Starbucks A new line of olive oil-infused coffee drinks could disrupt the industry, interim CEO Howard Schultz told CNBC’s Jim Cramer on Tuesday.
“This is a transformative moment in the history of our company creating a new category, a new platform,” Schultz told CNBC’s “Mad Money.” He said Starbucks’ new olive oil coffee, which he designed after an inspirational trip to Sicily, will increase business over time.
The drinks debut Wednesday at the company’s 25 Italian locations. Schultz believes he will be a “market maker” in an industry that has felt the pressure of tightening consumer demand. The “Oleato”, which takes its name from the Italian word for “with oil”, will arrive in the United States this spring, starting in California.
Along with the olive oil coffee, Starbucks is also unveiling an Oleato Espresso Martini, which will be available in select locations in Italy, as well as Seattle and New York.
Schultz is launching the new coffee line before he leaves in April as interim CEO. New chief executive Laxman Narasimhan will take over, although Schultz, 69, will retain his seat on the board and act as Oleato’s brand ambassador.
“I will carry the Starbucks flag and the American flag around the world for Oleato,” said Schultz, who will complete his third term as chief executive. “But make no mistake, Laxman is the CEO and at the annual meeting on March 23, there is only one executive at Starbucks. That will be him.”
Starbucks’ Olive Oil Coffee comes as the company continues to navigate a challenging macroeconomic environment, though Schultz maintained his optimism. He noted that the company has added about $40 billion to its market capitalization since his start as interim CEO.
Granted, Starbucks raised prices about 5% to offset inflation, but Schultz said he doesn’t expect any further increases.
“I’m not worried about inflation going forward, and I’m maybe the only CEO in America who feels like we’re going to have a soft landing,” Schultz said.
The company has seen a drop in international sales after a resurgence in Covid cases in China led to lower demand in that market. Going forward, Schultz anticipates a rebound for China and for consumer demand in general.
“The wind is at our back,” Schultz said.
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