
Starbucks Frappuccino Sales Tell a Troubling Tale - smacktoward
https://www.bloomberg.com/view/articles/2018-06-20/starbucks-investor-update-delivers-the-wrong-kind-of-jolt
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wgerard
Somewhat related, but I always wonder if things like this are symptomatic of
something larger happening - i.e. I wonder if we're at the start of a
recession of some kind, and this is a symptom of that.

Of course the more logical part of my brain says "Starbucks is over-saturated,
local coffee shops have surpassed Starbucks in many ways, and people are
starting to realize how horrible frappuccinos are for them."

Still, sometimes it's hard to shake this nagging feeling that things like this
are dead canaries. I'm not quite sure why, though.

~~~
tracer4201
28 year old here. I was buying starbucks 5 days a week and started drinking
the office coffee back in january. I haven't spent a dime on starbucks ever
since.

I realized at some point I want to buy a home and also retire. Tightened the
belt a bit, wrote out a strict budget, and now i am adhering to it.

Also, the crazy stock market prices are making me fearful. I still have my
401k and sp500 fund contribution each month, but I sold individual stock I was
holding (mostly just faang's)... some of it is now in a cash savings account,
in cd's, and a bit in just some vanguard mutual funds.

Typing on phone, sorry for typos.

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lotsofpulp
Unless you have insider information or are a very good part time quant, I
don't see any reason to think you can time the market.

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timr
It isn't necessarily "timing the market" to cash out gains after a historic,
decade-long run. You don't have to get the top or the bottom exactly right.

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lotsofpulp
I would classify cashing out as timing the market. I'm not saying it's a bad
thing to sell at current prices, but who knows if we'll have another +25% year
or a -25% year? My point is there's no reason to be fearful, just realize that
it's all a gamble unless you have an edge.

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timr
_" I would classify cashing out as timing the market."_

Yes that was already clear.

 _" who knows if we'll have another +25% year or a -25% year? My point is
there's no reason to be fearful, just realize that it's all a gamble unless
you have an edge."_

The point is, there's a lot more that you don't know. Maybe they just sold out
at a big gain, knowing that the economic cycle is a real phenomenon, that
interest rates are going up, and the yield curve just inverted. Maybe they
were over-weighted in a single sub-sub-sector (FAANG tech stocks) that have
had a spectacular run, and it's actually a _good_ idea to diversify. Maybe
they have plans for that money in a few years, and the recent sideways
movement in the market is a good excuse to take gains. Horses for courses.

Even if you don't believe any of that, it isn't "market timing" to act on
hypotheses, any more than it's market timing to sell a particular stock when
the fundamentals change. You have no idea what the parent's situation or risk
tolerance is, so criticizing with "don't time the market" is equivalent to
"never sell", which is a comment with zero information content.

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dr_
How about improving on some of the food items? Starbucks had purchased
BayBread/La Boulange for 100 million several years ago. Yet when I walk into a
Starbucks and look at the selection of pastries behind the glass casing, they
look dehydrated and unappealing. My local cafe has stuff that actually looks
like it was freshly baked that morning. They usually don't make them in house,
they work with local bakers. Starbucks should consider doing something
similar.

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modzu
why not support your local cafe instead?

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modzu
(in terms of the purely economic question of whats best for sb, that mass
produced cardboard food must net more profit than the increased sales of more
expensive higher quality food would)

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berbec
The percentage of that profit staying in the local area is smaller at a
Starbucks.

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siliconc0w
Aside from wasting money, that amount of excess sugar also kills you similarly
to alcohol. Diabetes, fatty liver disease, obesity, etc. Well I guess it's
also wasting money due to the increased health care costs but one might also
argue an early death saves money so YMMV.

~~~
Teckla
I've never understood why they don't offer all the same sweet drinks, but with
something like Splenda instead of sugar.

Perhaps it's better this way, otherwise I'd probably be at Starbucks a lot
more often.

~~~
Simon_says
Oddly enough, the zero-calorie (or very low calorie) sweeteners are almost as
fattening as sugar.

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gameshot911
Funny that decreasing _growth_ is the main cause for concern in this article.
Talk about ubiquity itself not being enough for investors.

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orev
The need for growth eventually kills all these companies. There’s just no
concept on Wall St. that a company can so completely saturate the market that
there’s nowhere else to go. It’s a relatively new concept that companies
really can dominate the whole world in their market segment.

~~~
JumpCrisscross
> _There’s just no concept on Wall St. that a company can so completely
> saturate the market that there’s nowhere else to go_

They’re called utilities. They pay a nice dividend and are valued with at a
sober multiple.

