03/19/2009 05:12 am ET | Updated May 25, 2011

Just Brew It: Starbuck's Instant Coffee Gamble

Presumably they've done scads of consumer research preceding the development of Starbuck's instant coffee. But I'm a little concerned, from a professional point of view. What's this going to do to their brand?

Starbucks built its enviable and omnipresent brand on two things: the quality of their coffees (which I've always found a bit bitter) and the experience the cafes offer. Their commitment to fair trade with coffee growers plays a role as well. They have great brand equity. Price is their only downfall, but you are paying to nurse a beverage for hours if you like. It's the business model that European cafés are based on.

Of course, many people do not actually consume their Starbucks beverage in store, though they do get some of the ambiance while waiting on the 8:50 am twenty-deep line for their skinny caramel macchiato (extra hot). And there are Starbucks brand extensions already (ice-cream, Frappucinos) that are available in grocery stores and consumed in-home. So the instant coffee packets they are going to sell in-store -- and presumably their plan is to be in supermarkets everywhere -- are not their first foray away from the "experience."

But fresh brewed, ground-from-beans-that-very-day-coffee is their stock in trade. They run a great risk of diminishing their brand by offering what is in effect the antithesis of their core product. Their assertion that people can't tell the difference between the two doesn't matter.
Instant coffee has a bad reputation in the United States. Remember Mom with watery Sanka (when she wasn't revving up on Tab)?

I don't know anyone who drinks instant coffee here. So Starbuck's really big task is to change US consumer perception of an entire product category. Their competitors, who already have real estate on supermarket shelves across the nation, will be very thankful if Starbucks increases the overall size of the market, and on Starbuck's dime. It remains to be seen if the chain will grab shelf space and market share, assuming that is their plan. I hope they've got a lot of marketing money behind this. They'll need it.

Certainly, they really have their eye on international markets. In the UK, for example, instant coffee has no stigma and makes up more than 80% of the coffee drunk at home. After turning my nose up at it when I first moved there, I became a convert. But I wouldn't be content with a measly pre-measured Starbucks packet -- I want a jar where I can jolt myself with three tablespoons. The English will expect to be able to buy this in jars.

There are Starbucks beverages you can't get in the UK because there is a stigma attached (like my favorite, iced venti-no water- light ice-unshaken-unsweetened green iced tea). So there's no reason they have to launch instant coffee in the US. I think they would've been safer launching abroad first. Or only. Time will tell. I'm sure there are great marketing minds at Starbucks who've dealt with all these issues. But I'll bet there were dissenters as well.

I look forward to seeing the campaign.