Starbucks Corp. (NASDAQ: SBUX) is becoming gluten free. It became famous for its coffee and is now proceeding to beef up its food business, by offering gluten-free and vegan food alternatives across U.S. stores starting Tuesday, according to a press release. Customers who are aware of their gluten products can now enjoy Starbucks' first gluten-free breakfast sandwich, which is encompassed with Canadian bacon, egg patty and cheddar cheese on a gluten-free roll. Starbucks said the sandwich will be cooked in the "certified gluten-free environment" and preserved in its own bag in order to avate any gluten contamination, which may pose urgent threats to those individuals who have celiac disease.
While only a certain percentage of the population has celiac disease, there is an increasing number of consumers, who are not gluten intolerant but who want to exclude the protein from their diet for lifestyle reasons. "You have this whole group of consumers who believe gluten is not good for you," Technomic Chief Insights Officer Darren Tristano told CNBC in an interview. Many are younger consumers, Tristano said, "and if you're not speaking their language, you risk losing [them]."
The gluten-free food market is predicted to flourish at an annual rate of approximately 12 percent through 2021, according to the global research group Technavio. The Americas sustained the largest market share during 2016 and will proceed to lead the market for the next few years, the group said. "The [U.S.] region offers numerous growth opportunities for players involved in the gluten-free food business," Technavio wrote in its latest report, mentioning some of the largest vendors in this space including General Mills, Kellogg and Kraft Heinz Company. "Going gluten free is not always easy to get right," Tristano said, and it will be more of a test for Starbucks rather than an initial revenue driver.
"I do not see that this will have a dramatic impact on [Starbucks] sales but will help with retention of customers," Tristano explained. "This is designed to build trust with customers, so they respect your brand."
On Tuesday, the coffee giant also declared the release of a vegan-friendly sprouted grain bagel, an organic avocado spread, two new fruit-filled yogurt parfaits and a peanut butter cup cookie. All of these items will be accessible in Starbucks' U.S. stores starting Tuesday, the release said, just in time for the change of seasons.
In its most recent quarterly earnings release, Starbucks reported sales from food and other consumer packaged goods of $ 661.2 million, up 6.3 percent from $ 622.3 million during the same period one year earlier. In its U.S. stores alone, Starbucks reported revenue from the food segment grew 15.2 percent year-over-year. Starbucks will hold its annual shareholder meeting at its headquarters in Seattle, Washington, on Wednesday.