Starbucks: Cutting Calories to Raise Profits

Starbucks customers ready to order a latte and cinnamon twist noticed a few menu changes this week. At 11,570 U.S. and Canada locations, five wholesomely titled new breakfast items appeared: "perfect oatmeal," "berry stella" pastry, "chewy fruit and nut bar," "multigrain roll," and "apple bran muffin." Select Starbucks even offer a "power protein plate" or "spinach feta wrap." Has Starbucks caught the nutritious bug?

Marketing these low-calorie additions as part of a "guilt-free" breakfast, these additions are high in whole grains, fiber, and Omega-3 fats, without high fructose corn syrup or any artificial flavors or sweeteners. Referred to as "Morning Source," this healthy fare is Starbucks' latest attempt to revive plummeting stock prices and a tarnished reputation.

CEO Howard Schultz led the way on this twenty-first century health nut bandwagon after experiencing his own mid-life, baby-boomer health scare. Schultz promises to reinvent the lunch and dinner menus in 2009, but I don't predict healthy snacks will prevent Starbucks' continuous decline in an unstable economy where even milk prices are soaring.

Humans have drunk coffee since the ninth century, and the brewed beverage first arrived in Europe in Venice in 1615. Coffeehouses were places where intellectuals met and debated, and thus coffee was associated with the upper class. After the invention of instant coffee in 1901, coffee went from the nectar of gods to a legal stimulant for the masses.

When Starbucks was founded in 1971, it offered brewed coffee and tea, whole bean coffee, tea and spices. Recognizing that people like choices, the company continued adding shots and syrups. Today, a customer's personalized creation is as individual as their fingerprint, but this has been a disastrous year for the former king of coffee. Starbucks cut one thousand office jobs, six hundred stores are closing (including eleven in New York City) and its stock is down twenty-five percent.

New Yorkers have experienced sticker shock since July's public health measure went into effect requiring fast-food and chain restaurants to post calorie information. Overnight customers learned their blueberry scone and grande cinnamon dolce frappuccino breakfast set them back 860 calories -- three hundred calories and over $3 more than a glazed donut and caramel swirl latte at Dunkin' Donuts.

After the installation of ovens for warm breakfast sandwiches backfired (the smell of freshly baked bread clashed with the aroma of roasted coffee), other than redesigning its iconic mermaid logo, how could Starbucks compete with the less expensive McDonalds' McCafés and Dunkin Donuts' espresso-based drinks?

In the latest Rasmussen Reports national telephone survey, 73 percent of adults say Starbucks Coffee is overpriced. 76 percent of adults say they visit the ubiquitous coffee shop rarely or never; 14 percent go occasionally and only 8 percent go in once a week. Starbucks tried to woo customers by inviting them to stay for a bite and surf the web, but according to the same report, 80 percent of adults go for the coffee, 5 percent for the food and 8 stay for wireless.

Today, "local" and "organic" have replaced "fast" and "easy" as buzz words and "healthy" just isn't enough. Eliminating refined sugars is good; homemade, gluton-free cookies are better, but not feasible on a corporate level. Fuel prices are high and consumers are feeling the pinch. Starbucks, Dunkin Donuts and McDonalds are monoliths struggling to adapt to consumer demands in an era where the pendulum is swinging back to quality over quantity.

It's time for both customers and companies to wake up and smell the calories, and maybe Starbucks should stick with what it does best: coffee.

Follow Louise McCready on Twitter: www.twitter.com/lmccready

Comments

[Huffingtonposter231]

I think in the future you will be seeing "Low Glycemic Index Levels" on such healthy items offered as a reason to buy their foods. Some overly refined flowers including some whole grain are WORSE then sugar in spiking your blood glucose levels and thus in causing your pancreas to try and spit out large amounts of insulin . We need to move healthy from not only balanced and whole grain starches to low glycemic because sugar isn't the only bogyman out there that spikes our glucose levels.

I'm glad to hear that they are offering some healthy items. Perhaps the day is coming when we can go out and stop into nearly any chain and get a healthy, balanced, low glycemic meal. But we sure aren't there yet, not even if we try.

So Starbucks over built, took too much risk, and is now cutting way back? Sounds typical doesn't it?

[daveftr1]

Lately, even the coffee isn't very good. They can start by dumping the pike's place crap that they are forcing on their customers. It used to be that you had a choice of brewed coffees to choose from, and now, in many stores the ONLY coffee they brew is the pikes puke. All of those fewer calories would be better served with quality coffee. Now I can't buy any of the brewed coffee in the local starbucks because I can't stand to even smell that brew, much less drink it. They have beans from all parts of the planet, which are sitting there, mostly unused, and since the flavor of coffee beans disintegrates from the time it's finished roasting, that is a a lot of flavor going to waste, while the crappy beans are brewed, which doubles the waste. If starbucks wants to bring stop the bleeding, it would do well to brew the quality coffee that it does have instead of the crappy coffee that nobody wants.

[JavaCityGal]

Just want to say that I love the new oatmeal, 140 calories, 4 grams of fiber and tastes good too! I live in Seattle, go to Starbucks once or twice a week, it is overpriced, but unfortunately we don't have Dunkin Donuts out here (miss it from NY!). I also have friends that work for Starbucks headquarters and are happy working there.

[AmandaRuth]

thats funny, because I know several current and former employees who work at Corp, and they all say it is run on a culture of fear.

[Huffingtonposter231]

sometimes a good manager or supervisor can shield their employees from a culture of fear.

[arcanepsyche]

As a Seattleite I am right in the middle of the Starbucks battle. I know for a fact that MANY of us go to Starbucks all the time. Yes, because it's quick and it tastes good. The calories are bad, but at least they're doing something right? It's a huge corporation, and they're doing what they should be doing: adapting to the market.

It can't be denied that they treat their employees better than almost any corporation in the country. And, those breakfast sandwiches...almost every one in line gets one of those every morning at the various stores I visit.

I'm not defending the calories, just the company.

[Kaira]

While I am a supporter of local coffee shops, I think it's great that Starbucks is trying to offer heathlier options for their consumers. Americans need healthy snacking options. However, I would have to see a nutrition guide before being conviced that their oatmeal is healthier than a biscott. Can Starbucks really add truly healthy option to the menu...?

[AmandaRuth]

support local coffee shops or buy your coffee at Mickey D's. Let Starbucks die a slow and painful death. As a Seattle native, i have watched what they have done to this city and know personally some people trashed by that corporation. They do not deserve anyones support.

[SWL777]

Being from the Northwest, I have seen Starbucks grow from a mediocre coffee stand in Pike Street Market to a megalith of mediocre coffee stores. Maybe they need to learn not to burn their coffee so much during the roasting process.

[msfisk2008]

9/4/08
2:55pm
UofO

Only 8% of customers go to Starbucks for the wireless because they have to PAY for it. The wireless access should be free because it is free in lots of other coffee shops.

[FlyTheBlueSky]

Wireless access *is* free at Starbucks. I use it every day.