"With 37 years of experience, Starbucks is going back to where it all started. Roasted fresh, ground fresh and brewed fresh. Introducing Pike Place Roast. It's a pretty simple concept really. We believe that a perfect cup of coffee should be a fresh cup of coffee. We brew the beans every 30 minutes, making sure you're getting the best, most fresh cup of our newest, daily brew."
– Starbucks, 2008

"We have worked nearly 20 years to develop an intant coffee that offers customers the quality and taste they expect from fresh-brewed Starbucks coffee, and a unique and convenient way for them to enjoy it. [This is] an opportunity to reinvent a category, create new rituals and grow our customer base."
– Starbucks, 2009

Less than a year ago, after sharply declining sales and pending the closing of over 600 stores [NY Times], Starbucks announced a "return to form," with the celebratory launch of the Pike Place Roast and temporary vintage-logoed cups. They were supposed to streamline the business, slow the reckless expansion and go back to the basics of their mission — "It has always been, and will always be, about quality. We’re passionate about ethically sourcing the finest coffee beans, roasting them with great care, and improving the lives of people who grow them. We care deeply about all of this; our work is never done."

Oh, how times have changed. This month, Starbucks launches Via Ready Brew, their first instant, powdered coffee. This decision seems like a frantic, hail-mary throw along the same lines as their other ventures into deli-style foods and music. Adapting to economic hard-times is one thing, but what's confusing is Howard Shultz's proud statement that, "It just happens to fortuitously coincide with the downturn in the economy. It wasn’t planned that way."

In my opinion, it's a move in the wrong direction. I think they had it right last summer when the started paving the path of fewer stores and higher quality. Starbucks found early success by convincing people that coffee could be a luxury product; the coffee shop could be a luxury experience. What eventually led to their hard fall was over-expansion and unfocused ventures. Luxury products in general have taken a hit recently, but Starbucks' problems started much earlier.

While this off-brand move may provide an immediate sales boost as people rough out the economic situation, in the long run it will serve to further dilute whatever mental real estate Starbucks still had with customers. It's somewhat true that desparate times call for desparate measures, but I think they had bigger problems to worry about before bringing out the shotgun.

###

Back to Blog