Deferred Revenue

12 Months Ended

Oct. 01, 2023

Revenue from Contract with Customer

Deferred Revenue

During fiscal 2018, we licensed the rights to sell and market our products in authorized channels through the Global Coffee Alliance and received an up-front prepaid royalty from Nestlé. The up-front payment of approximately $7 billion was recorded as deferred revenue as we have continuing performance obligations to support the Global Coffee Alliance, including providing Nestlé access to certain intellectual properties and products for future resale. The up-front payment is being recognized as other revenue on a straight-line basis over the estimated economic life of the arrangement of 40 years for the ongoing access to the licenses within the contractual territories. Our obligations to maintain the Starbucks brand and other intellectual properties are generally constant throughout the term of the arrangement. Therefore, a ratable recognition pattern is reflective of how we will satisfy our performance obligations.

As of October 1, 2023, the current and long-term deferred revenue related to the Nestlé up-front payment was $177.0 million and $6.0 billion, respectively. As of October 2, 2022, the current and long-term deferred revenue related to the Nestlé up-front payment was $177.0 million and $6.2 billion, respectively. During the fiscal years ended October 1, 2023, October 2, 2022 and October 3, 2021, we recognized $176.5 million, $176.5 million and $176.6 million of prepaid royalty revenue, respectively, related to Nestlé.

Changes in our deferred revenue balance related to our stored value cards and loyalty program (in millions):

Fiscal Year Ended October 1, 2023	Total
Stored value cards and loyalty program at October 2, 2022	$	1,503.0
Revenue deferred - card activations, card reloads and Stars earned	14,922.1
Revenue recognized - card and Stars redemptions and breakage	(14,853.0)
Other(1)	(4.6)
Stored value cards and loyalty program at October 1, 2023(2)	$	1,567.5
Fiscal Year Ended October 2, 2022	Total
Stored value cards and loyalty program at October 3, 2021	$	1,448.5
Revenue deferred - card activations, card reloads and Stars earned	13,464.7
Revenue recognized - card and Stars redemptions and breakage	(13,361.9)
Other(1)	(48.3)
Stored value cards and loyalty program at October 2, 2022(2)	$	1,503.0

(1)“Other” primarily consists of changes in the stored value cards and loyalty program balances resulting from foreign currency translation.

(2)As of October 1, 2023, approximately $1.5 billion of this amount was current. As of October 2, 2022, approximately $1.4 billion of this amount was current