Herb Greenberg on Stocks: How Starbucks Is Caffeinating Its Game

SAN DIEGO (RealMoney) -- This is for those who think I never have anything nice to say. Regardless of what you think of Starbucks (SBUX) the stock, you can't take this away from Starbucks the company: Just as it reinvented a commodity when it started, it remains in constant reinvention mode today, as it must be in its role as a mature brand. 

The company signaled long ago that its core coffee-bar business peaked when it started doing a series of acquisitions, including for Evolution Fresh, La Boulange and Teavana. 

Changes like those are why Starbucks plays a key role in Lloyd Shefky's book, Invent, Reinvent, Thrive -- which was the focus of my LinkedIn piece, "Why It's Important to Reinvent Yourself." 

Reinvention has been a continuous theme at Starbucks, and this is why it's not necessarily worrisome to see a single quarter of below-expectations traffic or comparable-store sales growth at the company.

What's more interesting, from my viewpoint, is Starbucks' continuous moves forward. That's not just in mobile payments, which the company claims are taking a page from Uber -- though its leaps into delivery are even more interesting. Rather, I'm talking about new upscale Starbucks stores.

In all of the handwringing over the weaker-than-expected comp-store and traffic growth, there was little mention of what I found to be the company's most significant comment: Starbucks is rolling out new Starbucks Reserve stores.

Initially, the company plans 100 of these stores, which will feature its rarer "reserve" coffees. Starbucks is already experimenting with the Reserve concept inside existing stores, and it plans to roll this out as a sub brand in 1,500 locations. I recently chatted up a barista at one of the test locations near me, and she said the more expensive Reserves, which are brewed using a different technique from that of traditional drip, were the most popular drinks in the store.

For Starbucks, of course, the question lies in whether the upscale stores will cannibalize existing stores, or whether they'll draw new customers from local coffee shops, many of which roast their own coffees. The company won't know if it doesn't try, though -- and that is part of reinvention. That said, we have learned this much about cannibalization and Starbucks: If opening up stores across the street from itself in the early days didn't cannibalize existing stores to the point of extinction, then this isn't likely to do so, either. 

Reality: It's hard to bet against good brands, especially those as well-run as Starbucks. The only tip I'd offer CEO Howard Schultz: If you don't want to have constantly have to explain yourself in a quarter that isn't up to snuff, as was perceived to be the case this time, stop giving quarterly guidance and take a page from your first book, Pour Your Heart Into It. In it, Schultz wrote; "At some point you have to divorce yourself from the stock price and just focus on running the business." That may be more relevant now than ever.

Greenberg does not own shares, short or trade shares in an individual corporate security.

Editor's Note: This article was originally published at 12:28 p.m. EDT on Real Money on Oct. 31.

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Herb Greenberg, editor of Herb Greenberg's Reality Check, is a contributor to CNBC. He does not own shares, short or trade shares in an individual corporate security. He can be reached at herbonthestreet@thestreet.com.

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