 |
| Starbucks CEO Brian Niccol said Luckin Coffee is forcing product innovation. Eugene Gologursky/Getty Images for Fast Company |
Starbucks CEO Brian Niccol says competition is keeping his company sharp — and Chinese rival Luckin Coffee is one of the brands pushing him to rethink the Starbucks playbook.
Speaking at the Fast Company Innovation Festival on September 16, Niccol highlighted what he admires about Luckin, which recently expanded into the U.S. after dominating the Chinese coffee market with bold flavors and low prices.
Luckin’s Playbook: Bold Flavors and a Digital-Only Model
Luckin has built its reputation on unexpected flavor combinations — think pineapple cold brew and coconut lattes — paired with aggressive pricing that undercuts Starbucks in China.
Niccol praised the pace of Luckin’s product experimentation:
“The one thing that they probably have done a nice job of is just an unbelievable pace of product innovation. It sets the tone for, ‘Hey, we cannot be complacent on flavors and drink combinations.’”
But while Niccol values the innovation, he drew a sharp contrast between Luckin’s digital-first approach and Starbucks’ focus on human connection.
All Luckin orders run exclusively through its app, eliminating face-to-face interaction with baristas. Niccol made it clear this isn’t a path Starbucks intends to follow:
“They’ve done an interesting job on how they’ve turned the app into the only way you can interact with that business. It’s a different approach. I don’t think it’s the right approach for us.”
Starbucks’ Own Strategy: Blending Innovation with In-Person Experience
Starbucks has experimented with mobile-order-only locations in the U.S. — but is now phasing them out. Instead, Niccol is doubling down on in-store comfort, connection, and craft.
A Starbucks spokesperson, while declining to comment on Luckin’s strategy, reiterated the brand’s focus on balancing convenience with customer experience.
Niccol’s broader “Back to Starbucks” campaign, launched after he took over as CEO in 2023, has tackled:
-
Long wait times at stores
-
Technical glitches in the Starbucks app
-
Staffing shortages
-
Declining sales
Despite those efforts, Starbucks stock remains down more than 12% year-over-year.
The China Question: A Massive Growth Market
While Luckin has gained ground in China with bargain pricing and digital-only service, Starbucks continues to see the region as its biggest international opportunity.
Niccol said Starbucks is having a “nice recovery” in China and is already tailoring products for local tastes. He recalled enjoying a rose dew latte at a Shanghai café, noting how the menu differs from the U.S.
In July, Starbucks announced plans to seek a local partner to help operate Chinese stores, while also cutting drink prices to compete directly with Luckin. Niccol added that he believes there could be “thousands more Starbucks in China” in the future.
Competition as a Catalyst
For Niccol, Luckin Coffee represents both a challenge and a source of inspiration.
“Competitors make you better,” he said, pointing to how Luckin’s relentless product launches are pushing Starbucks to keep innovating without abandoning its core identity.
While Starbucks may borrow from Luckin’s boldness in flavor innovation, Niccol is determined to maintain what has always set the brand apart: the café experience, the barista connection, and the human touch.
