BUSINESS + ECONOMY

Inside Starbucks’ plan to speed up service

Sep 14, 2022, 2:00 PM
Starbucks employees striking in front of the store...
Starbucks plans to speed up its' service. Photo credit: Lindsay Aerts/KSL NewsRadio.

(CNN) — Starbucks is rolling out a sweeping plan to spark growth over the next three years — from faster Frappuccinos to more digital rewards.

On tap: New equipment that makes it easier for baristas to prepare complicated drinks in seconds. Thousands of new US stores. A more reliable mobile app with new rewards. And enough new perks and benefits to perhaps dissuade employees from joining a union.

The news came Tuesday during the company’s investor day, when Starbucks leaders spent hours outlining what the next few years will look like.

“We’re not reinventing what we do,” interim CEO Howard Schultz said Tuesday. “We’re just reinventing how we do it.” Schultz will remain in his position until incoming CEO Laxman Narasimhan officially takes the reins in April.

Schultz introduced a broad-strokes version of the new plan in July via an open letter to employees, saying “the Starbucks business as it is built today is not set up to fully satisfy the evolving behaviors, needs and expectations of our [employees] or customers. It is not designed for the future we aspire to for ourselves and the communities in which we serve.”

Faster Frappuccinos

Starbucks has to catch up with its customers to accelerate growth. Over the years, the “business has changed dramatically,” Schultz said.

Customers are increasingly ordering through the company’s mobile app and drive-thrus. They’re opting for cold beverages, which now make up the majority of drink orders. Sometimes they also order TikTok-inspired concoctions so elaborate they make a grande iced vanilla latte seem like a simple black coffee.

These new consumer habits create complexity for employees tasked with preparing time-consuming recipes ordered in person, through an app or at the drive-thru. That means longer wait times for customers — if they decide to wait in line at all.

“One of our challenges today is that we’re not able to meet the capacity of demand that is coming through our stores,” said Brady Brewer, chief marketing officer at Starbucks.

More efficient kitchens and new technology can help baristas work faster, easing those bottlenecks.

One of these improvements is called the Siren System, which among other attributes is designed to cut down the amount of time it takes to make cold drinks. Faster blenders and new dispensers for ingredients like milk and ice are set up in a line, so baristas can prepare the beverage without bending down to reach for milk or whipped cream tucked under the counter.

Baristas spend about 36 seconds making a Frappuccino with Siren, down from about 87 seconds on average with the traditional system. Siren also uses ovens that can heat food in batches, rather than individually, to get food to customers more quickly. Some stores are already using the system as part of a test, but Starbucks plans to start rolling it out more broadly in 2024.

The company also discussed a new coffee machine Tuesday, which makes a freshly ground and brewed cup of decaf or regular coffee in about 30 seconds without paper filters. The machines should be in all US locations within the next three years.

In addition to improving its current locations, Starbucks plans to open 2,000 net new stores in the United States by 2025 — aiming to create a broad portfolio including drive-thru and delivery-only locations.

More rewards and better service

The tech improvements won’t stop in the kitchen. They’re also coming to the mobile app.

Mobile orders have become an important part of Starbucks’ business. The company had about 27.4 million active rewards members in the quarter ending in July, up 13% year-over-year. That’s great — when the app is working.

“As many of you are aware, our mobile app has had a few brief outages over the past few months,” said Starbucks’ Chief Technology Officer Deb Hall Lefevre on Tuesday.

About a quarter of US sales come through digital channels, Lefevre noted. “Even a few minutes of downtime can mean … confusion in our stores and, of course, lost business opportunities,” she said. The company’s first priority is to make the app function reliably, she said: “Things just need to work.”

Starbucks is planning other improvements as well, like allowing customers to use mobile ordering and collect rewards points when visiting a licensed Starbucks location. It’s also working on showing real-time order updates in the app, as well as a joint rewards program with other companies like retailers or airlines.

At the drive-thru, Starbucks is working on “a frictionless payment program that will automatically recognize and authenticate our customers as they pass through,” said Lefevre.

Starbucks also said this week that it would allow rewards members to purchase or earn NFTs starting later this year.

‘A trust deficit’

These tech upgrades, whether in cafe kitchens or payment systems, are designed not only to enhance customer service but to support workers.

For Starbucks, making employees happy is an important part of the plan as it fights the growing unionization effort. As of Tuesday, the National Labor Relations Board has certified votes to unionize at 224 Starbucks stores, and certified that 42 locations have voted against unionization.

Starbucks has made clear it wants workers to deal with the company directly, rather than going through a third party.

