Starbucks’ initial launch of Oleato will bring three olive oil beverages to stores across Italy.
Source: Starbucks
Starbucks has a new way of treating coffee: olive oil.
The coffee giant will launch its “Oleato” line in its roughly two dozen Italian locations on Wednesday and plans to bring it to Southern California this spring. The UK, Japan and the Middle East will follow later this year.
Oleato, according to Starbucks, means “with oil”.
The idea was born out of a trip outgoing CEO Howard Schultz took to Italy this summer, where he witnessed Sicilians drinking olive oil as a daily ritual. He too started drinking olive oil alongside his daily coffee and decided that Starbucks should try to mix the two.
Schultz teased the company’s earnings report earlier in February, calling it “alchemy” and a “game changer.”
Rich, luxurious, golden
The initial line of Oleato drinks will infuse olive oil into Starbucks’ Caffé Latte, Iced Shaken Espresso and cold foam. To make a latte, Partanna olive oil is steamed with oat milk, shaken in an iced espresso drink and infused into a vanilla sweet cream foam to create a “golden” foam that decorates cold drinks.
A press or spoon of Partanna olive oil will also be available as a way of dressing the drinks.
“It makes the drinks richer,” Starbucks chief marketing officer Brady Brewer told CNBC. “The word a lot of people use is ‘luxury.’
One of the main ways Starbucks customers customize their coffee is by changing the texture, Brewer said. The cold foam, launched by the coffee chain in 2018, is one of the most ordered modifiers as consumers switch to drinking more iced drinks.
Cold drinks accounted for more than three-quarters of beverage orders in November. In particular, iced espresso drinks are Starbucks’ largest category by sales volume and its fastest growing segment, which is why the company decided to include Iced Shaken Espresso in the Oleato market.
Oleato drinks could also appeal to health-conscious consumers, Brewer said. Studies suggest that consuming olive oil can reduce inflammation and help heart health. Celebrities including Kourtney Kardashian have endorsed drinking it, while startups like Saint Supply sell their own olive oil exclusively for drinking, not cooking.
Schultz’s Long Goodbye
Consider the performance a parting gift from Schultz, whose third stint at the helm of the company ends in April. Novice Laxman Narasimhan will follow after spending months at Starbucks learning the intricacies and pitfalls of the business. Schultz he told CNBC he will “never return” as chief executive in September.
“As I prepare to pass the mantle of leadership to Laxman and the rest of the Executive Leadership Team, it is my deepest desire to share this moment of inspiration and love with you,” Schultz wrote in a letter to employees on Tuesday.
The launch of Oleato is a callback to Schultz’s first trip to Italy in 1983 when he was Starbucks’ marketing director. While there he frequented espresso bars and was inspired to try to bring the same culture back to the U.S. His bosses didn’t agree with the idea, so Schultz created his own chain of coffee shops called Il Giornale and eventually bought Starbucks and merged the two chains. and growing the company into the giant it is today.
There are echoes of Schultz’s latest transition from CEO.
In 2016, he led the push to open Reserve Roasteries around the world and stepped down to focus on that mission. The upscale coffee shops were meant to help Starbucks compete with Intelligentsia Coffee and Blue Bottle Coffee. However, Schultz’s successor, Kevin Johnsonscaled back the original ambitious plans to build several dozen Reserve Roasteries in favor of focusing on other priorities.
