Tag Archives: Coffee

Starbucks stuck in third gear

It all started with a leaked memo.

In the aforementioned memo, Starbucks CEO Howard Schulz stated the following:

Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have lead to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand.

…and later:

when we went to automatic espresso machines, we solved a major problem in terms of speed of service and efficiency. At the same time, we overlooked the fact that we would remove much of the romance and theatre that was in play with the use of the La Marzocca machines. This specific decision became even more damaging when the height of the machines, which are now in thousands of stores, blocked the visual sight line the customer previously had to watch the drink being made, and for the intimate experience with the barista.


Clearly we have had to streamline store design to gain efficiencies of scale and to make sure we had the ROI on sales to investment ratios that would satisfy the financial side of our business. However, one of the results has been stores that no longer have the soul of the past and reflect a chain of stores vs. the warm feeling of a neighborhood store. Some people even call our stores sterile, cookie cutter, no longer reflecting the passion our partners feel about our coffee.

The response to this memo from coffee fans throughout the States was a resounding “No kidding!!”

The media’s response? Well the Washington Post had a headline that posed the question Is Malaise Brewing at Starbucks? An LA Times op-ed stated it clearly when they said Expanding too far too fast can turn companies from offbeat to bland.

Personally, I don’t think that Starbuck’s sterilization has anything to do with “too far too fast”. It’s simply the logical progression of any company’s goal of “trying please every consumer while squeezing the most profit from them”.

As an example let me bring up the two local coffee shops. From the time I enter the shop, until the time I have a drink in my hand – five minutes. This would include chatting with the barrista, and getting a little extra swirl in the latte. If I entered a Starbucks, it would take about half the time, but without the talk and the swirl.

These are little things to be sure, but when you sacrifice a dozen little things, it adds up to one big thing – namely that you’ve become a soulless corporation.

In thinking of the major brand names in the food world – McDonald’s, Coca-Cola, etc. – the only one I can think of that still has some level of “soul” (for lack of a much better word) is Ben & Jerry’s, and even that’s a bit of a stretch.

Mr. Schultz can’t have it both ways. Either you want power and profit, or you want to really, (and I mean really) connect with the consumer.

tags technorati : starbucks

More evidence of the McDonalds/Starbucks non-story

Nicole reminded me of an important fact – A fair amount of McDonalds recently changed the coffee supplier and are now getting their grind from Seattle’s Best.

The Punchline? Seattle’s Best is owned by Starbucks.

The McDonald’s/Starbucks non-story

Well, it’s not a non-story, but the reality is certainly different than the one being tossed around the internet.

Some back ground: Consumer Reports did a taste test of the brewed coffee from four different fast food places – Starbucks, McDonald’s, Burger King, and Dunkin’ Donuts.

Their findings?

Try McDonald’s, which was cheapest and best, or make your own coffee–just call it something special. The other three were all only OK, but for different reasons.

Okay, so they prefer McDonald’s over Starbucks. That, in of itself is no big deal. But the comparison became a quick and easy headline (McDonald’s Better than Starbucks!!) that took off and was repeated in many different places.

So while the idea that McDonalds’ brewed coffee was better than Starbucks’ brewed coffee is kind of interesting, it ignores two basic facts.

  1. Starbucks primarily sells espresso and espresso based drinks. Their brewed coffee probably makes up a small percentage of their sales (I’m guessing in the single digits).
  2. McDonald’s does not sell espresso and espresso based drinks. Their coffee products are brewed only.

In short, the conclusions drawn from Consumer Reports are notable, but the press narrative based off of those conclusions are completely wrong. Wake me up when McDonald’s gets an espresso machine.

And damn them all for making me defend Starbucks!

Technorati Tags: Starbucks, McDonalds, Taste Test, Coffee

Starbucks,Ethiopia and the National Coffee Association

Oxfam, a non-profit group dedicated to working with others to overcome poverty and the suffering that comes along with it, has accused Starbucks of forcing an agreement upon Ethiopia that benefits Starbucks rather than Ethiopia. It started after the following occurred:

Last year the Ethiopian government filed applications to trademark its most famous coffee names, Sidamo, Harar and Yirgacheffe. Securing the rights to these names would enable Ethiopia to capture more value from the trade, by controlling their use in the market and thereby enabling farmers to receive a greater share of the retail price. Ethiopia’s coffee industry and farmers could earn an estimated $88 million (USD) extra per year.

Ethiopia has even gone as far as to consult with intellectual property experts and legal counsel, and has asked Starbucks to sign an agreement that acknowledges Ethiopia’s ownership of its coffee names.

Oxfam then claims that Starbucks asked the National Coffee Association (NCA) to block the country’s bid to trademark the three types of coffee bean in the US.

Starbucks says this is nonsense.They also state that:

Starbucks has never filed an opposition to the Ethiopian government’s trademark application, nor claimed ownership to any regional names used to describe the origin of our coffees.

Which is true. Starbucks has never filed an opposition to the trademark application. That honor goes to the National Coffee Association and their Government Affairs division….which happens to be chaired by
Dub Hay, who in his spare time works for…say it with me…the Starbucks Coffee Company.

Can you say “conflict of interest”?

The solution here is simple…If Starbucks “supports the recognition of the source of our coffees and have a deep appreciation for the farmers that grow them”, then they should ask the NCA to discontinue their opposition to the trademark.

The odds of them doing that? Little to none.

Technorati Tags: Starbucks, Ethiopia, Coffee, trademark

Starbucks news: Coincidence

Has anyone else noticed the timing of these two stories?

  • Starbucks gives the okay for the “create-your-own” latte (previously called the ‘ghetto latte‘).
  • Starbucks decides to raise prices by a nickel.

One probably has nothing to do with the other, but it’s certainly weird timing of both of these news releases.

Technorati Tags: Starbucks

The Pros and Cons of the ‘Ghetto Latte’

A Ghetto (or Poor Man’s) Latte is an iced Americano, with no water and half ice which is then takens to the condiments bar where the milk or half and half is then added.

The question put forth to Starbuck’s Gossip was “Is it fair/right for a customer to order what we, at my store, call a “ghetto-latte”?

My own take? It doesn’t matter as the milk at the condiment bar is not free (it’s already figured into the cost of the menued products). Corporate business being what it is, the …ahem… bean counters here in Seattle have already figured that there’s a few folks who will game the system.

As a side question – has anyone actually ever used the vanilla powder found at the condiments bar?

Technorati Tags: Coffee, Starbucks

Wal-Mart to expand sales of Fair Trade Coffee?

My gripes with Wal-Mart aside, if they do expand their use Fair Trade coffee, it will bring the Fair Trade movement to the forefront, which is very much a good thing.

But make no bones about it, this isn’t as much about paying a fair price to farmers as it is about, well, undercutting the prices of their current supplier of coffee, Millstone (owned by Proctor and Gamble):

Sam’s Club already was selling fair-trade coffee from Millstone Coffee but wanted to work directly with Bom Dia to create a new line that could undercut the prices of the big names, controlling a supply chain from the ground up.

Regardless of how they got there, they got there. So with this, along with their recent foray into organic foods, it certainly makes Wal-mart worth watching.

Now if they could address the other issues surrounding their practices, too numerous to mention here, I might actually shop there.

Aw…who am I kidding? I’m still not going to shop there.

tags technorati : Fair Trade Coffee Wal-Mart