Starbucks CEO Says No to Pot-Infused Coffee…And a $10 Billion Industry
Lately, various coffee shops have been advertising lattes and coffees with CBD oil. However, despite the increase in advertising efforts for Cannabis-infused beverages, Starbucks CEO Kevin Johnson has stated that there are currently no plans by the company to launch its versions of Cannabis-laced coffee drinks.
Speaking in an interview with CNBC’s Squawk on the Street that was aired on January 25, Johnson said:
However, while Starbucks isn’t looking to release any CBD oil drinks, Johnson did say that the company was keeping tabs on other refreshment innovations, including but not limited to its Nitro Cold Brew.
Starbucks Continues to Ignore the Billion-Dollar Industry,
The last 12 months were full of wins for the cannabis and marijuana industry, with some states accepting the legality of marijuana (while some, such as Oklahoma and Utah, legalized it on a medicinal and monitored basis). In addition to increased cannabis legalization in the United States, Canada adopted broad legalization of the substance, while all indications point to the fact that Mexico is set to follow suit as well.
According to cannabis research firm New Frontier Data, legal marijuana in the United States was a $10.4 billion industry in 2018, while cannabis investments within North America hit the $10 billion mark in the same year.
Short for cannabidiol, CBD has also gone mainstream, with bars, coffee shops, and much more adding the substance to their offerings. Thousands of consumers rave about the effectiveness of the substance, saying it helps calm them down, ease pain and induce better sleep.
Still, Starbucks has continued to ignore the upsurge in the CBD oil trend. It is speculated that the company is looking not to run afoul of any federal safety and health laws, as the Food and Drug Administration is still in the process of exploring legal ways for CBD-infused products to enter the American consumer market.
AI and Consumer-Focus Drive Starbucks to Profits
On January 24, Starbucks, the largest retailer of specialty coffee in the world, reported its first-quarter results, with profits and revenues exceeding the estimates of Wall Street analysts. Among other things, this revenue growth was credited to the company’s expansion efforts across China, the Asia Pacific and the Americas.
According to the report, the Seattle-based coffee manufacturer saw revenues grow to $6.63 billion, signifying a 9.2 percent increase from the $6.07 billion that was reported last year
We are particularly pleased with the sequential improvement in quarterly comparable store transactions in the U.S., underpinned by our digital initiatives and improved execution of our in-store experience.
According to Johnson, the company was able to avoid a repeat of 2017’s subpar holiday sales by integrating artificial intelligence, analytics, and consumer focus into their operations to gain a proper understanding of consumers’ demands. He stated that the major difference between 2017 and 2018 was that in the latter, the company offered fewer limited-time drinks at lower prices.