Starbucks a Great Testing Ground for Grocery Sales
When Starbucks introduces a product into grocery stores it already knows whether the item can generate repeat purchases. That’s because it has first tested those very same items in its own stores before mass producing them for food retailers.
According to a Wall Street Journal report, Starbucks is looking to expand the number of products it places in grocery stores and it’s looking for its own coffee shops to serve as the testing ground.
Starbucks, which first got into selling its products in supermarkets in 1996, has been encouraged by the response to the rollout of its Via instant coffee at retail. Sales in the U.S. are reported to have exceeded $100 million.
The company is also looking to eventually introduce Tazo tea and Seattle’s Best products in grocery stores after testing them in its own locations.
Diane Dietz, executive vice president and chief marketing officer at Safeway, told the Journal, "When they test and sample things they’re constantly tweaking things so that when they go national [with a product] they have a solid program."
According to the report, Starbucks’ CEO Howard Schultz wants to use the company’s rewards program to provide consumers with incentives to buy its products wherever they are sold.
"We will reward customers who buy Starbucks products in the grocery store with opportunities to get rewards in our stores and vice versa," Mr. Schultz said. "That’s a sea change in our ability to integrate these two channels of distribution."
Discussion Questions: Does Starbucks have an advantage over other food and beverage brands when it comes to new product launches in grocery stores? Will the testing Starbucks does get it a pass on some of the fees imposed by retailers taking on new products?
- For Starbucks, a New Retail Mix – The Wall Street Journal
- Starbucks the Supermarket: A Much Better Plan Than Starbucks the Record Store – BNET
- Starbucks wants more supermarket products – MSN Money