Starbucks 2019 holiday drinks, cups unveiled: Inside the annual sales push

Starbucks will kick off the holiday season with the debut of four festive cup designs and the return of its seasonal beverages in stores on Thursday, marking the culmination of a year-long effort by executives to craft a strong product lineup for the company’s most critical campaign of the year.

This year’s designs – Polka Dots, Merry Dance, Merry Stripes and Candy Cane Stripe – feature unique riffs on traditional red-and-green holiday motifs. Starbucks’ reusable limited-edition “red cup” will also return as a free giveaway Thursday for customers who buy any one of five holiday beverages – peppermint mocha, toasted white chocolate mocha, caramel brulee latte, chestnut praline latte or eggnog latte.

Starbucks’ holiday preparations begin a full year in advance, with company executives using consumer feedback and extensive product testing to help determine which beverages, food items and cup designs will most resonate with shoppers. The result is a mixture of classic menu items like the peppermint mocha, which returns for the 17th straight season, and fresh offerings like this year’s cup designs.

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“It starts very early. We’re already looking at next year now and our creative team, that’s combined with our customer insights team, talks through holiday season, at the close of the season and, actually, while we’re going through the season and it begins to develop what the customer wants to see,” Starbucks COO Rosalind Brewer told FOX Business.

The menus behind the counter at Starbucks locations will flip from a solid green to solid red background this holiday season. Starbucks baristas will wear red aprons to match the reusable red holiday cups.

Starbucks says it is prepared to meet customer demand for the reusable red cups this year after store supplies of the limited-edition offering quickly ran out last season. Customers who receive a red cup can return it to Starbucks locations in the U.S. and Canada from Nov. 7 to Jan. 7 to get a 50-cent discount off holiday beverages.

“It will be quite festive inside the building, and what’s really neat about it is we’ve done so much work this year on in-store execution,” Brewer added. “We feel really good about having enough available red cups this year in terms of the inventory of the cups and the way our baristas, are able to customize and create these wonderful beverages for our customer base.”

Aside from its flagship holiday beverage lineup, Starbucks’ seasonal food and bakery offerings include its holiday turkey and stuffing panini, snowman cookie and sugar plum Danish, among others. Starbucks Christmas blend coffee, branded holiday merchandise and gift cards will also return to stores.

Starbucks baristas undergo training to help boost efficiency, learning how to make labor-intensive holiday beverages during peak hours. The company’s pumpkin spice latte promotion – another flagship campaign – serves as a powerful learning tool for staffers ahead of the holidays.

“What’s most important is to make sure that we understand how to manage this beverage lineup during peak performance times like morning schedules,” Brewer said.

The holiday push comes as Starbucks faces tough competition from rivals such as Dunkin and McDonald’s as well as high-end local coffeehouse chains. Dunkin unveiled its holiday menu on Monday, 48 hours before Starbucks.

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Starbucks’ holiday cups and beverages have developed a cult following – and have also been the subject of social media outrage in years past. In 2015, the company released a red holiday cup with its green logo that was considered by some onlookers as a bid to avoid a direct association with Christmas. Subsequent redesigns in 2016 and 2017 also drew a mixed reaction.

When holiday sales disappointed investors two years ago, Brewer admitted in a November 2018 earnings call that Starbucks stores “didn't sufficiently reflect the festive environment." The coffeehouse chain has responded by getting back to basics, trimming the number of seasonal product offerings and focused on establishing a festive feel in its stores to entice shoppers to get into the holiday spirit.

The strategy paid off. For its holiday quarter in fiscal 2019, Starbucks said revenue rose 9 percent to $6.63 billion, outpacing Wall Street’s expectations.

Starbucks holiday menu items are subjected to extensive testing in the company’s Seattle-based innovation lab, the Tryer Center. The company utilizes a combination of in-house experts and outside customers to test items, as well as its coffee tasters to determine the annual holiday blend.

“You’ll see four beverages [other than the peppermint mocha], but I can tell you it starts with multiples of four before we narrow it down to the actual four beverages,” Brewer said.

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