Staying Real in an Instant
Today, we announced that Starbucks will introduce an instant coffee, providing our customers with great tasting Starbucks coffee, anywhere and anytime. Not surprisingly, this news raised some eyebrows and some cynics are asking, "Why go instant, Starbucks?"
There are numerous logical reasons: the significant size of the instant coffee market ($17B globally); the increasing mobility of consumers (imagine a cup of Starbucks VIA Ready Brew on a mountaintop); and, regardless of our ubiquity, that customers continue to tell us they want more Starbucks, and more ways and opportunities to enjoy it.
But beyond these market trends, there is a larger rationale. During trying economic times, the brands that endure are those that that adapt to the changing needs of their customers, without forsaking their core values. We think introducing a paradigm-changing and better-tasting instant coffee is a way to bring quality and value to the mass market, and to turn on a whole new set of coffee drinkers to the Starbucks brand. This is a considered bet for us and we know we'll learn a lot as we launch the product in leading markets over the coming weeks.
I think John Quelch, the Harvard Business School professor and marketing expert put it best: in a tough economy, consumers are redefining value. They are consuming less, and focusing more on seeking satisfying experiences that enhance their lives. He calls this growing segment "The Simplifiers." They want fewer material goods, and more quality-of-life experiences. At our core, we have the right stuff to appeal to these consumers, whether it's the respite from the world our stores provide or now with Starbucks VIA ready brew, quality coffee on-the-go.
As I've written in this space in the past, I believe that today, perhaps more than ever, we need to be mindful of who we are. We are forced into making decisions without perfect information: delay a decision by even a day and the economy will have changed shape once again. Business in this climate is more art than science. At Starbucks there are no sacred cows -- except one. I believe that it is crucial, and I think our customers agree, that we remain true to our core values. To adapt is essential in order to survive, to walk away from our founding principles -- the very reason for our being -- would be reckless.
Like all businesses, we're aggressively managing the short term, with an eye firmly fixed on the future. But things will never go back to normal. When the economy does stabilize, I do not believe that we are going to see behavior and attitudes automatically flip back to what they were during more prosperous periods. There's been a mental shift that will be hard to undo. As Prof. Quelch puts it, the temporary coping mechanisms people put into place to deal with the immediate crisis will take on a new permanence - "The Simplifiers" will grow in number, looking for experience and value for their hard earned money.
Still, in spite of the current market realities, I know some will question our decision, and I understand this reaction. Expectations from brands like Starbucks are high, and interaction with our brand is very personal.
Yet in spite of those high expectations (or perhaps because of them), we are confident we can disrupt and reinvent the instant coffee category -- introducing quality coupled with value. I believe that Starbucks VIA Ready-Brew is just that - and the proof is in the cup.
Howard Schultz is chairman and CEO of Starbucks Coffee Company.
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People do not come to Starbucks simply to have a cup of coffee. If that were the case you could just go to McDonald's or the corner gas station for that matter. Most come to spend time in a coffee house with a relaxed, comfortable atmosphere and basically very friendly, neighborhood people.....students, employers conducting interviews, women meeting with friends, business people with laptops. I used to love the fact that it was a "blue" company and offered benefits for as little as 20 hours per week when places like Walmart were encouraging their employees to sign up for Medicaid and food stamps to supplement their paltry wages. But my daughter, a longtime Sbux employee with a stellar record, was treated poorly in the past 90 days and laid off with only 3 weeks of severance pay while she trains her replacement to be manager of the store. This is not what Starbucks is about. and I am disappointed and dispirited.
I've never spent more than three minutes in a Starbucks. I go there because I can count of their coffee tasting good. I don't buy fru-fru (sp?) drinks, just black coffee. I have a couple of local coffee sellers I prefer to patronize so as to keep my money in my community, but if I'm out of town, I'll frequently go to Sbux cause I can count on getting a good cup of coffee there. The coffee at those other places you mentioned usually sux. So does instant. If that's what they're serving I'll start looking harder for the local shops that sell GOOD coffee. If what you say about their employment policies is true, well that's another reason to do so.
