Starbucks Expands Into Energy Drinks Market with Refreshers Drink

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(Photo: Stock.xchng)
(Photo: Stock.xchng)

BUSINESS

  • Starbucks announces new Refreshers line of energy drinks
  • Refreshers drinks contain unroasted coffee extract, with less caffeine then traditional energy drinks
  • Starbucks to create 150 new US jobs

Starbucks plans to break into the rapidly expanding energy drinks market with its new fruit juice and coffee extract beverage, called Starbucks Refreshers.

The plans were outlined at the coffee giant’s annual shareholder gathering in Seattle, with chief executive Howard Schultz announcing the creation of additional manufacturing jobs in the United States.

Aimed at dethroning the likes of Red Bull and Monster in the $8 billion energy drinks market, the key ingredient in the new Refreshers drink comes from unroasted coffee extract, which contains less caffeine then most rivals products, typically made from roasted coffee beans.

In 2010, Starbucks saw its first positive growth in two years, following a massive restructuring and cost-cutting plan that closed around 1,000 outlets worldwide. The sacrifices had an instant turn-around effect, with shares rising over 50% last year.

Now the world’s biggest coffee chain has plans to continue releasing new products and expanding into new markets.

Homegrown Jobs

The 40-year-old coffee company told shareholders at the Seattle meeting that it would create around 150 US jobs for projects like a new plant in Augusta, Georgia, and the extension of its roasting facility in Sandy Run, South Carolina.

Schultz said the company had been weighing up expansion options overseas, where it would save significantly on costs, but that it had opted instead to invest in jobs at home.

"Delivering long-term shareholder value is essential, but today's increasingly complex world requires companies, including Starbucks, to hold ourselves to higher standards," Schultz told investors.

All-Out Expansion

The new energy drink is Starbucks’ latest venture into new products outside its coffee retail business. At the Seattle meeting, plans were unveiled for a new single-serve coffee machine set for launch before the next winter break.

A few weeks earlier, executives released details of the much-discussed Verismo espresso machine, which is expected to rival Nestle’s Nespresso, the king of the home espresso.

Elsewhere, Starbucks is currently in an experimental phase of beer and wine sales in its retail outlets, and is continuing to develop plans for its assault on the $50 billion health food industry.

The company also recently opened its first Evolution Fresh fruit and vegetable juice chain, with plans for more outlets in the works.

Key Statistics - Global Energy Drink Market (source: MarketLine)

  • Demand for energy and sports drinks worldwide is forecast to grow at an annual rate of over 10% between 2011 and 2016.
  • Energy drinks accounts for the largest part of the global functional drinks market with over 57% of total value.
  • In 2010, energy drinks sales were the most profitable in the global functional drinks market, with total revenues reaching almost $28 billion.

By James Mulholland for
James Mulholland is a Paris-based internet and broadcast journalist specializing in sports, current affairs and technology news, while also freelancing as a photographer.

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