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Has Starbucks gone off the rails?


 

Rumors about the new Starbucks instant coffee have been brewing (har har) for a while, and so it was when I walked into the usual place this morning that I was confronted by this on the door:

starbucks

Standing in the slower-than-usual line, we were accosted, one at a time, by a pushy employee brandishing a tray full of paper shot-cups full of the new instant drink. It was, she assured us all, a) delicious, b) indistinguishable from the regular Starbucks coffee, and c) half the price. Same deal when we got to the counter: normally pleasant baristas turned into glassy-eyed caffeine-pushers. I asked the floor manager what the deal is with the new coffee, and he claimed, again, that it was literally just as good as the regular coffee.

So it has come to this: Instead of trying to upsell its customers from regular $2 coffees to complicated drinks that cost as much as $5, Starbucks is now trying to downsell you on little packs of fancified Folgers.

Things have been tough for Starbucks for a while. It expanded too much, made some bad decisions (like moving to automatic espresso makers) that killed the authentic-coffee-shop ambiance, and it has been experimenting with stuff like non-branded cafes.

And I can see why the company — which has long fought against the perception that it is the home of the $4 coffee — might think that a cheaper, instant drink might be a way of bringing in more cost-conscious drinkers, especially in the recession. But I really don’t like the way they’ve executed it.

First: They are being way too pushy about it. When someone is standing in line preparing to drop five bucks on coffee and a muffin — that is, gearing up for what is for many people a serious morning ritual — to have someone trolling up and down the line shoving shots of lukewarm instant in your face is a really bad idea.

Second: Whoever thought up the “just as tasty as our regular coffee” selling proposition should start cleaning out his or her desk. That’s insane. Same great taste at half the price? Way to defend your price-point, guys.

Third: This  “taste challenge” thing is seriously lowbrow. It’s going to remind older customers of the Pepsi Challenge, and simply put off anyone who up to now has thought that a two-dollar cup of Verona is worth it. What’s the goal here, to make your customers feel stupid for paying double the price all these years?

Fourth: It’s not clear the company gave a moment’s thought to the connotations, for Canadians, of the VIA brand name, which is associated with slow service, bad food, and inefficient government management. VIA, the drink that wastes your time and money!

Fifth: The one sure market I can see for this stuff is campers, hikers, and other outdoorsy types for whom camp-coffee is as hassle, and camping-espresso makers are too yuppie. I can also see students, low-income customers, and maybe mid- to low-end hotels putting it in their rooms.  But I’m not sure Starbucks should be selling this stuff in their stand-alone stores, where the only outcome can be that it dilutes the brand and cannibalizes more expensive sales.

This may not be a fiasco. But it tastes like one from here.


 
Filed under:

Has Starbucks gone off the rails?

  1. As part of the Ottawa creative class, you apparently just don't get it.

  2. 6. They are selling the "Via" packets in the MOST packaging possible. Not the wisest move when most companies are at least trying to appear to be adopting more sustainable practices.

  3. You know what? They don't care in Seattle what Andrew Potter thinks about the name VIA. In the grand scheme of things, it just doesn't matter. Their target market is the US.

      • Actually, you were more correct than I was – they apparently see this product more for the UK/China/India/Russia markets. Good interview on CNBC.

        http://www.cnbc.com/id/33077762

    • This makes no sense.
      If anything about your comment were true then Starbucks wouldn't have bothered to team up with VIA in the first place. The fact that the Canadian arm has teamed up with VIA, infact proves that the company does care about how it markets itself in other countries.

      Their primary market may be the U.S, but they can't write-off all of their other locations. Any global company that took that approach would quickly find itself NOT a global company.

      The fact they have teamed up with VIA shows they do care about the Canadian market – but, as Potter has said, that they may not know too much about it.

  4. How amny of the 49 countries and 16000 stores link VIA with what you claim?

    I live in Canada, and I have ridden VIA, obviously not as much as you, and I don't see the link that you suggest.

    • I don't see how you could miss it.

      I thought the story was going to be about Starbucks coffee being served on VIA trains from the picture. Until I got to Potter's fourth point, I was still trying to figure out what all this had to do with VIA Rail and, if nothing, then why Starbucks even mentioned them in their sign.

