CPG

The news: Starbucks is rolling out “Green Dot Assist,” a generative AI (genAI) assistant built with Microsoft Azure and OpenAI, to 35 locations this month. The tool, which is accessed through iPads, aims to streamline operations, reduce service times, and improve accuracy for baristas while reducing reliance on manuals or intranet searches. Our take: Competitors and the industry will be keeping an eye on how Starbucks integrates AI assistants at scale. This is a potential blueprint for using AI not just for automation, but to enhance human touchpoints while increasing efficiency—provided all the moving parts work together.

The news: TikTok tweens and teens who make popular “Get ready with me” skincare routine videos may be harming their skin. The takeaway: Amid the closer social media scrutiny, skincare health brands should be clear about products that are not made for young skin. Social media teams need to be aware and proactive when interacting with tween and teen content creators.

The insight: Growing GLP-1 usage could reduce McDonald’s annual sales by as much as $428 million, or 1% of system sales, according to an analysis by researchers at Redburn Atlantic. The impact could widen to 10% or more “over time,” the analysts wrote, for brands like McDonald’s that are “skewed toward lower-income consumers or group occasions.” Our take: GLP-1s are just one of the many factors influencing what consumers eat. With economic uncertainty looming large, financial concerns are the biggest consideration for the majority of consumers—which is why households are choosing to eat at home more often and increasingly opting for private labels at the grocery store.

The reality: Tariff-driven grocery price hikes have been relatively modest so far this year. Food and beverage prices rose 2.9% YoY through mid-May, up from 1.7% a year earlier, per Circana. While tariffs haven’t caused a major inflation spike, supply-side shocks—like drought, avian flu, and extreme weather—have pushed up prices on staples such as coffee, eggs, and chocolate. Our take: Tariffs haven’t led to major price hikes yet, but that’s likely to change soon as duties push up costs on goods like seafood, alcohol, and produce. And even before those increases take effect, shoppers are becoming more cautious, more price-sensitive, and quicker to trade down or skip nonessentials altogether.

The news: China’s coffee giants are making their way to the US in the hopes of unlocking a lucrative market to offset pressures back home. Our take: Luckin’s and Cotti’s US launches are a problem for Starbucks, which is already struggling to compete with the companies in China and having a hard time winning over customers at home. Unfortunately for Starbucks, many of the moves it’s making—streamlining its menu, enhancing the in-store experience, leaning into premiumization—run counter to consumers’ current desire for variety, convenience, and value. That has created an opening for chains like Dutch Bros (and now Luckin and Cotti), which are better positioned to capitalize on emerging trends in the coffee space and can undercut Starbucks on price.

The news: Starbucks is lowering prices in China for some drinks as the country’s relentless price wars force the struggling coffee chain to shift gears. Our take: Starbucks’ pricing actions are necessary to keep it competitive in a challenging market. But it is increasingly struggling to keep up with the likes of Luckin Coffee and Cotti, which are not only considerably cheaper but also better able to meet Chinese consumers’ rapidly shifting tastes. With conditions in the world’s second-largest economy unlikely to improve this year, Starbucks will have to find a way to become nimbler—and more affordable—to keep within striking distance of its rivals.