Starbucks Is 'The Millennials' Parents' Coffee House' That Can Get Away With Charging $10 For Coffee

$10 for a cup of coffee? That's one part of Starbucks Corporation SBUX's plan to jolt the company's brand.

According to Reuters, Starbucks' co-founder Howard Schultz will step down as CEO and focus on building 1,000 new "Reserve" brand stores and up to 30 large Reserve Roastery and Tasting Rooms in key cities across the world. The move is seen as a strategy to better position Starbucks against upscale rivals such as Blue Bottle and Intelligentsia.

Reuters noted that the upscale shops will sell $10 cups of coffee made in glass siphons, $10 "flights" of Reserve brews as well as the nitro cold brew through a separate Reserve menu. The locations will also sell small-lot coffees that can set consumers back as much as $50 for an eight-ounce bag.

"Starbucks is the millennials' parents' coffee house and Starbucks is acutely aware of that," Ric Rhinehart, executive director of the Specialty Coffee Association of America, told Reuters.

Starbucks believes that its new format will result in customers staying longer and spending more. Ultimately, the new store could see twice the financial returns of a standard Starbucks store, which has an annual average unit sales of around $1.6 million.