Starbucks says oatmeal is its most successful food product launch to date

Starbucks marketing veep Michelle Gass says the oatmeal is the "hero" of its new health-oriented breakfast menu launched in early September, but other items are also contributing to rising ticket sales for food. "We have seen the entire food business lift," she said, adding that margins on oatmeal are among the highest on all of its food items. "We believe we have hit a home run." || Starbucks says oatmeal is its most popular food

Comments

[James the Barista]

Don't be fooled by this article, it's not saying what you think its saying.

Oatmeal isn't our most popular food item, its only creating the highest revenue overall (in the company) due to its margins.

Most stores sell more donuts then oatmeal, however the profit Starbucks makes off a single sold oatmeal is through the roof. It also helps that Oatmeal is one of few offerings found through the country unlike most regional offerings that is drastically different place to place. If every store has a product and it does mediocre, its still dubbed a success due to the volume of product sold overall not on units sold daily in individual stores.

What are we comparing Oatmeal to?

[seventysix [76]]

I bet this has NOTHING to do with the recent prediction of a poor fourth quarter...

Hm.

[latteart]

To tell you the truth, on the slightly chilly mornings the oatmeal is flying! I can imagine that it will continue as the fall gets colder and we move into winter and people are looking for something to warm themselves up.

[spence]

It's still hot where I am yet the Oatmeal is selling. Yes, we sell more donuts than anything else but oatmeal is already a close second. GO OATMEAL. And unlike the donuts, we never throw it out.

[imzelda]

Say what you will about oatmeal, it's selling here in Arizona, where it's still in the mid 90's everyday! All you have to do is ask, it's only as successful as your partners want it to be!

Those of you who are so down about Starbucks making money amaze me! Every business has to have sales and show a profit, otherwise, they can't stay in business. It you haven't noticed, our economy is suffering critically, worst since the depression!! I will continue to push oatmeal and anything else that rolls out. I want to make sure that Starbucks continues to be profitable so that I still have a job!

[latterose]

I tried the oatmeal for the first time last weekend, and was pleasantly surprised. I'd get it again.

[anon]

My oatmeal was mushy.
Not the best but if you are in a hurry and want a healthy breakfast, it's a great item.

[Lee Blend]

Another thing about oatmeal is that it does not expire at the end of every day, no markouts unless it is somehow made wrong.. This alone saves thousands...

[Hirayuki]

I'm restricted to whole-grain starches and no sugar, so this is the only thing on the Starbucks food menu that I can eat (with nuts). It's nice to have *something* I can eat over there, even if it's only *one* thing. And it does taste good, especially (as was pointed out) on chilly mornings.

[spence]

Imzelda,
I'm with you. My morning ticket sales is usually in the mid 5's and thats with a lot of drip coffee sales.
An attractive pastry case and sampling is the key. I sample often.
Although the oatmeal is selling, we can't hold people down to make them order the Vanilla plus protein and that might be the only way they would do it.
So.... bring on the warming oven. I'm ready.

[Me]

Well, I guess it must be much more a success in the warm south than it is in the cold north. At least in my store (canada) we don't sell them at all. The only really good thing about it is the mentioned markout rate which is non existent beyond the marked out samples. So businesswise it is a HUGE success, since we have no markouts and an obscene margin. And even so it doesn't "fly off the shelves" at all here, it does no one harm (well, at least if you do not consider it taking up space on your counter anyways).

[Sarah]

I was too rushed for breakfast before I left the house this morning so I decided to try the new Protein Pack. I've got to say, I really enjoyed it. It was the perfect amount of food for the morning.

My only complaint was the peanut butter. They couldn't spring for natural peanut butter? It was so sugary! I used about a fifth of the packet.

Still good though. Good option.

[Hirayuki]

I only wish we had the Protein Pack here in metro Detroit, since it would be just about perfect for me. I guess we're not one of the "selected markets" for it.

