Please ensure Javascript is enabled for purposes of website accessibility

Starbucks CFO: Food Is a Huge Opportunity

By Tom Gardner – Apr 8, 2013 at 6:31PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Part of The Motley Fool's chat with Starbucks CFO Troy Alstead.

In the video below, Motley Fool CEO Tom Gardner sits down with Starbucks (SBUX 1.15%) CFO Troy Alstead during a recent visit to Starbucks headquarters in Seattle. In this portion of the video, they discuss the big opportunity for enhancing the food offerings at Starbucks through the acquisition of La Boulange.

A full transcript follows the video. 

Starbucks is one of Tom Gardner's favorite stocks, but you can never have too many great companies in your portfolio. If you're looking for more ideas, our chief investment officer has selected a different stock as his favorite for this year. Find out which stock it is in the brand-new free report: "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company. 

Troy Alstead: Food is a critical part of our business. It's a long-standing, core part of that coffeehouse experience, and yet we've recognized we have opportunity to do more in food.  

Food represents about one-third of our transactions in our stores across our system today, meaning of all the transactions, the rings through the register every single day in our stores, one-third have a food item on them. What that tells you is two-thirds don't. That's the opportunity. Of those two-thirds who don't have food on them, we've already brought the customer in the door, we've acquired them, and we don't have to pay to get them in. We know they want to be at a Starbucks and they want to experience what we have to offer them, and many of them want food.

Our opportunity is to really innovate against the quality of the food, the appearance and how we merchandise it, how they engage with the food when they come in the store, how our partners inspire them to want the food that's there, to create that opportunity for us to attach more food items on to those hundreds and hundreds of beverage transactions that we have for our average store every day.

We've made great progress over the last several years and slowly but surely elevating food, driving food as a quality of our business, growing it faster than our overall category ,and yet the La Boulange acquisition allows us in ways that we've been excited about for a long time now, to step-change that.  So over the next two to three to four years, I would fully expect within the store system, food with La Boulange as a catalyst, to be the No. 1 driver of comp growth as we go through the next few years. 

Tom Gardner owns shares of Starbucks. The Motley Fool recommends Starbucks. The Motley Fool owns shares of Starbucks. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Stocks Mentioned

Starbucks Stock Quote
$103.37 (1.15%) $1.17

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.