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JohnTHaller
Maybe folks are realizing that even when you call basically-a-milkshake a
coffee beverage, it's still basically a milkshake... and not something you
should consume regularly.

~~~
craftyguy
not likely. obesity in the US is still a thing, and it's not getting any
better.

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67_45
Starbucks is the defacto mascot of money wasting. People always talk about
abstaining from starbucks when they talk about saving money. The frappuccino
is often the specific product that is mentioned. How is it any surprise that
it's popularity has waned? Star bucks stores feel more like McDonald's stores
than anything else, there is almost no atmosphere to speak of which I would
guess is rather important to the coffee snobs who buy fraps. What kind of
world do we live in when McDonald's is expensive (everything besides the
simple cheeseburger is a total insult to value) and when Starbucks is
McDonald's?

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baybal2
>Starbucks is the defacto mascot of money wasting.

>People always talk about abstaining from starbucks when they talk about
saving money.

Except when they come and buy them :)

For the money wasting culture.... The latest Starbuckses in China are
mindblowing... Not only they have nearly $11 bucks drinks ( you can buy 4 full
meals for that price in China ) the decorum looks like something out of ritz
carlton if not more posh.

They are thriving here.

~~~
67_45
But in the article it says that Starbucks growth in China has fallen
significantly behind market growth

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stephengillie
> _Perhaps this shouldn’t come as a shock, given that Frappuccinos pack a lot
> of calories and customers are increasingly looking for healthy choices. But
> Starbucks needs some new hits to give people a reason to come back through
> its doors, especially with so many insurgent and boutique coffeehouses
> chasing the same customers._

Indeed, at over 500 calories, any given Frappuccino is almost 1/3 of my daily
calorie budget. That's a lot to spend for a single treat. They keep trying to
push these at the "Happy Hour" events they hold every other Thursday -
announced by Wifi auto-login page, auto-signup email newsletter, and numerous
app notifications. They're using just about every trick available, but sadly
their caffeinated milkshakes aren't bringing paying customers to their 'yard'.

As a frequent Starbucks customer, I face 3 issues with the stores:

\- Lack of low-carb, high-protein meal options. The protein boxes are
acceptable, and more options would be lovely.

\- Long lines to order, and an uncomfortable wait for the drink. The solution
I've found for this is to order through the app, from a store about 5 minutes
away. By the time I arrive, my order is waiting for me at the end of the drink
rail.

\- Unpredictable lack of seating - no way to know if all tables are taken at a
given store, without actually being there in person. Google Maps can give some
idea. Not sure of a better solution for this, short of table sensors or
webcams.

The long ordering times are a problem held by almost all coffee shops, and
Starbucks app is the only thing that makes me opt for them over smaller local
competition.

~~~
masonic

      Lack of low-carb, high-protein meal options
    

The sous-vide egg bites are the perfect keto snack. The steak and egg
tomatillo works, too.

~~~
Klover
What else do you eat? Avoiding any and all sugar does seem like a great way to
lose weight, but how do you go about your day? Is it lots of cooking, lots of
batch cooking, or getting things at cafés?

I was telling a friend of mine the other day how I used to cook a lot of beef
and assorted vegetables in a pot of water and it would last me the week, but I
have barely any sense of taste.

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masonic
I generally don't cook, except for a occasional grilling.

There are always low-carb modifications you can make. There used to be coffee
shops here that would make a larger omelette in lieu of potatoes and toast,
for example. In and Out Burger offers the so-called protein style for all of
their burgers such that you can get your burger in lettuce wrap instead of a
bun. Even at McDonald's, a good low carb value is to get 2 double
cheeseburgers or McDoubles, toss one bun, and use the remaining bun has a
holder for the combined now four-patty Burger (you don't have to hit the
button, just use it as a holder). etc.

Meat. Cheese (in moderation). Eggs. Salad greens. It's What's For Dinner (tm).

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everdev
> Perhaps this shouldn’t come as a shock, given that Frappuccinos pack a lot
> of calories and customers are increasingly looking for healthy choices.

Glad that people are making healthier choices but consuming stimulants and
refined sugar every day (sometimes multiple times per day) probably isn't a
healthy habit either.

~~~
craftyguy
I stopped going to starbucks because I had to wait in the same like as the
"large mocha frappuccino with whipped cream and low fat milk please" folks who
took forever and a day to order their crap, when all I wanted was a black
coffee.

Why can't there be a way to get a regular, no frills coffee without waiting
for tens of minutes?

~~~
rangibaby
> Why can't there be a way to get a regular, no frills coffee without waiting
> for tens of minutes?

