Does it Matter if Starbucks Sucks? (Yes. A lot. And More Every Day)

Howard Schultz knows a thing or two about creativity. Historically, he invented the idea of mass-market coffee houses. As CEO, he was the original architect of Starbucks' glory. But Starbucks has hit the wall: limp earnings, weakening stock price, declining quality. So early in January, after a few years languishing as its Chairman -- and writing memos that famously decried the "watering down of the Starbucks experience" -- Schultz jumped off the bench, booted his CEO, and anointed himself CEO as well.

A returning CEO gets a big buildup, and Schultz is no exception. He promised to bring "creativity, innovation and excitement" back to Starbucks by focusing on -- you guessed it -- the customer. And he'll prune expansion, introduce new products, and more. Investors responded with a "Howard bump" that lasted as long as the foam on a cappuccino. And most analysts and smarties had the same reaction: Schultz's ideas won't work.

Why should you care?

Because Starbucks is not just another company that mainlined growth and ran its business with one eye on the stock price, only to saturate the market and lose its way. It's the one public space in America that's the natural heir to the venerable Kaffeehäusen of Vienna and cafés of Paris. People came together in those European coffee houses less for the liquid refreshment than for the intellectual jolt; the café was where ideas were launched and discussed and sent out into the world. In a word: The cafe was the blogosphere of the 18th and 19th centuries.

Starbucks was once a place like that. You walked in and smelled the burned coffee beans -- Schultz made over-roasting a corporate signature -- and somehow felt that you were surrounded by bright, lively people who were about to get much livelier. That made Starbucks "the third place" it desperately wanted to be: not home, not work. You might meet someone there. You might learn something there. You might, like the characters in Friends, gain a hangout and a community. Whatever, getting coffee was the least of it.

Gourmet coffee, once a special experience, is now a commodity. McDonald's is adding baristas. Dunkin' Donuts wants to make your lattes. Neither is a place where most customers will go to converse about anything. So if we are not to lose the one hope of random, real-world community, we have to care about Starbucks -- or think of other ways to create that vital experience.

It's interesting that Schultz professes to love Starbucks customers but has no apparent interest in hearing from us. How's that, Howard? You're going to thrill us without getting our input? Do you really think focus groups, consumer research and executive offsites will tell you what you need to know? What, exactly, do you think the Starbucks website is for?

In The New York Times, Joe Nocera sent Schultz an open letter. In it, he pointed out the company's contradictions. He criticized its expansion plans. And he bluntly told Schultz to forget about Starbucks as a "sexy growth company" and simply tend to its core business.

This is what Schultz is doing, just in ways that seem exactly wrong. And so, in the interest of stimulating the kind of conversation that was a daily occurrence in Viennese and French cafés, here are some ideas that might be useful for Starbucks --- or an ambitious upstart --- to consider. Feel free to weigh in with your suggestions.

Define the "distinctive Starbucks experience"

Starbucks now sells high-end food and offers music several notches better than the pop on radio, but none of that matters as much as three spirit-deadening realities. First, the cookie-cutter design: Most Starbucks stores are uniform and antiseptic. Second, the disconnect from the product: Starbucks no longer grinds beans on site, so there's no pungent coffee smell. Third, the ambience: Whenever I go in to a Starbucks, I don't see humans connecting, I see permanent strangers going online or chatting on their cell phones. Starbucks, once a destination, is now a Hot Spot, as chilly as an airport. Its stores need to feel warm and local again.

Those who use Starbucks as an office will hate me for this, but no matter -- the Starbuck sitters look to me like upscale cousins of the sad sacks who gravitate to the reading room of the public library on cold days. I'm not saying these office-away-from-home customers have to go. But there needs to be more happening at Starbucks to make their visits a lot shorter and the stores a lot more energetic. My thought: End the corporate headlock on creativity. Localize. Let the manager of each store figure out if he/she should invite musicians to play or writers to read or.... whatever. And when the managers figure out what does and doesn't work for them, have them share it with others. There are 15,000 Starbucks stores. Let 15,000 flowers bloom.

