Recently, CNN reported that Starbucks Corporation‘s is creating a new brand of stores called “Starbucks Reserve-only” which will offer premium, small lot reserve coffee and will be twice as large as the size of the current Starbucks stores. These stores are targeted towards customers preferring more personalized and premium coffee. Starbucks plans to open hundreds of such stores starting next year. These stores will feature manual espresso machines and four brewing methods, allowing customers to personalize their beverages. Demand for gourmet coffee in the U.S. is growing at a fast pace, driven primarily by older millennials who drink gourmet coffee at least once in a week. We believe this upscale chain can enable Starbucks to expand its footprint without losing its “premium” status and tap into the trend of rising gourmet coffee drinkers, thus boosting revenues.
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