Starbucks is opening a new type of store and, for the first time ever, baking food in-house at certain locations, thanks to a partnership with a trendy Italian bakery.
On Thursday, Starbucks announced a partnership with artisan Italian bakery and restaurant Princi.
In 2017, new Starbucks Roastery locations will begin baking Princi in-store, a first for the chain. Additionally, Princi will be the only food served in Starbucks Reserve-only stores — a brand new Starbucks store format, which will open next year.
“This will be the first time in our 45-year history that we will actually be baking in a store,” Starbucks CEO Howard Schultz said in a call with reporters on Wednesday. “The Roasteries in New York and Shanghai, and others that will be announced in coming months, will have a fully-integrated bakery operation in the facility, not unlike what we’re doing in terms of roasting.”
Schultz said that Princi’s “intoxicating, seductive” environment made it the perfect pick as a partner for the next evolution of the Roastery experience.
The first location of the “chic bakery” was founded by Rocco Princi in 1986, and has since expanded to four locations in Milan and one in London. As part of the partnership and investment, Starbucks will assume the role of licensee in new Princi stores, with plans to open a number of standalone Princi locations worldwide, including one in Seattle in 2017.
In recent years, Starbucks has doubled down on quality and more gourmet fare. In an effort to grow its premium coffee business, the company debuted the functional and theatrical Reserve Roastery and Tasting Room in December 2014. Today, there are nearly 2,000 Starbucks Reserve cafes, selling the company’s premium coffee line along with the traditional Starbucks menu.
Now, it seems the chain is trying to do the same thing to food as it has done to coffee.
Starbucks Reserve-only stores are key to what Schultz calls “the next evolution of the Starbucks Roastery experience.”
“Given the response we’ve had to the Roastery and Reserve coffee, we believe that there’s an opportunity to build a coffee-forward store,” said Schultz. “This is an opportunity for us to elevate food in a way we never have before.”
The Reserve-only stores will be larger than the typical Starbucks (150 versus 300 square meters) and feature the highly-visual Roastery bar offers five different methods of coffee preparation. Starbucks did not provide any numbers on how many Reserve-only stores were planned, though Schultz said there were “hundreds of opportunities in both Reserve stores and Princi stores in the US alone.”
Unlike current Reserve stores, Reserve-only stores will exclusively serve Princi food. They will also only offer Starbucks small-lot Reserve coffee, instead of serving both Reserve and more common brews.
The Reserve-only stores and the partnership with Princi represent a new step in Starbucks’ obsession with quality, following in the footsteps of the Roastery.
“The success of the Roastery in Seattle has really opened up the aperture of our enthusiasm and our strategic push to elevate at almost every level the premiumization of the Starbucks customer experience going forward,” said Schultz.
As the chain opens more Roasteries, they serve as increasingly important testing grounds for Starbucks. While the vast majority of Starbucks locations will continue to serve La Boulange Bakery items, Princi provides a chance to explore a new approach to food.
When Starbucks bought La Boulange in 2012 for $100 million, it acquired all the bakery’s recipes. When the chain shuttered in 2015, these recipes proved to be more valuable than La Boulange 23 locations, helping Starbucks boost its food business in the double-digits every year since the acquisition.
Just because Princi is only going to be served at Roasteries and in Reserve-only stores initially does not mean the bakery’s ideas and recipes will be contained to a handful of locations. Starbucks cold brew started out as a test at the Roastery before rolling out nationwide in summer 2015; Nitro Cold Brew was a Roastery test before rolling out to 500 locations this summer.
Still, don’t expect artisan Italian baked goods to show up at your local Starbucks any time soon. Reserve-only stores and Princi may be the future of Starbucks, but Schultz says that they represent a growing segment of premium locations, intended to co-exist with — not replace — Starbucks locations across the world.
“It’s not we’re fixing something that’s broken,” said Schultz. “Quite the opposite. We’re elevating the food experience in key, new locations that will be a premium, coffee-forward experience… We’re talking today about a small segment of an opportunity that over time will be much bigger.”
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