Transcript:
Consumers these days crave high quality and sustainably sourced coffee. We’ve entered a glory age of coffee where more consumers are enjoying coffee on the go, and it’s not uncommon to have your specialized coffee order memorized by heart. How does a global coffee chain innovate within this space and keep pace with changing consumer demand? I’m joined by Mandy Lozano, who’s director of business unit operations at Nestle Starbucks Coffee. She’s responsible for marketing and developing the strategy behind marking Starbucks consumer products globally and food service products globally as well. Mandy, thank you so much for being here. And welcome back to Darden. – Thanks Mercedes, it’s really great to be here. – Absolutely. – Appreciate it. – Now, first question for you is, the world of food service is something that’s not very familiar with many of consumers today, so I’m curious to hear from you, how you would define food service and where you think the biggest strategic opportunities are for Nestle Starbucks. – Cool. So food service is simply put, defined as any place outside of a cafe and outside of your home where you get coffee. So, for example, I flew here on United Airlines, and I could’ve had a cup of coffee on that flight. So that’s an example of food service. Hospitality, right? Hotels, in your workplace, in your office, in your kitchen where you get coffee every morning in your workplace. Also, at universities, and so many other places. So there are literally millions and millions of points of distribution for food service. A great example for Starbucks and the upside that we have is that there’s about 6,000 or so hospitals in the country, which is a really important place to get a good cup of coffee, right? Think about if you’re a nurse, or if you’re a patient, or if you’re someone visiting a patient. It’s nice to have that cup of coffee. And so, we’re in only about 700 of those. So that’s just tons of white space for us. So it’s pretty exciting. It’s something people don’t often think about, but it is definitely a lot of opportunity for Starbucks. – There’s definitely, I think, some other retail channels that come to mind first of all, but it’s important to know that that’s another opportunity too. – Yeah, yeah, there’s quite a lot. – And secondly, I’m sure you’ve heard this before, but Starbucks is one of the most coveted and regularly used customer rewards programs. – Yes it is. – What advice do you have for businesses who are looking to launch their own. – Wow, it’s cool that I’m being asked for advice. So, firstly, I’d say, there is a bar that has been set. By both the Starbucks rewards program and also things like Amazon, the fact that I can buy something online with literally one click of my finger on my phone, it’s so amazing. So you gotta make it so that it’s a very low barrier of participation for folks, if you are to have some kind of rewards program. So make it automatic. Make it part of something that they do. Secondly, test it and learn from there. Make it perfect for 10 people before you go about making it for 10,000. And then, lastly, I would say, use the data that you’re getting from it. That’s something that you know, it’s a burgeoning field, I know that Darden, we focus on this more and more as well, what do you do with this richness of data that we’re getting about our consumers and about what they’re doing? You can really use that to your advantage and to their advantage to deliver something to them that they want. So it’s a pretty exciting field, yeah. – Absolutely, thank you for the advice. – Sure. – And lastly, the majority of Starbucks products are comprised of coffee and milk. How has Starbucks taken a commodity product like coffee and built a global business from it? – Mercedes that is the nearly 30 billion dollar question. (laughing) So, I’d say we did it in a few ways. One, we created an experience around it. Howard Schultz was inspired by the cafes of Italy and he brought that back to the United States and put a spin on it that I think is very uniquely American that has now then expanded back out to the world. So it’s pretty exciting. Secondly, the way we did it was really important. You know, one of the first companies to offer healthcare to baristas who work just 20 hours a week. Or, speaking out on LGBTQ issues. Things like that. Standing for what we do on sustainability. All those things I think, it was the way that we decided to be a coffee company was probably one of the most powerful things. Yeah, so I’m really proud of it. – Absolutely. There is something special about going in to a Starbucks store and that experience. – Yes, yes. – Drinking coffee, being with your friends. – Yes, and did you know that one of the reasons that people return, about a third of the, sorry, two-thirds of the reasons that people come back to Starbucks is because of the experience they have with a barista. And that personal connection that happens when they say, you know, tall latte for Mercedes, and they hand it to you. And they make eye contact. That is literally two-thirds of the reason someone will come back. And we’re super proud of that. And we try to do everything we can to make sure that that person on the other side in that green apron who’s handing you that coffee is really having the best experience that they can as well. – Absolutely. Well, thank you so much for coming today. And we hope you come back to grounds again soon. – Thank you, it’s awesome to be here. I appreciate it. Up next
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