As October 2019 came to a close, coffee giant Starbucks reported a 6% increase in same-store sales growth in the Americas. Coming from a region that has been considered mature since 2018, this announcement came as a big surprise throughout Wall Street.
To learn more about Starbucks’ recent sales growth spurt, Forbes spoke with Ashfield Capital Partners Portfolio Manager, Adrian Fadrhonc. According to Fadrhonc, much of this performance from Starbucks can be attributed to Cold Beverage sales.
“Not new but what they call ‘beverage innovation’ has become increasingly important to same-store sales growth,” says Fadrhonc. “Some estimate that Cold Beverage was responsible for ½ of their same-store sales growth in the last quarter. Starbucks is really marketing Nitro right now which is cold brewed coffee infused with Nitrogen. It changes the texture of the drink.”
As Starbucks continually revives its sales and keeps its buzz alive by adding innovative items (such as Nitro cold coffee) to its menus and concepts to its stores, Fadrhonc remains optimistic. “Starbucks has been a pioneer among retail and restaurant companies in navigating changes in consumer behavior caused by demographic shifts and technology disruptions,” Fadrhonc explains. “We view it as more of a growth staple at this point (people need their coffee) and we think the risk profile also has positive portfolio benefits.”