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.
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?
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.