Skip To The Main Content

Starbucks’ Supply Chain and Marketing Strategy Unicorn

Vice President, APICS Marketing

Thursday July 20, 2017


Summer often brings with it a variety of seasonal offerings from retailers and food-service providers looking to give consumers a fresh way to enjoy the warmer months. Seeing these new products featured on menus and store shelves brings to mind an example from earlier this year when supply chain and marketing strategy harmonized on a limited-time-only product with wildly successful results: the Starbucks Unicorn Frappuccino.

Throughout the short time the drink was available at Starbucks (April 19-23), lines were out the door for the brightly colored blended beverage that changed flavors as you sipped. Starbucks’ ability to bring the Unicorn Frappuccino to consumers for a brief time isn’t something many businesses could accomplish successfully. To have the agility to anticipate, meet demand, then scale back is a supply chain feat of mythical proportions.  Just as impressive is Starbucks’ brilliance in having its customers and the news media provide, at no cost, most of its marketing and advertising for the fanciful drinks.  

The Unicorn Frappuccino campaign was well-planned and designed for agility from start to finish. The recipe probably didn’t require many new ingredients – some bright, magical unicorn sprinkles, coloring, and sour blue syrup. There wasn’t a lot of downside risk to Starbucks if people responded negatively, since the drink would be phased out after a week, anyway.

You don’t get to be the world’s number one coffee company (current number of locations worldwide, according to the Starbucks website: 25,734) without having a great supply chain. The Starbucks supply chain initially developed simply trying to keep pace with the fast growth in the number of locations.

In 2008, Peter Gibbons came to Starbucks as executive vice president of global supply chain operations, and he led the company on a comprehensive supply chain transformation. Starbucks also successfully instituted a supplier code of conduct, rigorous standards for ethical and environmentally responsible sourcing, and a supplier diversity program. Today, Starbucks has a centralized, cloud-based supply chain led by Hans Melotte that consistently ranks among the world’s most admired, efficient and sustainable.

An efficient supply chain is needed to create the products and successful marketing is needed to sell the products. Both seemed to work in the case of the Unicorn Frappuccino. The marketing strategy was brilliant, with the highly photogenic concoction trending on social media for days. Starbucks customers and the news media did almost all of the marketing and advertising. There’s a Starbucks in the lobby of the building that adjoins ours in Chicago, and the week of the Unicorn, the lines at the counter were uncharacteristically long. It made you wonder if you’d be missing out if you kept walking. And if you did pick up one of the beverages, chances are you’d share your experience – good or bad – with your social connections. Business Insider wrote, “Starbucks has mastered social media with the Unicorn Frappuccino.”

It’s still not clear how Starbucks sourced those magical unicorns, but its supply chain was prepared to execute flawless and consistent delivery of the ingredients to stores around over the country, and its marketing department was ready to leverage the huge wave of positive buzz it generated.

During Starbucks’ most recent earnings call, Starbucks executives promised more creative specialty drinks to come. "We will bring at least one new entirely new drink into Happy Hour this year that is going to be as good as Unicorn or better," Starbucks CEO Kevin Johnson said.

 My bet is they call it the Mermaid.

 

All comments will be published pending approval. Read the APICS Comment Policy.

Leave a comment

  1. New code