Starbucks Is Helping You Take Your Tea Like Oprah

Source: Thinkstock

Source: Thinkstock

Starbucks (NASDAQ:SBUX) is partnering with Oprah Winfrey to push its tea sales — because if anyone can make tea happen, Oprah can. The media mogul and the CEO of the world’s largest coffee chain clinked cups at the company’s annual meeting on Wednesday, Reuters reported, and it was there that Starbucks announced it will debut a new tea-based drink created by Winfrey called “Oprah Chai.” The new brew will go on sale at Starbucks and Teavana stores in the U.S. and Canada on April 29.

Fans of Winfrey know that she is a tea enthusiast, and Starbucks chose to partner up with the celebrity and have her brew her own brew. According to Reuters, the Seattle-based chain is looking to push its tea offerings now that the coffee market is so saturated, and it sees no better way to do it than to enlist Winfrey for its team. The celebrity developed her tea with Teavana’s teaologist Naoko Tsunoda and Reuters reports that it is a blend of tea infused with cinnamon, ginger, cardamom, and cloves. It will be sold in tins or as prepared tea lattes.

As Starbucks continues to move into new global markets, it’s important for the chain to keep in mind what its global customers are looking for. Though coffee tends to reel in more sales for Starbucks, tea is the most widely consumed beverage in the world next to water, a reality highlighted by Reuters. Therefore, it is imperative for the company to have a number of popular teas in its arsenal to ensure its consumers don’t go elsewhere. Starbucks acquired tea store chain Teavana Holdings in 2012 for $620 million, and since then, executives have worked to make its tea drinks just as appealing as its coffee ones. Schultz maintained Wednesday, “We are going to elevate the tea experience in the same way we did for coffee.”

It is clear that Starbucks now has a number of new initiatives brewing. Along with its announcement Wednesday that it is teaming up with Winfrey to perfect a new tea, it also disclosed earlier this week that it is expanding its alcohol and light bites menu. Starbucks first began selling alcohol in its Seattle store in October 2010, expanded that test to as many as twenty-five locations in Chicago, Atlanta, and Southern California in January 2012, and is now ready to launch its new initiative in urban areas across the entire U.S. Chief Operating Officer Troy Alstead confirmed the news in a phone interview this week and explained that the coffee company is confident the new menu will eventually significantly boost sales because executives believe consumers will respond well to the new launch that will allow them to pick up their coffee, latte, or pastry, along with their alcohol.

Source: Thinkstock

Add Starbucks’s Oprah Chai and its new alcohol and light bites menu to the fact that the company is now also focusing closely on its digital, mobile loyalty, and electronic-commerce initiatives, and it sounds like the chain has a lot on its plate. However, it’s not surprising that Starbucks is pushing a lot of new innovations as of late, because it certainly has expectations to meet and it still has coffee to sell. Starbucks announced Wednesday that it wants to realize a long-term plan of almost doubling its market value to $100 billion, and that will clearly take a great leap in sales.

Starbucks certainly isn’t going anywhere, but it now realizes that it has to do more than maintain its current success — it has to boost it. And that’s where new tea popularity and alcohol and lights bites come in. According to Reuters, global coffee retail sales were $75.7 billion in 2012 compared to $40.7 billion for tea, and Starbucks wants more of that pot. It also believes that its evening traffic will only increase when alcohol and lights bites become an option. Is Starbucks right? We will see sooner rather than later.

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