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TheStreet Open House

Sozzi: Oprah Chai Arrives at Starbucks

Stocks in this article: SBUX AAPL

NEW YORK (TheStreet) -- Today marks the arrival of the well marketed "Oprah Chai" to Starbucks (SBUX - Get Report). Well, actually, that would be #OprahChai to everyone tweeting about it (including myself) on an Apple (AAPL - Get Report) iPhone while waiting in line. The product tie in with Oprah has a great underlying message (it helps support youth education) that makes it somewhat of an easy sell to those wondering about the past few weeks of hype.

I think this was an important product launch for Howard Schultz and Starbucks, so I have done a complete random rapid-fire session with myself after receiving the full #OprahChai experience today.

5 Things the #OprahChai Told Me About Starbucks

  • It's willing to give prime real estate on its menu board (at eye level) to a premium tea. That shows the company's big bet on a product that many will be hard pressed to try since it has very little to no caffeine.
  • Starbucks, consistent with my long held views, is not releasing these new product introductions correctly. Consider this: the Starbucks #OprahChai did not have its own special cup with Oprah badging NOR did it make reference to Teavana, the tea used to make the drink and the company's apparently next big thing.
  • Good and bad here. Starbucks will likely entice those seeking caffeine and having the money to do so to buy both a premium #OprahChai and their usual coffee. However, not too sure that will continue, but obviously a short term same-store sales lift is created.
  • It took approximately two minutes to make an #OprahChai in a non-crowded store. As Starbucks introduces more complex drinks it will have to rework the flow patterns behind the counter, bottom line.
  • Yes, it's weird to order a marketed product sometimes. I ended up asking for "one of those Oprah teas" instead of an Oprah Chai.

Views from the Ground

Bad pic, but the #OprahChai received premium menu board placement.

Oprah Chai

How Starbucks will syphon more money from you...turn up the volume on this Vine to find out!

-- By Brian Sozzi CEO of Belus Capital Advisors, analyst to TheStreet.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.




At the time of publication, Sozzi held no position in the stocks mentioned.

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