Create the next distinctive Starbucks experience

Starbucks cannot compete with McDonald's and Dunkin' Donuts on price. That gives it no choice: It must differentiate itself on quality. And it has never been easier than right now to do that --- the "real food" movement championed by Michael Pollan and Nina Planck gains converts by the day. And it will gain more and more with every article about legalized animal cloning and the degradation of our food.

Starbucks sells some "fair trade" coffee, but most isn't. Why not be the first to use only coffee that wasn't grown by exploited workers?

Starbucks should own the "organic" category. So why is Starbucks about to stop offering organic milk in its coffee drinks?

Starbucks will soon sell PepsiCo's Naked Juice juices and smoothies. Not a surprise; the former CEO of Pepsi is on the Starbucks board. But that probably means the end for Odwalla drinks --- which somehow seemed crunchy and human-scaled --- on Starbucks shelves. Deals like this hardly make a Starbucks feel soulful.

A corporation...soulful?

The crux of Schultz's dilemma is that Starbucks was once a community play, and a community play touches the heart and the imagination. That's as it should be --- a store that brews coffee can veer, at any moment, from a caffeinated office to Match.com with froth to a poetry slam. Management, however, wants to define what community means. I understand that impulse; corporate executives thrive on order and control. But the simplest fact of American life, now and in the years ahead, is change. Some will be economic. Some will be environmental. Much of it will feel disruptive. Little of it can be accurately predicted.

So this is not a moment for PowerPoint jockeys, or corporate planners who are wedded to their vision of the future, or even CEOs who made history once and think the right answers are carved in stone. It's a moment to experiment and probe, to stumble into the next great idea. Above all, it's a moment for transparency, authenticity and open, two-way communication.

America needs a place where coffee may be expensive but thought and speech are free. That was once Starbucks. It may yet be again. And if not.... well, nature abhors a vacuum. Maybe it's time for 15,000 coffeehouses that have 15,000 different names.

Your thoughts?

-- republished from HeadButler.com

Comments

[nchapmansf]

I love Starbucks. I love the coffee and I love the ambiance. I love the muffins, but the other pastries, well, not so much. I love the people who work at SB, for the very most part. I love it that when I want a great cup of coffee, SB rarely ever disappoints me. I've been going into Starbucks weekly, sometimes, daily, since it was "invented." I've never found anything else that makes me as happy (drinking coffee-wise) as relaxing in SB, having a cup of coffee and listening to the music for a break. Or, chatting with a friend. And, occasionally, I have a conversation on my cell phone, but I keep it low. And, most people do, actually. AND, SB coffee does not suck. If you don't like it, good grief, don't drink it. I probably would hate the kind you like. But, that's okay.

[AnnMedlock]

In all this chain v. local discussion, I keep seeing one of my favorite Sopranos scenes--Paulie and another thug go into a gentrifying part of Newark and threaten/hustle the manager of a new chain coffee shop (unnamed but clearly Starbucks). It's a rough neighborhood, they tell the manager and he'll need protection so nothing bad should happen to the staff/the store. Young manager looks at them and explains that every bean in the store is on a computer in Seattle. If he gives them money, he's fired in minutes. Same for his replacement. The thugs are stunned. On the sidewalk, defeated by corporatism, they sigh: "It's the end of the Little Guy."

[Schlomo83]

Mr. Kornbluth:
This is a false statement regarding howard schultz: "Historically, he invented the idea of mass-market coffee houses."

There have been franchise coffee houses all over the world, long before schultz stuck his boil on the face of too many countries. Starbucks WAS to the late 1990's and first couple years of the 21st century what bluejeans were to the world in the 1970s.

Robert's Coffee (Paulig famly) in Scandinavia has been around for more than a century.

Schultz is hardly a ground-breaker.

And the coffee is 80 percent over-priced.

