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Starbucks made the case to investors today that its multiformat approach that augments the in-store experience with drivethru, mobile order & pay and lately delivery will ensure its continued leadership in coffee landscape, at time array of often drivethru-dominated rivals like Dutch Bros have been accelerating their expansions. Tho those rivals were never mentioned by name, the Investors Day presentation in NY by SBUX brass implicitly rebuked those who've viewed them as a serious threat to coffee leader. At time it's been visibly enhancing the in-store experience, Starbucks will continue to work all four formats as a unified flywheel except in some urban locations where the drivethru component is impractical, chmn/CEO Brian Niccol informed Wall Streeters during update of co's turnaround effort. The caf&eacute;, as he noted, "creates a halo to lift every other channel," but its drivethru biz is the size of a Fortune 500 co on its own and home and office delivery has been scaling rapidly to point that it generated over $1 bil in 2025 fiscal year that concluded a coupla months ago. That was echoed by most speakers this morning. COO Mike Grams: "Why will we continue to win? Because we're not a single-channel brand." CFO Cathy Smith: "Our omnichannel model outperforms single-channel formats, so we will focus on what works best for our customers." The three & a half hour event offered oppty for investors to interact with rebuilt leadership team under Niccol, with just one exec out of five bringing extensive experience at roaster, CMO Brady Brewer, a vet of nearly 17 yrs. Also reporting progress on their watch were CFO Cathy Smith, who'd held similar roles at Nordstrom, Target and Walmart International, and global chief brand officer Tressie Lieberman, a colleague of Niccol's at Chipotle. COO Grams is a 30-yr quick-serve restaurant vet, mainly Taco Bell, who's been in Seattle about a year. Those invited to in-person event got to sample array of innovation on both food and bev sides to soundtrack of optimistic tunes like "I'm a Believer," "Yesterday's Gone" and, of course, "All Together Now," the Beatles song that serves as background to new campaign heralding stores' third-place cred. Niccol, of course, was recruited from Chipotle a year and a half ago after SBUX board had ousted its earlier choice, ex-Pepsi exec Laxman Narasimhan, as not up to the job.At core of revitalization program, as Niccol has made clear from his arrival, is effort to reclaim gigaroaster's third-place cred after earlier mgmt teams, partly in response to pandemic, removed seating and made the spaces less inviting to lingerers. Tho co had recently rationalized locations that didn't meet financial hurdles or deliver on environmental "uplift" it's seeking, it's working to add 25K+ seats to existing cafes while upgrading thousands more with more comfy alternatives to foster "longer dwell times" in keeping with SBUX' revived mission of serving as a community hub. With co having made progress on speeding up service, reducing out-of-stocks and restoring baristas' personal touch, this is year where it's going on offense, Niccol said. He's planning to resume store expansions in 3 years at rate of 400 company-operated units a year and may accelerate pace after that. After all, rivals operate stores in 1,000 locations where Starbucks doesn't have a caf&eacute; for at least a mile, he observed.Tho co also has rationalized menu of items that generated lower volumes or were too difficult to craft efficiently, innovation is very much a priority, with co planning to quickly move successful ideas from market where they originate to overseas markets, process Coca-Cola brass calls "lift & shift." Just as Pumpkin Spice Latte leapfrogged from US market to 80 markets now, a "Bearista" coffee mug that launched in South Korea proved to be a viral hit when brought to US this past holiday period. By now cold foam topping - a less caloric alternative to the whipped cream Starbucks used to offer - accounts for one-third of co's $1 bil in revenue from modifiers as it's migrated across globe.As CEO Niccol noted, "we own the morning occasion," with half co's US biz, some $12 bil, occurring before 11 AM, and other $11 bil after that hour. (The stores open at 5 AM now and that may go to 4:30.) So a key priority is to do more to create a "second peak." Energy push will be a key part of that, using proprietary blend of B-vitamins and naturally sourced caffeine that can be deployed in multiple formats, including popular iced Refreshers. Tho some have marveled at how late SBUX has been to that game, global chief brand officer Tressie Lieberman argued alternatively that "we're not chasing trends, we're building on a beloved platform," the Refreshers, a $2 bil platform. The energy refreshers due this spring will allow customization options like decaf or an extra energy boost.Also key to boosting afternoon biz is tea, which already overindexes in that daypart. One step toward meeting consumers' desires there was to remove sugar from matcha last year. Next week will see next phase with intro of dedicated matcha menu. Later this spring will bring a premium chai. Most items will allow visitors to customize sweetness level. Starbucks also will be twinning its espresso and matcha drinks with trending ingredients like ube and coconut, she indicated. Bakery case upgrades will include a strawberry matcha loaf. And, as Niccol noted on earnings call yesterday, recent launch of protein-fortified entries has performed well enough to get further support. As Lieberman reminded, no innovations are greenlighted without ensuring that they're manageable for so-called green aprons who have to assemble them, following "partner-first mentality" inculcated by Niccol. On snack side, as we reported, it's brought in outside brand Khloud protein popcorn to fill afternoon snacking occasions. Tie-ins to likes of Mr Beast and Winter Olympics aim to keep brand culturally relevant, she said.Among innovations that attendees were invited to sample was new dark roast called 1971, over a year in development, made from Sumatran, Colombian and Brazilian beans with notes of burnt sugar and cr&egrave;me brulee for nostalgic kick. It's heading for Feb/Mar debut in US, then will roll out to other global markets.On store front, as COO Grams described, Starbucks is moving away from disruptive million-dollar remodels in favor of more "uplifts" that cost just $150K and can be completed mostly overnight without having to shutter store. Some 200 already have been implemented, with program due for completion in 2028. These refits are not as extensive but they serve to signal that "the vibe is back," he contended. Co also is developing next-gen coffeehouse at lower buildout and operating cost than in past "but unmistakably Starbucks."Tho session was full of still and video imagery of beaming baristas, there was no mention either in presentations or questions of restive employees' unionization efforts. Rather, Niccol and his team sought to emphasize the array of salary, benefits and newly restored job satisfaction that makes wearing a green apron the #1 retail job. He pointed to strong job application and retention trends to suggest that it's working.

STARBUCKS INVESTOR DAY: Omnichannel Model Will Prevail, SBUX Brass Insists; Big Push to Win Afternoon Daypart with Energy Refreshers, Augmented Tea & Matcha Menu

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