Starbucks Is Launching Olive Oil-Infused Coffee in Italy, Plans U.S. Release This Spring

Source: Starbucks
  • Starbucks is launching olive oil-infused coffee in Italy, with plans for a U.S. launch this spring.
  • The new "Oleato" line is the brainchild of CEO Howard Schultz, who is stepping down in April.
  • Schultz teased the release on the company's earnings call earlier in February, calling it "alchemy" and a "game-changer."

Starbucks has a new way to customize its coffee: olive oil.

The coffee giant will launch its "Oleato" line in its roughly two dozen Italian locations on Wednesday and plans to bring it to Southern California this spring. The United Kingdom, Japan and the Middle East will follow later this year.

Oleato means "with oil," according to Starbucks.

The idea was born from a trip that outgoing CEO Howard Schultz took to Italy this summer, where he witnessed Sicilians drinking olive oil as a daily ritual. He, too, began drinking olive oil alongside his daily coffee and decided that Starbucks should try to mix the two together.

Schultz teased the release on the company's earnings call earlier in February, calling it "alchemy" and a "game-changer."

Rich, luxurious, golden

The initial Oleato lineup of drinks will infuse olive oil into Starbucks' Caffé Latte, Iced Shaken Espresso and cold foam. The Partanna olive oil is steamed with oat milk for the latte, shaken in the iced espresso drink and infused in vanilla sweet cream foam to create the "golden" foam that tops cold brews.

A press, or spoonful, of the Partanna olive oil will also be available to order as a way to customize drinks.

"It makes beverages richer," Starbucks Chief Marketing Officer Brady Brewer told CNBC. "The word that a lot of people used is 'luxurious.'"

One of the main ways that Starbucks customers choose to customize their coffee is by changing the texture, Brewer said. Cold foam, which the coffee chain launched in 2018, is one of the most-ordered modifiers as consumers shift to drinking more iced beverages.

Cold beverages accounted for more than three-quarters of drink orders in November. Iced espresso drinks, in particular, are Starbucks' largest category by sales volume and its fastest-growing segment, which is why the company chose to include the Iced Shaken Espresso in the Oleato launch.

Oleato drinks could also appeal to health-conscious consumers, Brewer said. Studies have suggested that consuming olive oil can reduce inflammation and help heart health. Celebrities including Kourtney Kardashian have endorsed drinking it, while startups like Saint Supply are selling their own olive oil expressly for drinking, not cooking.

Schultz's long goodbye

Consider the launch a parting gift from Schultz, whose third stint as head of the company comes to an end in April. Newcomer Laxman Narasimhan will succeed him after spending months at Starbucks learning the ins and outs of the business. Schultz told CNBC in September he's "never coming back again" as chief executive.

"As I prepare to pass the mantle of leadership to Laxman and the rest of the Executive Leadership Team, it's my deepest wish to share this moment of inspiration and love with you," Schultz wrote in a letter to employees on Tuesday.

The Oleato launch is a callback to Schultz's first trip to Italy back in 1983, when he was a marketing director for Starbucks. While there, he visited espresso bars and was inspired to try to bring the same culture back to the U.S. His bosses didn't agree with the idea, so Schultz created his own coffee chain called Il Giornale and eventually bought Starbucks, merging the two chains and growing the company into the giant it is today.

There are echoes of Schultz's last transition from the chief executive job.

In 2016, he drove the push to open Reserve Roasteries worldwide and stepped down to concentrate on that mission. The upscale coffee megastores were meant to help Starbucks compete with the likes of Intelligentsia Coffee and Blue Bottle Coffee. However, Schultz's successor, Kevin Johnson, scaled back the initial ambitious plans to build several dozen Reserve Roasteries in favor of focusing on other priorities.

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