Howard Schultz, Starbucks
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Starbucks A new line of olive oil coffee drinks could disrupt the industry, interim CEO Howard Schultz told CNBC’s Jim Cramer on Tuesday.
“This is a transformative moment in our company’s history that creates a new category, a new platform,” Schultz told CNBC’s “Mad Money.” He said the new Starbucks coffee with olive oil, which he came up with after an inspirational trip to Sicily, would be an addition to the business over time.
The beverage debut Wednesday at the company 25 locations in Italy. Schultz believes he will be a “market maker” in the industry he is in he felt the pressure tightening of consumer demand. “Oleato,” which is named after the Italian word for “with oil,” will come to the U.S. this spring, starting in California.
In addition to olive oil coffee, Starbucks is also unveiling the Oleato espresso martini, which will be available at select locations in Italy as well as in Seattle and New York.
Schultz is launching a new coffee line before he steps down as interim CEO in April. Incoming CEO Laxman Narasimhan will take over the positionthough Schultz, 69, will retain his seat on the board and serve as Oleato’s brand ambassador.
“I will carry the Starbucks flag for Oleat and the American flag around the world,” said Schultz, who will complete his third term as CEO. “But make no mistake, Laxman is the CEO and there is only one leader at Starbucks at the March 23 annual meeting. It will be him.”
Starbucks olive oil coffee comes as the company continues to navigate a challenging macroeconomic environment, although Schultz remained optimistic. He noted that the company has added roughly $40 billion to its market capitalization since he started as interim CEO.
It is certain that Starbucks has raised prices by about 5% to compensate for inflation, but Schultz said he does not expect any further increases.
“I’m not worried about future inflation, and I may be the only CEO in America who feels we’re going to have a soft landing,” Schultz said.
The company saw a decline in international sales after the resurgence of Covid cases in China led to reduced demand in that market. Going forward, Schultz expects a recovery for China and for consumer demand in general.
“The wind is at our backs,” Schultz said.