[sickofitall]

odwalla is awesome !!!
i hope they can survive without starbucks !
long live odwalla !!!!!!!!!!!!!!!!!!!!!!
(the best tasting protien drink on the market today- odwalla's super protien !!! the strawberry c-monster is great, too ! and the b-monster !)

[NeverRight]

I'm sitting in this lovely little coffee shop/bookstore, using their free internet connection, flirting with the coffee girl and reading this article.

You want the silliest thing. You want a guy worth $1,100,000,000.00 (wiki estimate) to create "local" buzz. If they would just go away, you'd have it - you DO have it! The nice people that run this successful cafe in which I'm sitting are doing just a dandy job thank you. Next to me midshipmen chatting about anything but the Navy. And I think the guys over their are having some bible fellowship. And there's a young man using one of the public internet terminals that they provide - for free!

Stop wishing for Starbucks to be all that it can be (it can't.) Just go down to that little shop with the name that's a pun - the buzz grind bean cup. Their coffee is probably not burnt anyway.

[MidnightMike]

I agree--Starbucks really has taken a dive, and the worst thing is that you don't smell the ground coffee anymore. I can get better coffee cheaper at the local shop or even at Panera Bread.

[kells1001]

Starbucks is plagued by the inability to squeeze out small time coffee shops. Even my Church is starting a Coffee Shop. I have another friend who swears he can get the best there is from Columbia on the cheap.

I've always been impressed with Starbucks and know they will have to do what all companies eventually do which is to start closing unprofitable shops. Ironically Starbucks's weakness may lie in its moral conscience. They have apparently not learned the benefits of monopoly and oligarchy which tend to drive out small time competitors. They should know better being based in Seattle.

[dannyS]

you're saying that Starbucks should localize and personalize the "experience" but I don't see that trend anywhere in the American consumer landscape. At this point everything is cookie cutter and corporate. the only novelty is what is new, but what is new is also almost certainly another chain.
its the "global economy"

[greensmile]

it may be that a company as big, and as dependendent on the perceptions of its investors, as starbucks has no freedom to do the soulful reinventions of its product and format as Jesse suggests. All of the suggested "improvements" in its supply chain and product quality are long since in place at vendors like George Howell's Terroir Coffee
[ http://www.terroircoffee.com/store/ ]

None of those Vienese coffee houses Mr Kornbluth alludes to were parts of some giant chain nor geared to pleasing shareholders. Bigness and corporateness are, IMO, at odds with the qualities he pines for.

[pixeltech]

These are such great suggestions, and such a solid expression of someone outside of Starbucks corporate culture. I truly hope someone with an open mind at the company is reading this article, and thanks to HufPo for including it!

Having followed many of Schultz' comments over the years, it would not surprise me in the least if many of these ideas were not reality after he's had some time to have some influence...

[renaccio]

I live in Italy and last year I visited the States with my italian sig.oth. I took him to a Starbucks....for the experience....It was incredible to him. The lines, the prices...even I couldn't figure out what to order. No European experience here! I can get a lovely latte and a fresh panino or pastry for less that 3 euro here, less if it's just coffee and a pastry...the coffee is superb(served in a proper vessel) the food is fresh, no internet baloney,no obscenely priced mega drinks with infinite options, no product hype..there are bathrooms, no corporate cookie cutter stuff... the owner is the one who's serving you the coffee and the place has probably been around for decades. Read the paper, watch the calcio, rub shoulders with the locals.
Starbucks is certainly not the European experience. I have to say that I was a little embarrassed by it all.

[rboylern]

It is for the reasons you mention that I avoid Starbucks. It's not at all friendly. I much prefer my local tiny coffee shop around the corner. I can get a decent cup of coffee and shoot the breeze with all kinds of people. Is Starbucks ever going to figure out how to make a decent cup of coffee? It all tastes like watery swill to me.

