Cold Beverages Accounted for 75% of Total Beverage Sales at Starbucks U.S. Stores in Q3 2022

Rising demand for cold beverages in U.S. Starbucks stores contributed to consolidated net revenues of $8.2 billion for the third quarter of 2022 (for 13 weeks ended July 3), which was up 9% compared to the same period a year ago. The U.S. stores outpaced global stores, with U.S. comparable store sales increasing 9%, driven by an 8% increase in average ticket, compared to international comparable store sales decreasing 18% due to a 15% decline in comparable transactions and a 4% decline in average ticket. Temporary closures of Starbucks stores in China negatively impacted international store sales.

Cold drinks are big revenue opportunity in coffee shops

The 8% increase in average ticket in Starbucks U.S. stores was driven by cold beverages accounting for roughly 75% of its total beverage sales in U.S. company-operated stores. Cold beverages bring in more revenue per cup as Starbucks customers pay extra to customize their cold beverages with modifiers such as syrups and cold foam. “Customers are increasingly customizing their cold beverages by adding modifiers that enable the creation of a virtually unlimited range of taste, flavor and color profiles and then sharing their unique cold beverage creations with the world through social media.,” Howard Schultz, Interim Chief Executive Officer, said during Starbucks Q3 2022 earnings call that took place on August 2. I wrote about how “Offering more cold drinks is a major revenue-enhancing opportunity for coffee shops and cafes, as demand for cold coffee continues to grow.” in my article on Cold Beverages Red Hot at Coffee Fest 2022 for The Food Institute.

Viral TikTok Starbucks Drinks

The visual beauty of many cold beverages encourages sharing on social media, with thousands going on TikTok to share their unique Starbucks drinks. There are multiple articles on how to order from the “secret menu” such as “10 Viral TikTok Starbucks Drinks You Should Try to Order” along with suggestions to choose a slow time, show gratitude to your barista, and tip the barista since these drinks require extra work.

If you want to order the Strawberry Acai Refresher that has been nicknamed the TikTok Drink, ask for a Venti Strawberry Acai Refresher blended with 3 scoops of strawberries and 3 scoops of blackberries. These fruit inclusions are freeze-dried berries.

To encourage more customers to customize their cold beverages, the company announced on August 1 that the home screen on the Starbucks app will feature a Summer Menu Remix to highlight cold beverages that have a fun way to customize or “remix” the beverage. ?

Cold beverages satisfy different need states

Offering a wide selection of cold beverages allows coffee shops to address more need states and consumption occasions. While hot brewed coffee is typically associated with a caffeine boost during mornings, an Iced White Mocha can serve as an afternoon snack while the TikTok Gummy Bear Drink provides all-day refreshment. During the Starbucks Q3 2022 earnings call, Schultz talked about “Starbucks' unique ability to deliver handcrafted, customized cold beverages that satisfy customer desires and different need states while creating opportunities for customers' self-expression deepens our connection to customers, sets us apart from any other industry participant and provides us with a significant ongoing competitive advantage in the marketplace.”

Gen Z loves Iced Shaken Espressos

“Iced Shaken Espresso, introduced onto our Iced Espresso platform only last year, is resonating so wildly with our Gen Z customers that it has already become the fastest-growing product category in our U.S. company-operated stores, growing 50% year over year, more than doubling year to date and importantly creating new customer occasions in the midday and afternoon dayparts.,” said Schultz during the earnings call.

In March 2021, Starbucks added two new iced, plant-based shaken espresso beverages to its core menu – Iced Brown Sugar Oatmilk Shaken Espresso (pictured) and Iced Chocolate Almondmilk Shaken Espresso. A year later, the company introduced Iced Toasted Vanilla Oatmilk Shaken Espresso. These coffee-forward drinks offer a creamy, slightly sweetened, plant-based beverage option with fewer calories (140 calories and under in a Grande size) than Iced Lattes. An Iced Shaken Espresso with 2% milk is also available.

Photo credits: Starbucks Corporation, Virginia Lee

Virginia Lee?is a food, drinks & beauty trendspotter & explorer, market researcher, writer, and speaker. She has over 15 years of market research experience advising global companies and startups on innovation and market entry opportunities. As a speaker, Virginia has presented on food, beverages, beauty & personal care, CBD, health & wellness, and ingredients at CBD Expo, Flavors and Fragrances, Natural Products Expo East, and Cosmoprof Cosmetica Brasil. Connect with Virginia on Twitter and Instagram at @VirginiaALee.