      • VIA" Ready Brew

        Notice the trade mark over the VIA? If there was any reasonable question of confusion by consumers, it wouldn't have gotten the TM.

  5. The marketing guys couldn't sell "Starbucks Eurail"?

    • Rejected test names for cheap Starbucks instant coffee

      Starbucks Gigli
      Starbucks Blagojevich
      Starbucks Extra-Palin
      Starbucks Special Coderre Blend
      Starbucks Le Royal Ségolène
      Starbucks NHS
      Starbucks Yeltsin

      • Nescoffee got the thumbs down at legal.

  6. I have no doubt "Amtrak" would have failed the first round of the focus groups…

  7. It's a product launch, instant is a shockingly large percentage of the market, and they're really going after sales in other locations – just as they do with their whole beans. I questioned the suitability of the extension, but the product roadmap seems to make sense now that they've given more details.

    As to the name – meh, there's always one market that has negative connotations for your brand, and it's better than NOVA in Brazil. Plus, you're assuming that VIA Rail has a large brand – not something I'd want to bet on, especially in the face of serious marketing efforts from SBUX

  8. I dont think so, check this out. .some one is tracking all the buzz for this new coffee on Viralheat http://bit.ly/QkCDp

    • Looks like things are working out well for Starbucks VIA. Good numbers

  9. oh brother.

    right, starbucks should really care that VIA is the name of a train in a small market country. big whoop.

    secondly, i've had this available in my city for several months now. know what? it's not bad, and i've purchased some. and i never would have tried it if the baristas hadn't coerced me into trying one early on.

    sheesh, talk about much ado about nothing.

    • He wrote a blog post. What, precisely, would constitute little ado?

      • fair point.

        still, i think complaining that you are being offered free shots of coffee while lined up is a bit much. but that's me.

  10. As someone who held a large amount of disdain for starbucks for years, but drank there occasionally for the convenience factor, I began to find in the last 6 months or so that their coffee sucked way less. I finally discovered that apparently they had changed the distributor they buy all of their beans from and were getting much better quality stuff. A quick google finds nothing to corroborate this, but it seems to make sense.

    • sometimes when people don't know what they are talking about they should just not open their mouths…

  11. "the VIA brand name, which is associated with slow service, bad food, and inefficient government management."

    I didn't even get that far in the thought process. All I could wonder about was why Starbucks was teaming up with a crown corp to sell coffee. Made no kind of sense.

  12. All this means is, at least in Ottawa, that Bridgehead Coffeehouses and other organic fair trade coffeeshops will recieve the displeased customers. Let's face it, Starbucks had a choice to go niche or mass market. They made their choice. Organic and fairtrade coffee would have been a better path for Starbucks but that would have meant less profits. It's actually hilarious to think about how large scale companies like Starbucks and McDonalds try to sell the lowest quality product that we as consumers are willing to tolerate and mark it up to price that we are willing to tolerate. If consumers took a little more time (possibly utilizing the great knowledge of coffee enthusiates on the net) one could find the standard of good coffee and integrate into their purchasing criteria. But we're all convience kings and queens.

    • You mean Rahim Jaffer will be called back to handle the overflow crowd at the Grabba­jabba? Finally, the guy catches a break.

    • starbucks is fairtrade just not recognized as fair trade cause it cost more money and they would rather give that money back to the farmer…

  13. Maybe with Iggy's announcement to have high-speed rail in his platform, Starbucks wanted to take advantage. Those high-speed passengers will need some high-speed coffee.

  14. If I want instant coffee, I'll make it at home. Starbucks coffee is a) overpriced b) often bitter and c) not as advertised.

  15. Most of the people I have talked to about starbukcs coffe say the same thing: their coffee is gross, but their espresso drinks (and frappacinos and tazo teas) are what's good. So maybe coffee, instant or otherwise doesn't make a ton of difference?

  16. What do I care? I haven't had a decent cup of coffee since the '40's

    …from an SCTV sketch featuring well-known critics. MacLean's: take note.

  17. starbucks was the biggest and the best, now it’s making sanka instant??

    LOL.

  18. Judging by some of the political articles you've written lately, I assumed you were a Tim Hortons man.

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