[DavidRives]

Any company that, when they run out of Splenda or Equal or Sweet 'n Low, rather than going out and buying some of the 100 million or so packets being sold at retail a mile or two from a given store's front door, or borrowing a few thousand packets from another Starbucks just down the street, instead has its baristas look you in the eye and say: "You can't have that. We ran out, and our truck isn't coming till next Tuesday. Sorry." At which point, the customer pictures in his mind the SKIDS of Splenda/Equal/Sweet 'n Low he just saw at his local Costco/Sam's Club -- or the hundreds of boxes of each on the supermarket shelves right next door (if the Starbucks store hasn't been able to afford the 40 bucks it takes to become a member of the warehouse club)!
Any company that considers that a perfectly-OK way to do business is, quite frankly, not long for this world, I don't care how many stores it currently has.
And please don't get me started on the Starbucks that ran out of CUPS, and was telling people: "We can't sell you any coffee. We can sell you pastries, or coffee BEANS, but we can't sell you any brewed coffee or specialty drinks, because we ran out of cups (!?)" True story.
Wonder whose business brainchild that was: making it preferable to turn away coffee drinkers from a coffee shop because you "ran out of cups" rather than, oh I don't know, BORROWING some cups from a Starbucks one block over?

[jasket]

How about some free internet at the starbucks. Unless you're T-mobile you can't connect.

[UffdaDave]

I have sent numerous emails and mail-in cards to Starbucks -- usually with the opening request that they start kicking their marketing geniuses out of their high-rise offices and make them do some work at the street level.

I usually end up at a Starbucks between 6 and 7 am. I go there for coffee and to read my paper. I'm constantly asking them to turn the damned music off, or at least down until 10.

And I would be thrilled if they would make an honest attempt at a snack other than the high-priced, high-cholesterol, high-sugar crap they usually carry.

I kknow I don't have to go to Starbucks but the only other decent coffee shop in my little town shut down about a year ago -- and not because of Starbucks but because of bad management. The Starbucks in my little town is the only place that opens early enough to satisfy my morning rituals.

I suppose if I had the where-with-all to start my own coffee shop I would do it, and open it as close to a Starbucks as I possibly can, then I could run my shop without the damned loud music, offer good food, and make it all happen with the help of the Starbucks effect (read the article, Why Starbucks actually helps mom and pop coffeehouses, in Slate -- http://www.slate.com/id/2180301/). It will make you want to open your own coffeehouse.

[Crowhaul]

Starbucks ceased being cool a few years back. Hard to believe that somme people still put themselves thru the 'venti this' 'frappa that' bullshit anymore...

[chinohillster]

The modus operandi of most suburbanites is to drive their car into the garage, walk into the 3500+ square foot single-family house, turn on the TV, and zone out until it is time for bed, and the walk out to the garage in the morning to repeat the process.

When people DON'T talk to their neighbors, DON'T allow their children to play outside, DON'T join civic associations, clubs or even bowling leagues - how can it be expected that Starbucks or ANY public place would be a local gathering place?

Chino Hills (population 78,000) has EIGHT Starbucks - several drive-throughs, several located in supermarkets (Albertsons) and chain stores (Target) - coffee is the afterthought to the MAIN business of SHOPPING!

[lungfish]

I love coffee, I live on a coffee farm on the Kona coast. I pick it, dry it, peel it, roast it, grind it and drink it.
I came from SF Bay, an area rife with coffee houses, and enjoyed many a morning with my paper and cell sipping at Cafe Strada, Cafe Med, Au Coqelet and other true coffee shops.
I tried Starbucks several times and found the product bitter and unpalateable.
Further, the place crawls with noisy, iced coffee sipping folks who are not my choice in company and their kids.... Much of the menu belongs in an icecream shop or dessert menu. Starbucks is to coffee as McDonalds is to haute cuisine... its crap.
You can dress it up all you want, it will still suck.

[pastacooker]

Good point, I drink tea myself. Perhaps the Starbucks local connection should come from bee keepers. The promotion could play the connection to health, wellness and honest local hands. There's a bee keeper around the corner from most every Sarbucks location.