Meowww!! Many have predicted Starbucks' demise before. I'll never forget the big article in the Boston Globe years ago proclaiming how New England's beloved Coffee Connection would stomp Starbucks' attempt to move into the area. Their CEO scoffed at "Charbucks". Weeks later Starbucks bought them...Seattle's Best, Caribou, Peets, etc...bit players that are nothing more than footnotes. Yeah, they've grown too fast, made mistakes, it ain't like it used to be blah, blah, blah. The reality is, for all their mistakes, they've taught us what real coffee tastes like. Besides that, they were one of the very first and few companies that offered medical insurance for part-time employees. And they work with coffee farmers around the world to improve their lives and livelihood (Do you think McDonalds is doing the same?...).
So they're coming out with instant coffee... uggh. So don't buy it. Oh, and god forbid Huffingtonpost get "commercial".
>>that adapt to the changing needs of their customers, without forsaking their core values.
Core values for Starbucks = dramatically overcharging for your product.
With all due respect, Mr. Schultz, you will find in our brave new world, people aren't willing to pay you $4.00 for what others are charging $2.00.
Don't make instant coffee (yuck!), lower your darn prices.
I haven't drunk Starbucks in 15 years and I won't even consider going back until your prices drop. That's the new reality.
Well if you want to drink that eco-disaster Folgers put out by Proctor and Gamble (aka Heritage Foundation supporter) be my guest. I drink a cup or maybe two a day and savor it so for me it is going to be quality not quantity.
isis--there's a lot of middle ground between Folger's and Starbucks--an ocean of good choices.
The coffee is very overrated. I brew at home and carry a cup with me to work everyday. Suits me fine.
im not sure what the big deal about expanding their product offering is??
I agree with the poster above that thinks this is an ad. Why is it here? I don't frequent this site to read garrulous instant coffe ads.
It is a sad… sad day that Howard Schultz has lost his way. The Specialty Coffee Association of America should revoke Starbucks Coffee Company from SCAA membership privileges and all affiliation. Starbucks' past contributions to raising the American coffee-palette will be washed away faster than the time it takes to boil a cup of water! How comforting to know that there are many independent coffee house owners ready to grab their market share of those seeking exceptional coffee over swill.
The current generation of suits at Starbucks are killing the brand by introducing cheap coffees at premium prices and by ignoring customer feedback completely. It's not the economy so much as the failure to deliver on quality that is causing the Starbucks downslide. I can still afford (and still think it worth it to have it) quality coffee. Starbucks, however, seems to be cutting corners while keeping prices aloft -- a deadly combination.
Though once a fan of Starbucks for its introducing me and countless others to good coffee, I am now a lost customer. Its Pike Place offering is, IMHO, closer to swill than coffee. Furthermore, it sure seems to me that the quality of the rest of their line has been compromised. In any event, the many complaints that were on its old web site about Pike's Place and the loss of choices that Starbucks formerly offered throughout the day fell on deaf ears. Cutting corners on the coffee while charging premium prices is just not a tolerable combination -- especially now that McDonald's, Duncan Donuts, and even Burger King are offering superior coffee for far less and have the additional benefit of allowing you to offer a large coffee rather than a "venti."
The old Starbucks (i.e., of a bit more than a year ago) was, to me, worth it. The new Starbucks, offering Maxwell House quality at Starbucks prices, is not.
You could play 'corporate gibberish' bingo with that message. sheesh! Reading between the lines, it says 'we're drowning in red ink and we sincerely hope this trick will work. For a little bit. Maybe.'
I hope you've managed, in the new instant "product", to retain that distinctive "burnt" taste which tasteless yuppies find so addictive. Ever notice that people who say they're addicted to something, only admit to something really overpriced? Cocaine, sure; Nyquil, no. Dom Perignon, yes; Pabst Blue Ribbon, no. Starbucks, yes......
Starbuck's strikes me as the type of place that attracts serious posers. The kind of consumer that always looks to do things the "it" way, even something so simple as getting a cup of coffee.
See Val Brown's Profile
http://www.huffingtonpost.com/val-brown/just-brew-it-starbucks-in_b_167171.html
Just Brew It: Starbuck's Instant Coffee Gamble
See Val Brown's Profile
see my blog on this very site on this very subject :)
Yes! Starbucks going DOWN! Good news for my neighborhood coffeehouse! Real coffee.
Is this article an advertorial? It reads like a press release. If this isn't a paid ad it should be, and if it IS a paid ad you need to let people know that.
I completely agree with your assessment. Seeing that Starbucks swallowed up by favorite local coffeehouses in Boston way back when; I sincerely hope it fails at every attempt to remain relevant. I consider it to be the Walmart of coffee shops .
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