Because of course, Starbucks (NASDAQ: SBUX) needs to open a new bakery. After all, it did so well the last time after it bought La Boulange that it ended up closing them all down.
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So what makes the coffee shop think it will do any better this time around? Money.
The new Princi "boutique bakery and cafe" will feature high-end baked goods from master baker Rocco Princi, and the first one will be housed in Starbucks Roastery, the equally pricey Seattle coffee shop and late-night dining joint. In short, Starbucks wants to go upscale.
Delusions of grandeur
The coffee chain has always thought of itself as more than just a pedestrian place to get a cup of joe. It began investing in these ideas in earnest when it opened up Starbucks Evenings in 2010 as a place you could buy wine, beer, and small plates in addition to coffee, but after rolling them out nationally in 2014 -- the same year it opened the Seattle Reserve Roastery & Tasting Room -- it closed them down this past January.
Yet from these experiments grew the idea of a truly exclusive coffee experience. Enter the Reserve store, an upscale cafe that will be similar to the Roastery in ambiance and have a footprint twice as large as the typical Starbucks coffee shop, but will serve food made fresh on premises, including pastries and pizza made from Princi.
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About 20% of these stores will be an even bigger premium experience, the Reserve bar, where, instead of Frappuccinos, smoothies, and the usual Starbucks drinks, you're served upscale, small-batch coffees that are the result of brewing techniques using decidedly specialized equipment, such as siphon and nitrogen brews.
In that respect it's more like a craft brewpub, but where it's not uncommon for a 12-ounce cup of coffee to cost $10.
Putting it all on the table
Which makes it a perfect spot for the new Princi cafes. Starbucks wants to open 1,000 Reserve cafes around the world and each one will have a Princi bakery inside. There will also be stand-alone bakeries as well.
The rationale behind the enhanced premium experience is these stores make more money. Last year Business Insider said a Reserve cafe generated about $3 million annually in revenue, about twice what a typical Starbucks makes, which, it noted, would make only Chick-fil-A a more profitable restaurant chain.
About 20% of Starbucks' revenue comes from food, a number that has only grown slowly over the years despite repeated attempts to have customers think beyond the coffee pot.
Yet Starbucks has had high hopes before about its food plans, once promising to open as many as 400 La Boulange cafes in five years. When it closed them in January, it described them as "not sustainable for the company's long-term growth."
A moveable feast
Whether Starbucks can be more successful this time is up for debate, premium pricing notwithstanding. While the food will be fresh-baked on premises, the Princi cafes won't feature any menus and the food will change throughout the day depending upon what's available, meaning customers won't know what they'll be able to get when they go in. While some customers might like the treasure hunt aspect of the restaurant, seemingly most people, like those who go to Starbucks for the same coffee day after day, will want regularity in their food, too.
Starbucks actually has a very poor track record when it comes to moving beyond its comfort zone of coffee. Evolution Fresh juices, La Boulange bakeries, and Teavana tea houses all came to naught. So did its Evenings locations for alcoholic beverages. While its grand plans for a cafe would seem a natural fit for its craft coffee shops, maybe Starbucks would do better sticking to what it knows best: Brewing a good cup of java.
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