Earlier in July, Starbucks(NASDAQ: SBUX) announced it was teaming up with Italian baker RoccoPrincito once again try to perfect its food offerings. It's been down this road before, having purchased a specialty bakery, but it didn't pan out as well as hoped. While it continues to sell its baked goods, the individual stores have all been shuttered.Maybe a partnershipwithout actually having to own the operation will work better.
In this clip from theMotley Fool Moneyradio show,Chris Hill and Simon Erickson talk about the most important things that'll come of this deal and how Starbucks is proving its drive to stay innovative and enjoyable.
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A full transcript follows the video.
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This podcast was recorded on July 15, 2016.
Chris Hill:Starbucksis taking yet another run at trying to improve theirfood offerings. The company is teaming up with RoccoPrinci, a highly regardedItalian baker, to bring artisan bakery items into the storesstarting in 2017.Simon, you look at LaBoulange...I'm not saying it was a flop,but it certainly didn't work out as well as they were hoping.Simon Erickson:Yeah. LaBoulange,obviously, Starbucks, last year,ifinvestors remember, they closed down the 23 stand-alone stores that were offering pastries that Starbucks had an interest in as well. Theinteresting thing to me, Chris,is that they're still selling those pastries in theexisting Starbucks locations. So, I think whether or notPrincicontinues as a stand-alone location in the future or it doesn't,the more important part of this is, are theygoing to continue to sell those foods inStarbucks locations? Keep in mind,food still accounts for about 20% of sales withinall of Starbucks's restaurants. We saw a7% increase in comps last year, so it's still doing very well.Hill:It'll beinteresting to see what happens to throughput as well,because this is the first time that they're actually going to bebaking stuff on the premises. If that has anegative effect on throughput,then I think they might need to rethink it.Erickson:AndStarbucks has always been the third place where you go outside of home and work. The thirdplace isgetting a lot more awesome. They'reopening now roasteries and reserve-only locations,which are multiple times larger than thetraditional ones, but theyhave things like in-store baked goodsand different types of coffee fromareas of the world you wouldn't typically get coffee from.I think they're adding a premium to their brand.I think this is a good move for the company.
Simon Erickson has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.