Starbucks discontinues olive oil drinks in a push to simplify its menu

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Starbucks is discontinuing its Oleato olive-oil infused beverages at most locations, part of an effort to streamline the chain’s menu

ByDEE-ANN DURBIN AP business writer

October 30, 2024, 11:35 AM

Starbucks said Wednesday that is discontinuing its Oleato olive-oil infused beverages at most locations, part of an effort to streamline the chain’s menu.

The news came as Starbucks reported a disappointing end to its 2024 fiscal year. Starbucks said its revenue fell 3% to $9.1 billion in the July-September period as customer traffic slowed in the U.S. and China. For the full year, Starbucks said its revenue rose less than 1% to $36 billion.

The Seattle-based coffee giant had released most of the bad financial news before Wednesday and said that it would suspend financial guidance for its 2025 fiscal year to give its new chairman and CEO, Brian Niccol, time to assess the business.

Later Wednesday, Niccol was scheduled to hold his first conference call with investors since he joined the company last month.

Starbucks said it will no longer offer Oleato drinks beginning in early November at most stores. They will be available at some locations in Italy, Japan and China.

The decision breaks a link to longtime Starbucks leader Howard Schultz, who came up with the idea for the drinks after visiting an olive oil producer in Sicily. Schultz called the beverage a “transformational idea” when he introduced it in Italy in early 2023. It went on sale in the U.S. earlier this year.

But Schultz stepped down as CEO in March 2023 and left the company's board last fall. Since then, Starbucks' sales have fallen as consumers push back on high prices and employees struggle with the chain's increasingly complex menu.

Niccol, the former chairman and CEO of Chipotle, took over in September. Last week, when Starbucks' released its preliminary fourth-quarter earnings, Niccol said Starbucks needed to simplify its “overly complex menu” and simplify operations for baristas, especially during the morning rush.

Removing Oleato is part of that push, although the company said Wednesday that the decision to take it off the menu was made before Niccol took over as CEO.

Starbucks also attempted to satisfy customers Wednesday by announcing that it would no longer charge extra for using non-dairy beverages in its drinks. Starting Nov. 7, when Starbucks’ holiday menu is due to be introduced, customers will be allowed to choose soy milk, oat milk, almond milk or other varieties at no additional cost.

Starbucks said substituting a plant-based milk for dairy milk is the second most-requested customization at its store after adding a shot of espresso. But the charges can add up. At a Starbucks in Michigan on Wednesday, it cost 70 cents to switch to almond milk in a medium Pumpkin Spice Latte.

Earlier this year, a trio of California customers sued the company, saying the fees discriminated against people who are lactose intolerant. Niccol said customization is what sets Starbucks apart, and the company wants to embrace all the ways customers enjoy its drinks.