Starbucks in the News
Thursday, October 21, 2010 at 3:48PM Starbucks has been in the news a lot this last month. I don’t want to be accused of advertising for the company, but with 16,000 stores worldwide, the Seattle-based coffee giant is probably the most important coffee chain in the world. To ignore it would be doing you a disservice. After all, many cafés watch what Starbucks does very closely and then try to mimic or improve upon it. What starts in Starbucks may later be seen at your favorite local café.
VIA
At the beginning of the month, Starbucks released its flavored VIA instant coffee (available in vanilla, caramel, cinnamon spice and mocha). Yes, that’s right, the company who rose to prominence by educating customers about high-quality whole-bean coffee, now sells flavored instant coffee. Am I the only one who winces when he walks down the bulk coffee isle at the grocery store and gets a whiff of the caramel-flavored coffee sitting on the shelf? Some of those aromas are so strong they make my stomach queasy. The flavored VIA had better be nothing like those coffees. When I try it, I will let you know.
Mind you, I am not anti-instant coffee. If people want to drink instant coffee, that’s their business. One of the things one of our professors in business school told us was that if your product saves people money or if it saves them time, you have a winner. VIA does both. It’s cheaper than going to Starbucks to buy a mocha every day and drinking VIA is a lot quicker than stopping at a Starbucks too. In addition, as reported by the company, sixty percent of its customers drink flavored coffee and eleven percent of American households buy it. Maybe the company is onto something.
Speed v. Quality
At the same time it is pushing its instant coffee to speed its customers’ lives up, Starbucks has also announced a policy that might slow things down in its cafés (more commentary here, including a link to a WSJ article on the subject). In order to help baristas improve the quality of their beverages, baristas have been instructed to work on no more than two drinks at a time to make sure that the steamed milk and espresso are both fresh when they come together. This could be a great thing for customers who want the best-tasting drink possible. However, for those customers who are primarily concerned with speed, the new policy may make those long lines even longer. Has anyone noticed a change in their daily Starbucks wait time?
Up (caffeine) and Down (alcohol)
Starbucks also made big news with its announcement that it is going to serve beer and wine at its newest store in Seattle. The café features a new décor with lots of old wood and recycled furniture used to create a more ‘neighborhood’ feel. Starbucks is trying to increase its evening store traffic by giving customers a place to unwind on their way home from work. In addition to beer and wine, customers will be able to order cured meats and cheeses in these cafés.
This is a great idea, as long as they have some good bread to go with the wine and cheese. Can a Starbucks ‘happy hour’ be far behind?
New Network
Finally, Starbucks launched its new digital Wi-Fi network built by Yahoo! The free network, which is only available at Starbucks cafés, has a selection of news and music that customers would otherwise have to pay for. Customers can read the Wall Street Journal, get select free music downloads other exclusive content. PC World magazine gave the new network a good review.
Does all of this activity reflect a coherent strategy on the part of the company, or is it desperately seeking the right formula to fight off a decline? When Howard Schultz came back to the company as president, he promised to once again make the coffee the center of the Starbucks experience. I’m not sure how all of October’s announcements reflect that, but it is obvious that Schultz is willing to try new ideas to make sure the company stays profitable.
Starbucks is an easy target for those of us who like to drink the freshest-roasted coffee in ‘independent’ coffee shops, but if we are honest, we have to admit that Starbucks helped create those coffee shops. Starbucks brought the ‘café culture’ into the mainstream in the US. While not all of its ideas are transferable outside the company, it will be interesting to see which of these latest things become popular with smaller coffee companies.
Reader Comments (4)
solid post! as i read, i couldn't help but think: perhaps the Via coffee and the slowdown initiative are synergistic strategies. they're bound to alienate the speed freaks by slowing down, but now they offer starbucks coffee faster AND cheaper at home. those customers won't come in to the stores now, but they'll remain Starbucks customers.
well played, Schultz!
Okay, so my Via opinions. I tried the regular via when it came out and though, "EW". I'm not a fan of starbucks brewed coffee and I was even less of a fan of the Via. But then our dear MIM classmate, friend and Starbucks manager Angie told me that it was good with chocolate milk or regular milk. But I never took the time to make it... UNTIL, my dad, who knows of my serious starbucks addiction, decided to buy me some Via for my birthday. How sweet, dad, but the stuff tastes like crap!! In a desperate search for caffeine one summer morning I decided to take Angie up on her suggestion. I mixed a via packet with about 12 oz of cold, nonfat milk, added a teeeeeny bit of sugar, ice and shook it up (in the travel mug from my dad that came with the Via). Suprisingly, it made a fairly decent, cheap, quick, iced latte-ish beverage. I drank them over the course of the summer and a couple days ago used my last via packet. As I did, suprisingly, what crossed my mind was "I need to pick up some more Via!" Convenience, It is 100% convenience.
Now, about the flavored Via - is there a limit on the length of comments? Anyways, my boss and I had some samples of the cinnamon flavored via at starbucks one morning and it was, well, interesting. With a little half and half it sort of tasted like it could have been an alcoholic drink, very strong on the cinnamon. The next time we went into starbucks she decided to pick up a pack of the vanilla Via for herself. (She is in the 60% of customers that actually drink flavored coffee, not me.) One long, boring afternoon at work she made herself a cup and let me have a sip. At first it was very hot and I only got a little bit and I thought - wow, that is pretty sweet but not bad!! Then after it cooled down I had a second sip, and thought, "Holy S**** that is WAY too sweet!!" I'm not big on sweet coffee, generally don't put sugar in mine (except for my Iced Via lattes). But this stuff - without adding anything but water - sort of reminds me of drinking vanilla syrup - perhaps with a hint of coffee.
If you are to invest in some starbucks via flavored coffee I would recommend 2 things:
1. Use a pack of regular via AND a pack of flavored via to make 2 cups of coffee (or 3 cups - I think you can get more than 8 oz out of a via packet)
2. NEVER add sugar, unless of course you want to drink syrup.
Any questions?
Oh and about the Starbucks serving alcohol.... I think a road trip is in order. :)
Julia, THAT was an insightful response! Thank you. And for the record, as long as they are full of good information, there's no limit on the length of responses ;)
Maybe an eggnog latte with real eggnog Julia? Yum. But, I'll have to get some via for the quick iced latte.