Following the September announcement of Starbucks’ reinvention plan and several changes coming to its cafés, Starbucks raised its long-term revenue outlook.

The company plans to spend around $450 million in 2023 to renovate its cafes with new machinery that will streamline operations and speed up service.

In his final investor speech, outgoing Chief Operating Officer John Culver said, ” We constructed our physical stores for a previous age, and we have to update to meet this moment.”

Within the next few years, the company will introduce automated in-store ordering at stores throughout the United States as part of the renovations, allowing staff to concentrate on making drinks rather than operating the cash register. Additionally, the business will keep advancing its Starbucks Rewards program and mobile ordering features, which nearly 30 million Starbucks consumers utilize in the United States alone.

In the chain’s third fiscal quarter, drive-thru, delivery, and mobile orders generated 72% of its domestic revenue, an increase of 9% from the previous quarter.

The chain plans to construct 2,000 new stores in response to this growth over the next three years, including pick-up-only and drive-thru-only formats.

New cold beverage technology

Starbucks has also announced a cutting-edge new cold beverage technology that will quicken the rate employees can make cold beverages. Currently, 60% of all Starbucks beverage sales are made up of iced drinks, such as cold brew and Apple Crisp Oatmilk Frappuccinos, with the percentage rising to 75% in the summer.

The new system will have automatic dispensers for items including milk, whipped cream, and ice. The system has gone through testing at an unidentified Starbucks location. The company has recently started releasing a new hot coffee machine that can grind and pour a fresh cup of coffee in less than 30 seconds. It’s working on building a quicker, less labor-intensive cold brew-making device.

The technology will improve how the company makes cold brew coffee, which has become a $1.2 billion income generator. The process currently takes more than 20 phases and 20 hours to complete. The novel approach grinds and presses coffee beans mechanically while producing 15% less waste.

Baristas will not batch boil coffee every half hour. The following year will introduce a machine that grinds and brews a single cup of coffee in 30 seconds. Even while sales of cold drinks are rising, the company still gets 15 million orders for brewed coffee each month.

 

Why the Starbucks’ reinvention plan is necessary

During the investor day presentation, Starbucks stated that the company created the automated technologies partly to lower staff stress levels. The corporation, which had its biggest employee turnover rate since 2021, places a premium on employee satisfaction.

Baristas won’t need to scoop ice, pour milk from a gallon, or squat to add whipped cream to beverages. That’s thanks to the company’s new cold beverage system. The new technology, which uses dispensers, cuts the time it takes to make a Mocha Frappuccino in half. A follow-up test of the product will be conducted in January following improvements made in response to customer input.

Additionally, Starbucks employees from coast to coast have been stepping up their efforts to organize a union in recent months. Currently, partners at more than 230 Starbucks stores around the U.S. have voted to unionize. They’ve cited challenging working conditions, inadequate compensation, and a lack of personnel as justifications.

 The process of food preparation is also evolving. Items like Starbucks’ prepared sandwiches and eggs will now batch-cook to maintain humidity.

 

It’s not certain whether the automated improvements will be sufficient to win back the chain’s employees. But Starbucks’ continuous expansion demonstrates that customer acclaim for the company is higher than ever.

 

Culver predicts that US stores will also automate ordering in the upcoming years. According to Starbucks, the move toward automation will free up staff members’ time. That will allow client interaction and relieve staff of the routine aspects of their jobs.