Starbucks Goes Upscale With Roastery in Wall Street’s Backyard

(Bloomberg) -- Starbucks Corp. is bringing its high-end cafe and roastery concept to New York City, seeking to bolster its premium-coffee credentials in Wall Street’s backyard.

The opening of the Reserve Roastery coincides with a Starbucks investor conference in New York. The concept is a key part of the company’s bid to bring some premium sparkle back to a brand that’s gone mainstream as it expanded across the U.S. and world. The three-level coffee palace across the street from Chelsea Market includes a 60-foot bar offering $23 cocktails made with cold brew and Veuve Clicquot champagne. There are two areas where coffee is prepared and a Princi Italian bakery on site sells pastries and pizza.

Starbucks shares have gained 15 percent this year, while the S&P 500 Index has dropped almost 1 percent. Still, the company, which is increasingly looking to the Chinese market to drive growth, has faced concerns about its sluggish sales in the U.S. Adding to the pressure, activist investor Bill Ackman announced a stake in the company earlier this year.

The 23,000-square-foot facility, which opens to the public on Friday and features coffee roasting and baristas dressed like New York newsboys, is the company’s fourth Reserve Roastery, joining locations in Seattle, Shanghai and Milan. Starbucks plans to open locations in Chicago and Tokyo next year.

Starbucks changed the coffee culture in the U.S., getting java drinkers to embrace espresso and trade up from mass brands like Folgers and Maxwell House. But with consumers gravitating toward more upscale lines like Blue Bottle, Starbucks, with more than 14,000 domestic locations, has looked increasingly mainstream.

With the Reserve Roastery concept, Starbucks aims to recapture some of its fading premium sheen. There’s a 10-foot tall, 2,000-pound copper Siren, part of the Starbucks logo, near the entrance and a giant cask to hold coffee beans before roasting. There’s also a fireplace and exposed pipes meant to evoke the New York City subway.

The location, about a mile west of Union Square in an area frequented by tourists on their way to the High Line, is meant to be the “ultimate experience in all things coffee,” said Chief Executive Officer Kevin Johnson.

To contact the reporter on this story: Craig Giammona in New York at cgiammona@bloomberg.net

To contact the editors responsible for this story: Anne Riley Moffat at ariley17@bloomberg.net, Lisa Wolfson, Jonathan Roeder

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