[ProudLiberalDemocrat]

Funny, I just made some comments on another post regarding Starbucks connection to low cost energy....

Mr Shultz has vision. Sometimes its blurry. Write-downs from dot.com strategy lost many investors. He promises to deliver an improved and reminiscient customer experience. He must first do this to build the platform of success to reach his goal of 40,000 locations.

If McD can again achieve success without visionary Ray Kroc or Coca-Cola without Robert Woodruff or Mr. Goizettado (sp?), I believe that Mr. Schultz can pull it off......

[Hg1andPk2]

Great ideas. Unfortunately, we have a typical case of CEO-dom. The CEO is the self appointed god of descisions (George W. fits this bill nicely too). In these situations, it wont matter if you spell it out step by step as you have so eloquenlty done here Jesse. The bottom line is that we are dealing with CEO-EGO and nothing will change. And when the real shit hits the fan, like earnings have fallen because none of us care to pay to hang out in the overpriced, understimulating (irritating) lemming lines, this CEO, like all the others lately (Angelo Mozillo of Countrywide comes to mind) will simply pull up his little pantaloons and tippy through the tulips to whatever retreat he has in the Greek Isles or worse, try playing Big Decider Boy again for whatever new company strokes him as he weasles his way in.
Nonetheless, I liked the fantasy of a local interest hang.
Thanks J.

[WildDog]

Find me a large corporation that listens to the consumer? They do not take calls or emails directly; I don't believe they care what we think? I believe they think they can tell us what to think.

At 67 I've been watching what used to be called travelogues and for years all I saw was Toyota"s, Nissans and Mercedes in foreign countries. So I made every effort that seemed possible to talk to the "The Big Three". See how old I am, they were The Big Three, and could not by any method known to me to reach anyone.

I wanted to know why The Big Three could not produce an automobile that would sell outside this country?

Oops, they are not The Big Three anymore.

[jefegeoffe]

Starbuck's, and this columnist, are both too self-absorbed. While I can appreciate that Schultz up-marketed the local urban cafe experience to a broader audience (for an astounding profit), it's always been a little twee for me. And I take a personal affront at the "sad sacks" library reference! I can think of few things more civilized and gratifying than a group of people reading in a communal place, comfortable together in grateful solitude and silence. Ppphhhht!

[KPinSEA]

I live about a block from the Starbucks at the beach in Alki (Seattle). Yes, it's convenient on that horrible day when I wake up and I'm out of coffee ... I can put on my sweats, run down to the beach and get another pound of beans ground for me (they still grind in the stores I go to).

But no, I don't go in to Starbucks to sit and enjoy coffee that often. First, because the music is simply too loud: here's a hint store managers -- if it's loud enough that I can feel the table vibrating in response to the bass, it's too loud.

Second, because Starbucks crams more and more non-coffee CRAP into their stores, making them mini Targets. The funniest part of this is that you can't buy actual coffee FILTERS at Starbucks, but you can buy cheap Chinese toys and CD's there. If I want to go shop for cheap Chinese crap, I can drive to Wal-Mart, but strangely enough I usually just want to go to a coffee shop for COFFEE.

Third, at some point in the last couple years Starbucks became a daycare center, and it's virtually impossible to go there and try to relax without being seated near a noisy baby or unsupervised child wandering all over. If I were dining at Chuck-E-Cheese I'd have no cause to complain, but the "atmosphere" one used to associate with Starbucks was not the odor of a diaper being changed.

Finally, of course I'm a former Sonics fan who is never going to forgive Howard for screwing over this city with his handling of our beloved NBA team .... he should get a finger caught in a bean grinder, but lacking that, he gets a decidedly different finger ... and reduced business ... from me.

[OhgReaTone]

Having a cup of coffee is not just a McDonald's experience - and that is what Starbucks tried to create - ultimately mom and pop coffee houses are the only way to go.
Ohg
http://thefiresidepost.com/2008/01/12/coffee-and-the-american-gourmet-experience/