Starbucks announced on Tuesday that it is launching new plant-based food and beverage items to its menus in select locations across Asia to meet the growing demand for healthier lifestyles.
Starting this month, Starbucks (SBUX) is adding two new seasonal plant-based beverages, Oatmilk Cocoa Macchiato and Almond milk Hazelnut Latte to store menus in 8 markets, as well as plant-based food choices at stores in Hong Kong, New Zealand, Singapore, Taiwan, and Thailand.
The newly added plant-based food options include products such as burger patties made by Impossible Foods and Beyond Meat (BYND). In Singapore, the coffee chain is adding the Impossible Wrap to the menu which features a plant-based Impossible Burger patty, avocado omelet, mushroom, caramelized onion and cheese. In Taiwan, new menu items include Beyond Meat bolognese penne, the Beyond meat sausage sandwich, and the Beyond meatball sandwich.
“We’re thrilled to offer our customers more ways to personalize their Starbucks Experience and enjoy plant-based choices,” said Sara Trilling, Starbucks Asia Pacific president. “This menu expansion is designed to offer our customers the same flavors and handcrafted service they know and love from Starbucks, in a new way. We’re excited to continue our journey toward becoming resource positive together with our customers in Asia.”
Starbucks said that the Asia Pacific region stands out as the largest region for plant-based milk options due to well-established traditions in local food culture, according to Euromonitor, a global market intelligence company that tracks customer trends. Plant-based options such as soy are strongly ingrained in Asian culture, while consumers are trying out new flavors and modern takes on traditional diets, Euromonitor added.
Starbucks shares have been hard hit hard earlier this year as the coronavirus pandemic led to store closures. The stock has recovered most of its losses and is now trading down a mere 1.9% year-to-date. (See Starbucks stock analysis on TipRanks).
A number of business initiatives, such as curbside pickup, which are tailored to overcome the sales fallout tied to the pandemic, prompted Stifel Nicolaus analyst Christopher O`Cull to raise the stock to Buy from Hold and hike the price target to $90 (4.3% upside potential) from $78.
“Our upgrade reflects our view the company is taking quick, aggressive steps to navigate these headwinds,” wrote O’Cull in a note to investors. “We believe these actions will lead to steady sales recovery in the U.S. and China.”
“Despite its size, Starbucks has been able to accomplish this feat better than almost anyone in the restaurant industry,” the analyst added.
Meanwhile, the rest of the Street is cautiously optimistic on the stock with a Moderate Buy analyst consensus. The $84.11 average price target reflects analysts’ expectations that shares will drop 2.5% over the coming year.
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