It just amazes me that people are willing to pay the price for the oatmeal. They are really paying for the fancy little cup it comes in. We use the same instant Quaker Oats oatmeal you can get 12 packs for $1 at the grocery store, you can buy pre-chopped nuts, dried fruits, and brown sugar as well.

I make oatmeal for myself every morning before I head out to work, and have 4 little kids, so im definitely in a rush just like every other working mom. But its so easy for me to make a bowl of oatmeal to take with me on the road

[uncle howie]

Not only can you make oatmeal at home but you can actually make coffee at home too - and it's also much cheaper!!

Starbucks is about providing uplifting experiences people!!

We will never have a competitive advantage purely on price or product.

Make someone smile. Pretty please?!!

[stephanie]

i tried it...... it was oatmeal.....nothing more nothing less. i think starbucks is trying to reinvent something as simple as sliced bread kind of pathetic imho. Oh well, that pumpkin bread is something amazing though!!!! :)

[James the Barista]

Lee Blend, You're totally correct. Oatmeal (and all its add ins) has a shelf life of one year and while the only cost is shelf space in the backroom markouts are used for sampling.

When Oatmeal first came out everyone snubbed their noses at it, and now both sides of the equation are starting to like it. The investors who like the zero waste, made to order style of it bring more a deli feel to a coffee shop (go to any indie coffee shop they all serve hot sandwiches). The consumers who slowly warm up to anything new at Starbucks are starting to add oatmeal to their routine.

Someone at Corporate was rolling the dice with this one and it'll have to see the quarterly report to see if it worked.

[ShiftyinNV]

"Well, I guess it must be much more a success in the warm south than it is in the cold north. "

Me- It is not a success at my store AT ALL (southwest US, where it's still warm). I had attributed this somewhat to the weather still being summery, but I keep reading reports of people doing well with it in similar places. Also, the signature hot chocolate samples have been a hit with our customers, and you might not think that would be so with the weather still being sunny. We're having difficulty selling people on the whole concept. I think it's because we're a frappucino and toffee almond bar sort of crowd mostly, and people just look at the multigrain rolls and the oatmeal like "whatever". I'm not sure how to sell this to a crowd that seems to mainly be there for treats (this is particularly true in the afternoons, which is mostly when I work).

I said this in another topic, but I am honestly happy to hear it is selling for other people. And as you mention, we don't have to mark it out, so at least there is no real waste involved.

[Ken]

Its the most sucsessful food item for a beverage company? Is it really anything to get that excited about? Its like getting excited about Nike's best selling hat. I've always thought, and still do think that oatmeal was a bad idea. I can't see it sticking around for too aweful long. How long will it take people to get sick of oatmeal? I'm thinking not too long.

[givemeabreak]

They had to say that- We all know the writing is on the wall-

[Me]

I don't like it, but if people catch on, why not.

People get the same drink and food item for breakfast almost every day. so I don't see people getting tired of it IF they like it.

And yes, it is like the nike hat. But I'm sure if there was a side called nikegossip.com they would discuss it there as well. It won't decide about the company's future, but it is a hint of how things are going and how the management handles it. :-)

[dbarista]

I can count on one hand the number of times people have gotten oatmeal at our store since it's launched...

I feel bad when I tell the customer to wait three minutes until they eat their oatmeal, it gets cold FAST. I guess there's nothing we can really do to help that though. I tried steaming some milk extra hot but the oatmeal didn't soak it up well... :(

[spence]

dbarista, Try letting your hot water run about 10 seconds before adding it to the oatmeal. Ours is still quite hot after 3 minutes if we do that. Oh, and put the cover on after adding the hot water. (you probably know that, though. But just in case...)

[waltie]

Oatmeal has been a smash, slamdunk success not just in my store or district, but in my entire region. It's selling like... um... hotcakes.

[cheerio]

$1 for a 12-pack of Quaker Oats? Where the heck do you live??

And really, the same argument could be applied against dining out anywhere. Yes, it's cheaper to make it at home, but you pay for the convenience...the fancy little cup is part of that.

