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Instant Coffee: Sign of the times?
Starbucks to begin selling instant coffee
Full Story | San Francisco Chronicle
Varma said Starbucks will offer details of the new instant coffee, reportedly called Via, beginning next week. Samples will be arriving in stores on Wednesday, he said.
Great.. Instant Starbucks. Sounds.. hmm.. I’m not sure how that sounds.
Howard Schultz plans to make the announcement tomorrow, with the product ending up on shelves sometime this week. They are also working on a “value breakfast pairing for $3.95″. (See Starbucks Newsroom article)
They’ve denied it not too long ago, but I think now it’s safe to call it official.
The siren has lost its soul. Some refer to McDonald’s in making sense of this, but not in the way that you think.
McDonald’s is not in the restaurant or burger business. They are in the real estate business, and they happen to run restaurants too.
Starbucks is not in the coffee business. They are in the lifestyle business. They sell status imagery via coffee. When the customers can no longer afford to buy status imagery, or when they no loner see the value in it, the company is bound to shrink.
The question is this. How bad is the situation for Starbucks?
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Absolutely Starbuck’s is in the lifestyle business…and they are also need to grow rapidly to satisfy their shareholders. This creates a problem as it is inevitable for a public company that targets a specific niche audience to eventually saturate their target market and need to expand to new markets.
New geographies can facilitate this growth for a while, but Starbuck’s is now officially abandoning it’s original target to compete for a larger group. They’ll try and keep their original audience with claims that the new fast and convenient approach is just as good (there’s no such thing as a free lunch), but the needs of the new customers are at odds with the old customers. For the old customers, they’ve lost there way and are entering Tim Hortons and MacDonalds territory.
I agree with you on several levels.
Either way, it’s clear that Starbucks has been shifting away from its initial path of quality for years, and this is just another step along the way.
Best comment on this new product offering that I have heard so far was on AdAge…. “Starbuck’s is embracing its inner Walmart!”….. as Starbuck’s continues to move farther and farther away from their origins as a small batch micro-roaster of high quality, fair-trade coffee…. customers who care about quality, freshness and value turn to micro-roasters to keep them supplied with the best offerings around!