Getting the Kids Hooked on Starbucks (press release)

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For adults, there were samples of espresso-infused Banana Coconut Frappuccino. But the coffee retailer also set out samples that the kids flocked to: tiny cups of Bananas & Crème Frappuccinos made with banana puree and whipped cream, no coffee.

What made the promotion surprising is that Starbucks, the Seattle-based coffee retailer with more than 11,000 stores, has a longstanding policy of avoiding marketing to kids. The company says it isn’t aiming its new noncoffee Frappuccinos at children. But the promotion shows the challenge Starbucks faces in capitalizing on its growing popularity among families without breaking its pledge. As Starbucks launches more drinks that could appeal to kids, it’s also raising concerns about the nutritional value of items on its menu, as well as the high prices.

Food makers have become increasingly cautious about marketing to kids amid growing concern about childhood obesity. Kraft Foods Inc. last year started limiting its marketing to kids under 12 and in May soda companies agreed to halt sales of sugared sodas in schools. Starbucks, for its part, says it hasn’t changed its position on marketing toward youth.

The coffee chain’s written policy says its “overall marketing, advertising and event sponsorship efforts are not directed at children or youth,” although some “community activities” end up reaching kids. The company reviews marketing materials to avoid distributing ones that could be “inadvertently appealing to youth,” the policy says.

But as Starbucks expands, it is attracting new demographics, from teens who hang out after school to young mothers chilling out with their toddlers. So the chain is adding more products that appeal to them. Last month Starbucks said it had signed an exclusive deal to sell audio versions of the books “The Velveteen Rabbit” and “The Night Before Christmas” read by actress Meryl Streep. Earlier this year, Starbucks started selling DVDs of children’s music performer Laurie Berkner.

“Starbucks itself is a gathering place,” says Brad Stevens, Starbucks vice president of U.S. marketing. “You can often go in and see a whole family.”

Starbucks started selling Frappuccinos in 1995 after one of its Southern California stores whipped up the drink while experimenting with a cold coffee beverage. Since then the Frappuccino has become one of the chain’s most popular drinks and has evolved to include noncoffee varieties like Strawberries & Crème and Double Chocolate Chip. The coffee chain is now adding more noncoffee flavors. Today it plans to roll out a new line of pomegranate and tangerine juice Frappuccinos.

Plenty of adults drink Frappuccinos. But the sweetness of the drinks, and the fact that they borrow characteristics from the milkshake and 7-Eleven’s Slurpee, make them particularly appealing to children. Nutrition experts have criticized coffee chains for using sweetened coffee drinks as so-called starter beverages that get children hooked on caffeine. The Center for Science in the Public Interest, a food-industry watchdog, recently complained that Frappuccinos are among the most fat- and calorie-packed items on the Starbucks menu. A 16 oz. grande-size Bananas & Crème has 550 calories and 15 grams of fat. By comparison, the same size chocolate shake at McDonald’s has 580 calories and 14 grams of fat.

“A child, if it’s a snack, does not need this number of calories,” says Barbara Rolls, a professor of nutritional sciences at Pennsylvania State University in State College, Pa., who is studying food-intake regulation in children.

Starbucks says that it offers lighter versions of many Frappuccinos and that the new juice line contains no fat and fewer calories than its traditional Frappuccinos. Some have caffeine because they contain tea, but they can be ordered without caffeine. The company says that for further information on caffeine, it refers customers to medical experts because that’s not Starbucks’ area of expertise.

Some parents who bring kids to Starbucks note that the drinks that appeal to young people are often the most costly—a reversal of restaurant menus where kids’ food is priced lower. However, Michelle Gass, Starbucks’ senior vice president of category management, says parents on the whole don’t seem deterred by the drink prices. The smallest size of Frappuccino sells for $3.20 to $3.70, depending on the city, and the largest sells for $4.15 to $4.90.

“It’s an expensive treat,” says Henry Kleeman, a Lake Forest, Ill., resident who recently took his 12-year-old daughter, Andrea, for a Frappuccino. Because Andrea likes hanging out at Starbucks with her friends, her grandparents gave her a Starbucks card loaded with money she can use to buy drinks. Mr. Kleeman says he isn’t concerned about the high fat and calorie content of the drinks for his daughter. “There’s a lot of things I worry about more,” he says.

The influx of young people in the stores also threatens to upset customers who rely on Starbucks for a quiet place to work, read or relax. Neighborhood Starbucks outlets attract so many middle- and high-school students that “on weekend nights it’s almost like a bar for teenagers,” says analyst Sharon Zackfia, who follows the coffee chain for investment bank and equity-research firm William Blair & Co. in Chicago.

Melissa Schwartz, a 38-year-old nursing student from Deerfield, Ill., complained to the manager of a Chicago Starbucks in March when about 40 teenagers flooded the store while she was trying to study for midterm exams. “They were over-the-top obnoxious,” says Ms. Schwartz. Some of them sat on the floor near her. “They just crawl all over you,” she says. The store manager asked the teenagers to quiet down and gave Ms. Schwartz drink coupons.

But the manager also told her there wasn’t much he could do because the kids are customers too, Ms. Schwartz recalls. Now she peeks inside the Starbucks to make sure there aren’t too many teenagers and, if there are, crosses the street to a quieter tea shop.

Some coffee chains say nutritional and other concerns shouldn’t stop them from trying to attract young customers. “Better they should get hooked on an ice-blended beverage than maybe something else,” says Michael Coles, president and chief executive of Caribou Coffee Co., a Minneapolis-based coffee chain with 410 stores. Parents have thanked him for giving their kids a place to do homework, he says.

Caribou has added a line of noncoffee ice-blended drinks called Snowdrifts in flavors like Oreo and Mint to appeal to children, Mr. Coles says. Caribou stocks about one-third of its locations with stuffed animals, trucks and other toys to attract families. “Hopefully these kids will grow up in Caribou and think of it as their place,” Mr. Coles says.
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