5 Game Changing Initiatives from Starbucks’ Latest Quarter

Inside Starbucks’ record third-quarter

The java giant is on a first-name basis with success these days. Not only is the stock up

nearly 39% year-to-date, but the specialty coffee retailer has delivered on Wall Street’s estimates in each of the past five quarters. With a balance

sheet flush with cash, here are five game-changing initiatives that should push Starbucks’

stock higher from here.

Equal parts coffee & technology company

• Enables customers to order ahead and avoid in-store lines, thereby helping Starbucks serve more customers more efficiently

• Starbucks will roll out MOP internationally in the coming months

1. Mobile Order & Pay

Improving the customer experience

Things to know about Starbucks disruptive Mobile Order & Pay technology:

Starbucks first rolled out MOP last December in 150 Portland area stores

The innovative mobile capability is now available in over 4,000 U.S. Starbucks locations

MOP is already driving both revenue and profit growth for Starbucks in every market in which it has

been deployed

Partnerships with consumer-facing businesses

• Starbucks has teamed up with music-streaming service Spotify and car-sharing service Lyft as a way for consumers to earn Starbucks rewards stars outside of Starbucks stores

2. Digital partnerships

A win for employees and customers alike

Digital partnerships with Lyft, Spotify, and other like-minded businesses will help Starbucks:

Further reduce its already low cost of customer acquisition

Drive extra incremental traffic to stores Broaden its mobile digital and loyalty platforms

Grand plans for the Asia-Pacific market

• CAP was Starbucks’ fastest growing segment in the third-quarter with 11% comps growth

• Starbucks now has full control of its Japan operations

3. Starbucks now has over 5,200 stores in China/Asia-Pacific (CAP) market

Massive international growth opportunity

Looking ahead, investors can expect big things from Starbucks’ China/Asia-Pacific or CAP channel. Over

the next five years Starbucks is on track to: Double CAP store count to 10,000 locations Triple revenue to more than $3 billion in CAP

Triple operating income to over $1 billion in CAP

Starbucks inks new deal with PepsiCo

• Starbucks has tapped Pepsi to sell and distribute its ready-to-drink coffee and energy beverages in Latin America

4. Strategic distribution initiatives

A new venture between old friends

Things to know about the fresh distribution deal between PepsiCo and Starbucks:

The ready-to-drink coffee market in Latin America is worth $4 billion today and on pace to grow 22% in the

next five years Starbucks and Pepsi first created the North American

Coffee Partnership (NACP) more than 20 years ago The NACP is now a $1.5 billion retail business and

controls more than 97% of the ready-to-drink coffee segment in the U.S. today

Unlocking fresh growth in U.S. market

• Starbucks opened its first express store in New York City in the third-quarter, proving there is far more demand than its current domestic store footprint can handle

5. Innovative new store formats

Evolving store formats

Things to know about Starbucks new on-the-go express store format:

With just 500 sq. feet of space, the new store is now handling volumes they would expect from a

Starbucks location three times its size Starbucks plans to open dozens more express

format stores in New York in 2015 as part of this pilot project

The Next Big Thing to Come Out of Silicon Valley