Make it at home with an aeropress, I stopped going to Starbucks when I
realized I was spending $5 on venti iced coffees multiple times per week when
$10 worth of beans easily lasts me two weeks of a daily pot (2x venti) of
coffee. One pot of coffee with breakfast usually keeps me going for the day,
with the free side effect of not having trouble going to sleep at a decent
hour

~~~
craftyguy
Yea, sometimes that's not an option when traveling.. When I'm not traveling, I
make all of my coffee at home, or drink whatever my employer serves.

~~~
fmorel
I bring caffeine pills with me now when I travel so I don't have to go out for
my daily coffee. But I enjoy brewing my own coffee at home.

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dmfdmf
>...Starbucks struggled to draw customers in the afternoons.

My local Starbucks stops brewing decaf at 11am. I can't drink caffeine in the
afternoon and I don't think I am alone.

~~~
masonic
There is no extra charge for a pour-over (e.g. for decaf or dark roast).

If they try to upsell you to a Clover specialty variety for more money, don't
pay any upcharge.

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rabboRubble
The Starbucks sugared drinks are so sweet my teeth hurt. One day, I ordered a
black coffee, it arrived pre-sweetened when I was expecting bitter. Starbucks
had spit up on their floors after that drink.

Edit: Also, at one point I did a deep dive into my finances, and I realized I
was spending more at Starbucks than I was on groceries at a grocery store. I
ate out a lot. Started cooking home more, and made a rule about how much
weekly to spend on coffee. That probably didn't help Starbucks' finances
multiplied by all the financially squeezed millennials.

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DoreenMichele
I'm guilty of contributing to the decline of Frappuccino sales. I used to
drink them regularly at Starbucks. Two (related) things happened: I got off
the street and I got healthier.

I use food in place of drugs. Me consuming enormous amounts of coffee for the
caffeine is a sign of health distress. I have mostly quit drinking coffee
since leaving California and getting back into housing.

I was also going to Starbucks for the Wi-Fi. I now have internet service at
home.

It's anecdata. But maybe there are trends happening that are impacting
Starbucks, but which are not really about Starbucks per se, and that don't say
something dire about the world.

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walru
Does anyone recall how Facebook's booming growth coincided with the growth of
Zynga? A game genre which asked you to have a bunch of friends to get ahead,
otherwise pay to win. (aka. a lot of people signed up for fake accounts)

The recent US employment numbers have a similar stink, as it's impossible for
the vast majority of people to survive off a single job's income, especially
when little to none of them are offering full-time or benefits. The talk of a
recession hasn't started, but it's here, if not something far far worse.

~~~
JumpCrisscross
> _it 's impossible for the vast majority of people to survive off a single
> job's income_

The average employed American earned $928.74 a week in May of 2018 [1]. That's
over $46,000 a year [2]. That's a livable wage. In the same month, labor force
participation for Americans over 16 was 62.7% [3].

So a majority of Americans have jobs, and the average job pays over twice the
poverty rate for a family of three to four [4]. The vast majority of Americans
can survive off a single job's income.

[1]
[https://www.bls.gov/news.release/empsit.t19.htm](https://www.bls.gov/news.release/empsit.t19.htm)

[2] 928.74 * (52 - 2) _includes 2 weeks ' vacation_

[3]
[https://data.bls.gov/timeseries/LNS11300000](https://data.bls.gov/timeseries/LNS11300000)

[4]
[https://en.wikipedia.org/wiki/Poverty_in_the_United_States#R...](https://en.wikipedia.org/wiki/Poverty_in_the_United_States#Recent_poverty_rate_and_guidelines)

~~~
tudelo
Thanks for the data. I know very few people who legitimately have more than
one job and I grew up in a poor household. We got by.

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walru
You're talking about 10-30 years ago. Not today.

~~~
tudelo
That's fair to say. A bit of a logical oversight on my end :)

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sonnyblarney
I think something better than Dunkin Donuts, but cheaper than Starbucks could
make a killing.

People like their coffee but not quite the price.

Also - the brand is fully commoditized ... so high price points are harder to
achieve.

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laurex
Where's the kombucha? And maybe some avocado toast with flavoured salt? The
zeitgeist is passing them by...

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keyle
Vote me down all you want, but I fail to see why this is relevant to HN and
landed the first page...

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67_45
Don't mention being down voted. It's against the rules and not very appealing.
But I do agree with your sentiment

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gameshot911
Why did you feel the need to create a new account for this comment & thread?

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OhYouKnowWhy
Oh, come on. You know everyone on this site is a fucking asshole.

~~~
gameshot911
True, but I didn't think IP was saying anything particularly controversial.
Hence my curiosity!

I was almost wondering if OP just created new accounts for _every_ thread out
of some hyper-privacy orientation.

