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Starbucks to Open Second Roastery in New York City in 2018

Starbucks Corporation SBUX recently announced that its second roastery is scheduled to be opened in Manhattan, NY in 2018.

The coffee chain opened the first roastery — Starbucks Reserve Roastery and Tasting Room — which spans 15,000 square feet in Seattle in Dec 2014. The 20,000-square-foot New York roastery is reportedly the world’s biggest Starbucks store. The roastery will be located at 61 Ninth Avenue, a nine-storey building located one block south of Chelsea Market. The building, slated to be completed by the end of 2017, is being developed by Vornado Realty Trust VNO and Aurora Capital.

A roastery is a unique concept of offering roasting, education and retailing in one café. At the Seattle store, Starbucks roasts small batches of rare coffees and customers interact with the roasters/baristas to understand the various methods of sourcing, roasting and brewing. The New York roastery will be modeled on the same lines, though the company wants to ‘build something even bigger and bolder’. Starbucks plans to open a similar roastery in Asia this year.

Other than the roastery store concept, Starbucks has experimented with other formats in the U.S. like drive-thru stores. These outlets generate incremental revenues and profits compared with the traditional ones and are an important sales driver in the domestic market. Following the success of drive-thru stores, Starbucks also opened small footprint express stores in New York City to cater to on-the-go coffee drinkers.

Starbucks has a Zacks Rank #2 (Buy).

Stocks to Consider

Investors interested in the restaurant sector may consider well-ranked stocks like Carrols Restaurant Group, Inc. TAST and DineEquity, Inc. DIN. Both the stocks sport a Zacks Rank #1 (Strong Buy).

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STARBUCKS CORP (SBUX): Free Stock Analysis Report
 
DINEEQUITY INC (DIN): Free Stock Analysis Report
 
CARROLS RESTRNT (TAST): Free Stock Analysis Report
 
VORNADO RLTY TR (VNO): Free Stock Analysis Report
 
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