According to interim CEO Howard Schultz, Starbucks’ new line of coffee drinks infused with olive oil has the potential to shake up the industry.
During an interview with CNBC’s Jim Cramer, Schultz referred to this as a transformative moment for the company, creating a new category and platform. The new olive oil coffee, which Schultz developed after visiting Sicily, will gradually contribute to the company’s growth.
These drinks will debut at the company’s 25 Italian locations on Wednesday and are expected to be a market leader in an industry struggling with declining consumer demand. The “Oleato” brand, named after the Italian word for “with oil,” will be introduced in California in the spring. Starbucks will also offer an Oleato espresso martini in select locations in Italy, Seattle, and New York.
Schultz is launching the new coffee line ahead of his departure as interim CEO in April. Laxman Narasimhan will take over as the new chief executive, but Schultz will continue to act as an ambassador for the Oleato brand and retain his board seat.
Schultz believes that the company’s market cap has increased by approximately $40 billion since he became interim CEO, despite facing challenges in the macro environment. He stated that the company has raised prices by about 5% to offset inflation but does not plan to increase them further. Schultz anticipates that China and consumer demand will recover in the future, and he believes that Starbucks is well-positioned for success.
