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1.3 MB
Extraction Summary
3
People
8
Organizations
0
Locations
2
Events
2
Relationships
3
Quotes
Document Information
Type:
Financial research report excerpt
File Size:
1.3 MB
Summary
This document is a page from a Cowen research report discussing the likelihood of Starbucks adopting CBD oil in its beverages. While acknowledging Starbucks as an innovator, the report notes significant regulatory hurdles and operational challenges, concluding that while Starbucks might be the first major player to pilot it eventually, there are no near-term plans.
People (3)
| Name | Role | Context |
|---|---|---|
| Kevin Johnson | ||
| Charles | ||
| Michael Cella |
Timeline (2 events)
Interview with CNBC
Starbucks Evenings program (2010-2017)
Relationships (2)
Key Quotes (3)
"We Would Expect Starbucks To Be First Under Our Active Coverage To Pilot CBD Oil, Though Not In Near Term Plan"Source
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Quote #1
"Starbucks CEO Kevin Johnson cited no plans to introduce CBD-based beverages in the near term, but did not dismiss the notion of ultimately piloting the ingredient."Source
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Quote #2
"SBUX would need to gain clarity around potential liability this entails around selling cannabis-infused beverages before introduction."Source
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Quote #3
Full Extracted Text
Complete text extracted from the document (2,245 characters)
COWEN
COLLABORATIVE INSIGHTS
February 25, 2019
COLLABORATIVE INSIGHTS
February 25, 2019
We Would Expect Starbucks To Be First Under Our Active Coverage To
Pilot CBD Oil, Though Not In Near Term Plan (Charles)
Pilot CBD Oil, Though Not In Near Term Plan (Charles)
Under our active coverage, we would categorize Starbucks as the most forward thinking
with beverage innovation relative to Dunkin’, Tim Hortons and McDonald’s McCafe.
Starbucks has launched matcha and nitro cold brew on a widespread basis in recent
years, among other wellness-based offerings. During an interview with CNBC last
month, Starbucks CEO Kevin Johnson cited no plans to introduce CBD-based beverages
in the near term, but did not dismiss the notion of ultimately piloting the ingredient.
with beverage innovation relative to Dunkin’, Tim Hortons and McDonald’s McCafe.
Starbucks has launched matcha and nitro cold brew on a widespread basis in recent
years, among other wellness-based offerings. During an interview with CNBC last
month, Starbucks CEO Kevin Johnson cited no plans to introduce CBD-based beverages
in the near term, but did not dismiss the notion of ultimately piloting the ingredient.
Despite early traction with craft/independent coffee shops, regulators in several states
recently banned CBD as an additive. The dynamics are fluid, likely delaying adoption
from major coffee players like Starbucks in the near term. That said, we acknowledge a
longer-term opportunity if coffee shops are able to properly measure and disclose the
CBD levels in their coffee, as bottled CBD beverages that disclose CBD oil levels in
packaging are not restricted under the current ban.
recently banned CBD as an additive. The dynamics are fluid, likely delaying adoption
from major coffee players like Starbucks in the near term. That said, we acknowledge a
longer-term opportunity if coffee shops are able to properly measure and disclose the
CBD levels in their coffee, as bottled CBD beverages that disclose CBD oil levels in
packaging are not restricted under the current ban.
Should the regulation of CBD oil as an additive to food/beverage change or craft/
independent coffee shops find a way to comply with the existing regulation, we could
envision Starbucks ultimately piloting the ingredient. We believe Starbucks would need
to better understand the science behind the ingredient, in addition to the standard
evaluation of any new SKU around supply chain availability as well as meeting
Starbucks’ high speed of service standards. Furthermore, given Starbucks’ heavy
reliance on the drive-thru business at more than 50% of sales and 80%+ of ongoing
development, SBUX would need to gain clarity around potential liability this entails
around selling cannabis-infused beverages before introduction. We note in 2010,
Starbucks launched an Evenings program that sold beer and wine inside of participating
restaurants. The initiative ultimately scaled to over 400 locations before the program
was terminated in 2017.
independent coffee shops find a way to comply with the existing regulation, we could
envision Starbucks ultimately piloting the ingredient. We believe Starbucks would need
to better understand the science behind the ingredient, in addition to the standard
evaluation of any new SKU around supply chain availability as well as meeting
Starbucks’ high speed of service standards. Furthermore, given Starbucks’ heavy
reliance on the drive-thru business at more than 50% of sales and 80%+ of ongoing
development, SBUX would need to gain clarity around potential liability this entails
around selling cannabis-infused beverages before introduction. We note in 2010,
Starbucks launched an Evenings program that sold beer and wine inside of participating
restaurants. The initiative ultimately scaled to over 400 locations before the program
was terminated in 2017.
This report is intended for michael.cella@cowen.com. Unauthorized redistribution of this report is prohibited.
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