Baked Goods Starting to Pay Off for Starbucks

Starbucks was never exactly known for its croissants—or any of its baked goods, for that matter. Now, however, the company is seeing early signs of promise for its revamped lineup of sweets, which has made its way to about a third of its US cafes. In an earnings call yesterday, Starbucks' chief financial officer Troy Alstead said croissant sales have doubled wherever the new recipes have been introduced. The company also is selling twice as many of its new "morning buns" and cheese Danishes, although it didn't provide details on the performance of other new items.

Right now, only about a third of transactions include food, and the company wants to push up that figure. "It's a big operational change," said Alstead. "It's a big supply chain change." (Starbucks flash-freezes the baked goods right after they're made, then warms up them up in stores.) It's too early to tell whether the sales bump will stick—it could be that people were just curious and decided to give them a try. Customers who like them will have to pay a little extra; the new croissant is $2.25, up from $1.95. (More Starbucks stories.)