Starbucks to Launch Seasonal Drinks - Analyst Blog


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Teavana Holdings Inc., the wholly owned subsidiary of coffee giant, Starbucks Corporation ( SBUX ), brings two hot beverages - Teavana's Golden Dragon Yellow Tea and Guatemala Casi Cielo coffee to warm up the winters of its consumers. The beverages will be offered for a limited period only.

The popular seasonal offering Guatemala Casi Cielo coffee has returned back this season for the 10 th season. The hot drink rich in dark cocoa is a hot favorite for its smooth texture and balancing lemony acidity. Casi Cielo coffee is made up of coffee beans grown at altitudes above 1,525 meters. The coffee beans can be brewed for making espresso, coffee press or automatic brewer and will be available in whole bean, K-Cup packs and Verismo pods.

The launch of Teavana's Golden Dragon Yellow Tea will be the company's first yellow tea andwill hit the store shelves on Jan 13, 2014.

Golden Dragon Yellow Tea is made from a rare tea grown in China. The popular Chinese tea is also known for its limited harvest season and crafting process. The cost for this tea is $29.98 per 2 ounces. Customers purchasing 2 ounces of tea will receive a commemorative Golden Dragon Tin.

Starbucks acquired the Atlanta-based Teavana Holdings, Inc., a specialty retailer of tea, for approximately $620 million in cash in fiscal 2012. Teavana is geared to capture the growing U.S. tea market. Per a recent survey conducted by the company, 34% of Americans increased their tea consumption in 2013, and an additional 42% plan on drinking more tea in 2014.

The tea industry is thriving in the U.S. with the tea makers producing newer flavors, strengths and sweeteners. Moreover, the high product differentiation of tea enables the makers to earn high profit margins despite recessive conditions.

The ageing population of America is drawn toward tea for its health benefits and disease prevention qualities. Per the market research firm, Euromonitor, the tea industry is projected to grow 10% by 2017 in terms of on-trade volume.

With the recent dip in temperature, the two rich, aromatic hot drinks are expected to be popular among the Americans, and boost sales in the upcoming quarters. Starbucks has been strengthening its product portfolio with significant innovations around at-home coffee, refreshments, health and wellness, tea and enhancing core food offerings. 

Starbucks carries a Zacks Rank #3 (Hold). Better-ranked stocks in the retail/restaurant sector include Fiesta Restaurant Group, Inc. ( FRGI ), The Cheesecake Factory Inc. ( CAKE ) and Cracker Barrel Old Country Store, Inc. ( CBRL ). While Fiesta Restaurant sports a Zacks Rank #1 (Strong Buy), Cheesecake Factory and Cracker Barrel carry a Zacks Rank #2 (Buy).

CHEESECAKE FACT (CAKE): Free Stock Analysis Report

CRACKER BARREL (CBRL): Free Stock Analysis Report

FIESTA RESTRNT (FRGI): Free Stock Analysis Report

STARBUCKS CORP (SBUX): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: CAKE , CBRL , FRGI , SBUX

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