Will nitrogen cold extract coffee be the growth driver of Starbucks?

Starbucks plans to offer cold-extracted coffee products with nitrogen in nearly 1500 stores in 26 markets around the world, and the plan is expected to be completed by the end of 2017.

The product, which was first unveiled at Starbucks' Seattle flagship store in 2015, is a cold-extracted coffee with edible nitrogen, which fills the coffee with fine bubbles and makes the taste very delicate.

Nitrogen cold extract in the Chinese market has a special name, called "air-cooled cold extract coffee". The price is as high as 48 yuan and is only available in a few stores across the country. The barista poured the coffee out of a golden faucet, and at that moment the separately stored nitrogen and cold coffee came into contact for the first time, and the whole process looked like ordering a cup of craft beer in Bar.

Since its launch, sales have been growing at a rate of 25% a year, according to Forbes. "the category of iced coffee is heating up." Sandy Stark, senior vice president of Starbucks'US beverage category and global innovation, said in a press release, "We have been selling ice drinks, but with the launch of cold-extracted coffee products into nitrogen coffee products in 2015, we see iced coffee becoming a year-round drink, and the seasonality is weakening."

According to Starbucks' latest earnings report, Starbucks' same-store sales in the United States grew by just 3% last quarter, down from 7% in the same period last year, while Starbucks seems to think that the new coffee experience of nitrogen cold extraction and higher prices will help cope with the slowdown in the US market. However, with regard to the air-cooled extract listed on the Chinese market, the current feedback from consumers seems to be inconsistent. Some think that it has the taste and quality of individual coffee, more people may not be used to drinking it, and feel that the price of 48 yuan is a bit too high.

However, since nitrogen and cold coffee are usually stored in buckets behind the counter, not all Starbucks stores have enough space for these devices, which may be an obstacle to adjusting the product line. For all catering brands trying to keep up with consumers, space can be a problem for product innovation. For example, McDonald's recently offered freshly made beef patties in its stores, matching kitchen assembly lines and new barbecue utensils may become a new burden.

In addition to cold coffee, Starbucks is also considering adding nitrogen to products such as Flat White and peach tea, but these new products are still in testing, according to Bloomberg.

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