Starbucks Tried to Reinvent Coffee by Mixing in Olive Oil. It Didn’t Work Out As the Company Expected

Among Starbucks executives, the idea sounded wonderful. If coffee and olive oil work beautifully separately, why not combine them into a single (and transcendent) beverage? 

That was the question Starbucks’s former CEO Howard Schultz, a key figure in the company’s history who left the board a little over a year ago, asked himself. The result was Oleato, a lineup featuring coffee-based drinks like lattes and espressos infused with olive oil.

For Starbucks, the combination represented a “transformative innovation,” a “revolutionary” proposition for coffee drinkers. However, despite the company’s high expectations, time has shown that not all customers are embracing this new spin on coffee.

The response prompted Starbucks to discontinue the Oleato line in the U.S. and Canada, marking an end to its olive oil experiment.

A cup of coffee with olive oil? Yes. That’s the unusual (or perhaps not so unusual) bet of Oleato, a drink launched in Italy in early 2023 that has since expanded internationally. When it debuted with fanfare in Milan in February 2023, Starbucks billed it as a “transformative innovation.” Promoters referred to it as “unexpected alchemy,” along with plenty of additional adjectives.

The concept itself was intriguing. At its core, Oleato combines Arabica coffee with a spoonful of extra-virgin olive oil from the Sicilian company Partanna. “The result is a velvety smooth, delicately sweet, and lush coffee,” the company promised. The launch included several products: latte, espresso, and cold brew. “Oleato represents the next revolution in coffee,” Schultz said.

But why? Like all good launches, Oleato came with a story. Starbucks’ decision to go with this combination of oil and coffee was no accident. The company said the concept for this coffee-oil blend stemmed from Schultz’s personal experience. During a trip to Sicily in 2022, he noticed some families on the island drank a teaspoon of olive oil daily—a habit that caught his attention.

Schultz adopted the practice himself, drinking oil with his coffee for breakfast every morning. One day, he asked himself the million-dollar question: Why not combine the two?

Schultz tried it. Starbucks describes the result as “an alchemy of nature’s finest ingredients,” which Schultz eventually shared with the company’s development team. “There will be people who say, ‘Olive oil in coffee?’ But the proof is in the cup. Today, I feel just as inspired as I did 40 years ago. Oleato has opened our eyes to fresh possibilities and a transformational way to enjoy our daily coffee,” Schultz said during the presentation of Oleato.

Breaking new ground. Starbucks did more than just experiment. It introduced a line of drinks blending coffee and Partanna’s extra virgin olive oil, featuring options like oat milk, hazelnut syrup, ice, and vanilla cream. It even made an Oleato Golden Foam Espresso Martini.

Starbucks debuted its Oleato drink line in Italy in February 2023, with plans to enter “select markets” globally, starting with Southern California that spring. Later that year, the company aimed to expand to Japan, the Middle East, and the UK.

By January 2024, Starbucks announced that Oleato beverages were available nationwide in the U.S. “Oleato is also available in locations around the world, including Canada, France, Japan, London, and select cities in China,” the company said, alongside a map highlighting cities like Beijing and Shanghai.

From a grand launch to… retreat. That’s what the company appears to have done in the U.S. Bloomberg reported this week that Starbucks plans to remove Oleato products from U.S. menus starting Nov. 7, aligning with the launch of its holiday drinks.

Since the report, media outlets including CNN, BBC, Axios and CNBC have confirmed the news, noting that the coffee-and-olive-oil beverage will be discontinued in the U.S. and Canada. The BBC reports that, at least for now, Oleato will remain available at select locations in Italy, Japan, and China.

The reason? Starbucks aims to simplify its menu, a goal that current CEO Brian Niccol has already hinted at. Recently, Niccol acknowledged the menu was “too complex.”

However, media outlets have noted that Starbucks agreed to phase out the Oleato line in the U.S. and Canada before Niccol became CEO. “This decision was made prior to Brian Niccol taking the role of CEO,” a Starbucks spokesperson told the BBC, adding that the move aligns with efforts to simplify the menu.

Context matters. Beyond Niccol’s desire to streamline options, the decision reflects broader challenges for Starbucks and the Oleato line itself. The product didn’t inspire the admiration that Schultz had anticipated, with customer opinions divided. Some even criticized Oleato, claiming it caused laxative side effects.

Yet, not all reviews were negative. Former CEO Laxman Narasimhan described the drinks as a “huge success” and one of the company’s most significant launches in the past five years in terms of branding.

Financial context. Starbucks’ decision to step back from Oleato also comes amid efforts to boost sales. In the fourth quarter, revenue fell about 3.2% to $9.07 billion, while full-year revenue rose only 0.6% over the previous year. Facing this situation, which has also led to a drop in share price, Starbucks decided to suspend its financial forecasts for the year.

Images | Starbucks

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