“We have a trust deficit with our partners,” said Frank Britt, Starbucks’ chief strategy and transformation officer, on Tuesday. “We have not lived up to the highest level of obligations,” he said. “We plan to do quite a bit about it.”

To that end, Starbucks said this week it will offer eligible employees support managing their student loan debt and help them establish savings accounts. Britt also said the company is working on giving workers more flexible scheduling options, with future plans including more generous sick time and additional mental health support.

Starbucks has said it can only guarantee benefits for non-union employees.

But Starbucks Workers United, which has been leading the campaign, remains unmoved by the company’s plan. The group organized a march outside of the company’s headquarters Tuesday to coincide with the investor event.

“Workers are glad that Starbucks is taking an interest in issues related to our working conditions; we unionized because we would like to have a real voice in this process,” the group said in a statement about the investor meeting. “We look forward to negotiating over these conditions at the bargaining table.”

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

Today’s Top Stories

Business + Economy

A hiring sign is displayed in the window of a Panera Bread store in Pittsburgh on Monday, Jan. 23, ...
Paul R. La Monica, CNN

Jobs report to give further clues about where economy is headed

Economists predict that 185,000 jobs were added last month, a slowdown from the gain of 223,000 jobs in December and 263,000 in November.
14 hours ago
File**People walk past the entrance to a Bed Bath & Beyond retail store along Sixth Avenue in N...
Paul R. La Monica and Nathaniel Meyersohn, CNN

Bed Bath & Beyond says it can no longer pay its debts

The end could be near for struggling retailer Bed Bath & Beyond, as it warned in a regulatory filing Thursday that it received a notice of default from its lender, JPMorgan Chase.
3 days ago
With 24 other states on board, the Utah Attorney General announced on Friday a lawsuit against a De...
Simone Seikaly

Utah leading a lawsuit against new ESG rule affecting 401(k) plans

Utah Attorney General Sean Reyes said the states in the lawsuit are concerned about the federal government's promotion of ESG investing.
3 days ago
savings system right on the money...
Mark Jones

Economists are worried of a recession in 2023, financial expert weighs in

Many economists are fearing a recession in 2023 despite the U.S. economy ending last year better than expected.
4 days ago
A new service called Cottonwood Connect could address parking problems at the ski resorts in Big an...
Kate Davis and Simone Seikaly

Cottonwood Connect offers a new way to get up Cottonwood Canyons

The goal is to fill gaps left when UTA limited ski bus service. The shuttle will run Thursday through Sunday through mid-April.
4 days ago
The U.S. economy expanded at a 2.9% annual pace from October through December, ending 2022 with mom...
PAUL WISEMAN AP Economics Writer

US economy slowed but still grew at 2.9% rate last quarter

Most economists think the economy will slow further in the current quarter and slide into at least a mild recession by midyear.
4 days ago

Sponsored Articles

Banner with Cervical Cancer Awareness Realistic Ribbon...
Intermountain Health

Five Common Causes of Cervical Cancer – and What You Can Do to Lower Your Risk

January is National Cervical Cancer Awareness month and cancer experts at Intermountain Health are working to educate women about cervical cancer, the tests that can warn women about potential cancer, and the importance of vaccination.
Kid holding a cisco fish at winterfest...
Bear Lake Convention and Visitors Bureau

Get Ready for Fun at the 2023 Bear Lake Monster Winterfest

The Bear Lake Monster Winterfest is an annual weekend event jam-packed full of fun activities the whole family can enjoy. This year the event will be held from January 27-29 at the Utah Bear Lake State Park Marina and Sunrise Resort and Event Center in Garden City, Utah. 
happy friends with sparklers at christmas dinner...
Macey's

15 Easy Christmas Dinner Ideas

We’ve scoured the web for you and narrowed down a few of our favorite Christmas dinner ideas to make your planning easy. Choose from the dishes we’ve highlighted to plan your meal or start brainstorming your own meal plan a couple of weeks before to make sure you have time to shop and prepare.
Spicy Homemade Loaded Taters Tots...
Macey's

5 Game Day Snacks for the Whole Family (with recipes!)

Try these game day snacks to make watching football at home with your family feel like a special occasion. 
Happy joyful smiling casual satisfied woman learning and communicates in sign language online using...
Sorenson

The Best Tools for Deaf and Hard-of-Hearing Workplace Success

Here are some of the best resources to make your workplace work better for Deaf and hard-of-hearing employees.
Team supporters celebrating at a tailgate party...
Macey's

8 Delicious Tailgate Foods That Require Zero Prep Work

In a hurry? These 8 tailgate foods take zero prep work, so you can fuel up and get back to what matters most: getting hyped for your favorite
Inside Starbucks’ plan to speed up service