Starbucks Corporation (SBUX - Free Report) recently introduced Oatmilk Honey Latte to its menu in Midwest. This menu is available in over 1,300 locations in the U.S. Midwest, including cafes in Illinois, Indiana, Iowa, Michigan, Missouri and Wisconsin.
Oatmilk, a rapidly-growing milk alternative, has been part of the menu in Europe since January 2018. It has also been available at select Starbucks Reserve locations since March 2019. Regarding the newest beverages, Starbucks’ product developer Raegan Powell said “Customers are looking for more ways to personalize their beverages. We love how the nuanced flavor you get with plant-based milks pairs with espresso, either hot or iced. It’s a new way to start your new year.”
The company also launched Coconutmilk Mocha Macchiato and Horchata Almondmilk Frappuccino blended beverage in the United States and Canada.
Menu Innovation to Drive Growth
Starbucks is strengthening product portfolio by significantly innovating beverages, refreshment, health and wellness, tea and core food offerings. The company is focusing on growing categories like Cold Brew, Draft Nitro beverages, and plant-based modifiers, including almond, coconut, and soy milk alternatives. Apart from the numerous beverage innovations, Starbucks has also been making an effort to offer more nutritional and healthy products to customers.
Meanwhile, the company’s Reserve Roastery and Tasting Room elevates the coffee experience to the next level, with small-batch super-premium coffee produced using innovative coffee-brewing techniques. Starbucks’ strategy to boost the overall brand through its premium Roastery/Reserve brands holds immense potential. Starbucks is rapidly expanding food offerings in the United States to complement its drinks. Food has become a key growth driver and contributes more than 21% to the company’s U.S. revenues.
Meanwhile, shares of Starbucks have gained 37.5% in the past year, compared with the industry’s rally of 19.1%.
Zacks Rank & Key Picks
Starbucks currently has a Zacks Rank #4 (Sell). Some better-ranked stocks in the same space, include Dunkin' Brands Group, Inc. (DNKN - Free Report) , Dave & Buster's Entertainment, Inc. (PLAY - Free Report) and Domino's Pizza, Inc. (DPZ - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dunkin' Brands Group and Dave & Buster's Entertainment has an expected long-term earnings growth rate of 10.9% and 14.8%, respectively.
Domino's Pizza has beat estimates three of the trailing four quarters by 3.7%, on average.
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