[Customer]

Nothing is as good as Corner Bakery's Swedish oatmeal with all the fixings. I am confused by one thing. Can you get all three of the toppings, or are you only allowed one and have to pay extra for more? The barista I asked didn't know, so I didn't order it.

[Aaron]

James, way to be on the ball. Great comment, especially for the first one in the thread.

[BAYAREABUX]

We're not the toppings police. Just give 'em the toppings. Margin is huge on oatmeal anyway. If you want to go whole hog, 27 pumps or 5 brown sugar packets, be my guest. Even in the midst of the health push, we're still there for all the people who don't do moderation. After all, we're Americans. We're gonna need some extra X Y and Z.

[spence]

Re: Oatmeal Toppings
It's "your Perfect Oatmeal". You can have it any way you want with no additional toppings charges. My favorite is 1 brown sugar and 2 fruit. YUMMMY.
Also, this is not the same as Quaker instant oats. Compare the two packets if you like. Our is more of a Ritz Carlton version of Quaker Oats.

[Ken]

"a Ritz Carlton version of Quaker Oats"

thats something to brag about! That is sort of like saying its the nicest car that Yugo makes.

[Steph]

I loved it! The nuts were just right, and the oatmeal stayed hot/warm for at least half-an-hour. I joked with my dh, "You know that new 'perfect oatmeal?' Well, it's damned near perfect!" I would definitely get it again.

[spence]

Ya know Ken, I don't like White Mochas but I don't dis them just because "I" don't like them.

[Ken]

spence, its not that I don't like oatmeal, I like it just fine, I eat it at home from time to time, all I'm saying, is, its oatmeal. Can you have "gourmet" oatmeal? Its oatmeal. Like serving “Gourmet Cornflakes”, or “your perfect cornflake”. Its oatmeal, not Beluga caviar for god's sakes! If you dress up a turd, all you have is a well dressed turd, that is my point.

[spence]

Okay. Oatmeal is just oatmeal. But, this is the best oatmeal there is. In fact, it is sooooooooo good, it doesn't resemble Oatmeal. As I've been telling my customers, "This isn't your father's oatmeal."

[Ken]

You know what Spence, I admit, i haven't tried the oatmeal yet, and after reading your post, I think I should at least try it, before I say anything more about it. It's only fair. Honestly, I'm not expecting much, so I really hope it exceeds my expectations.

[spence]

Ken,
You are very endearing and likeable.
spence

[kitty]

Oatmeal can be a real treat if you are in the right mood for it and it is made well - reminds me of the mornings when I was little and my mom would make some oatmeal. Definitely comfort food at times.
I've had the Starbucks oatmeal and think it's pretty good stuff. It's different than what you'd get anywhere else.
I get it on the mornings when it sounds good, or I didn't plan or pack anything for breakfast, and have to be at work early.
Starbucks in on the way to work, opens early, and you can get a good cup of plain old coffee and some oatmeal pretty quickly.
Not sure how many other folks are in this situation, but it works for me. I'm just a customer, not in the business or anything...

[Marcus]

I've had oatmeal twice. The first time was pretty good. The second time they put way too much water in. The oats don't have much texture to them.

I prefer steel cut oatmeal boiled to the point that it is gelatinous. I make mine with raisins, salt, and a small amount of cinnamon. I then top it with silk no sugar added soy milk and a small amount of brown sugar. When you boil the raisins with the oatmeal (especially as steel cut takes longer to cook) the raisins have this wonderfully juicy plump texture that contrasts well with the steel cut oats.

Starbucks could do that to an extent if they put the dried fruit at the bottom of the cup then added the water and then the oats. But it probably wouldn't make much difference to have the dried fruit exposed to the hot water for just that short amount of time.

I would say, it's good, but if you've had great oatmeal you know that they could do better (especially for 2.75).

