of 2025, which would include new types of store formats from to-go stores to the new three-floor Starbucks Reserve store opening up in the Empire State Building.
