Dive Brief:

• Starbucks China has been testing delivery from virtual kitchens through its partnership with Alibaba within its Hema supermarkets and now has two back-of-house Star Kitchens in operation, according to Nation's Restaurant News.
• "We're learning from their experience to understand how we might bring a similar model to life in the U.S., particularly in large metro markets like New York," Starbucks CFO Patrick Grismer said during the Piper Jaffray’s 39th annual Consumer Marketplace Conference on Thursday.
• Grismer also said that Starbucks Delivers in the U.S. and China has been testing different menus and removing items that don’t transport well, such as foam-topped beverages. In the U.S., it also has been looking into different packaging options to preserve the quality of the product, provide tamper-proof packaging as well as lids that reduce spillage during delivery. 

Dive Insight:

Given Starbucks' steep competition in China, it is no surprise that it has been testing out delivery from a virtual kitchen. Its growing rival Luckin has outposts within office buildings to offer faster delivery. A virtual kitchen could expand its delivery footprint, allowing Starbucks to reach more customers without having to build new stores.

Grismer said for consumers placing delivery orders, it really doesn’t matter where the order is prepared. "What the consumer cares about is that it is of high quality and that it's delivered in a timely fashion," he said.

In the U.S., the company is already considering new retail formats in New York to enhance mobile order and pickup since these options don't require a cafe, Grismer told NRN. The company previously said it's planning a renovation of a third of its stores to incorporate more technology and express pickup windows for mobile orders.

As for ghost kitchens, it could parlay its partnership with Uber Eats into one that includes the delivery provider's planned cloud kitchen operations. It could also team with Kitchen United, which is growing in scope and looking to partner with a mix of national, regional and local restaurants.

If Starbucks were to roll out ghost kitchens in the U.S. it would be among the largest chains to do so. A handful of chains have already ventured into this concept, including Wetzel's Pretzels, Chick-fil-A, Dog Haus, Outback, Carrabba's and Famous Dave's. These kitchens allow for restaurants to test new markets, expand off-premise operations and experiment with delivery-only menu items without having to open a new location.