[Andrea]

I was given a free sample of the oatmeal w/fruit, and I have to say it was the most awful thing I tasted. I had to add some chocolate powder and cinnamon plus sugar to make it somewhat more decent tasting. I would rather buy a box of instant Quaker oatmeal then to spend the same amount (for a small cup) of money for Starbucks oatmeal. Just my view. I usually buy my breakfast elsewhere and pick up only a coffee at Starbucks.

[Patrick]

My store's consistently outpaced our weekly oatmeal goal by 300-400%! We're not exactly in the South here (Iowa), and EVERY single store in my district shows more than 100% usd every week. We were excited about the oatmeal at my store, and I think it transferred to our customers. It is a far cry more healthy than a piece of coffee cake or doughnut, and people are beginning to realize that. People who are closed-minded to begin with will be expectantly disappointed, just like with anything else in life. Be excited about it! With times like these when nearly every financial company on Wall Street is crumbling, it's nice to see a company innovating and recreating their business.

[Belle]

A question: how are those protein packs (hard boiled egg, mini bagel, fruit, etc) selling? I haven't heard any comments about those since their launch....although I've certainly seen them in the case at Starbucks.

I'd appreciate the feedback!

And spence, the "best oatmeal there is "are steel cut oats. Far superior IMO to any instant. But that's not doable for Starbucks, so perhaps their instant is the best instant.

[mike]

I assume this means successful from a financial point of view. The product itself is awful. I would rather eat the cup it comes in -- it might have more flavor.

MY god! What is the big deal? Just keep the stupid oatmeal on the menu regardless if it is a big hit. Oatmeal is a basic breakfast item. Hell, any hotel with breakfast has all of the stuff Starbucks "launches" on a daily basis for free. geez! time to look at what you really are, Starbucks!

[im out hooray]

The oatmeal is like plain ok oatmeal but the price point here is nonsence.
$4 for 25cents worth. The coffee you can make at home too for sure but there is a belief that starbucks can do premium quality and speciality coffee well so paying a premium for that and the skill of the baristas (however slight) is understandable.
But for adding hot water to instant oatmeal ?? I feel like im being made a fool of.

[Patty]

Come on, people! Starbucks is a business. Businesses exist so that they can make a profit. Of course you can do everything yourself. You could buy an espresso machine, grinder, coffee beans, shot glasses, steaming pitchers, and the milk yourself. Why don't you? Is it not convienent? Is it too much money? Whatever the reason, you venture to your local Starbucks for a brewed coffee or espresso beverage. You can whine and moan all you want, but businesses will always be in the business of making a profit. What's next? McDonalds charging more for a cup of soda than a 2-liter would cost in the store?! *gasp* It's already happened, you say? Oh, the humanity!!!

[cph]

Maybe in the South they could sell "Perfect Grits" :-)

[Ian]

It's instant oatmeal re-packaged, but I have to admit, I'm a complete fan. I tried it the other day and, for some reason I can't explain, I was charmed. It's the perfect thing to compliment a good cup of coffee, and the toppings are excellent too.

My Oatmeal experience is posted on my blog: http://www.thosecoolnewthings.com/?p=229

Ian
www.thosecoolnewthings.com

[espresso=love]

Come on. I can buy 10 packets of oatmeal that I can make at home for the same price as one bowl (or paper bowl, whatever you want to call it) of oatmeal at Starbucks! And no I don't care if I get a tiny packet of brown sugar or dried fruit with it. Not. happening.
Breakfast is not the solution for Starbucks...they seem to think it is, but I don't.

[MissLee]

I freaking love this oatmeal! Yes the margin is huge on it but it is still a super cheap breakfast. I like that I can my perfect "calorie combination" for the day too because all the components are packaged seperately. Even my kids will eat this! And it does NOT cool down fast at all. I love the bowl and lid. Anyhow, I was wondering if anyone knows what oatmeal they are using because I have tried to find a comparable instant oatmeal from the store and I can't!

[MissLee]

Oh, I should add, yeah $4, too much. It was $2.45 when I bought it (in two different states).