Starbucks Rolling Out Instant Coffee – 2/13/09
Instant coffee is for amateurs, right? Don’t real coffee drinkers grind the beans from fresh and go to the coffee pot or preferably the French press from there?
Starbucks has built its business around the cachet of drinking gourmet brewed beverages but now the chain is rolling out a soluble (see: instant) coffee under the Via brand name.
The new instant coffee seems like a departure from Starbucks core identity but, according to three unidentified executives interviewed by AdAge.com, it will clearly differentiate from instant brands including Folgers, Sanka and Brim.
“It’s a breakthrough in soluble coffee,” a person identified as being “close to the project” told AdAge.com.
The development of Via is said to be the brainchild of Starbucks CEO Howard Schultz and is expected to get strong marketing backing from the company. The product, which is scheduled to be introduced at Starbucks’ annual meeting on March 18, will initially be sold in the chain’s cafes. There is no word if it will eventually migrate to grocery stores.
Discussion questions: Will entry into the instant coffee category dilute the Starbucks brand or is it the right product for current economic times?
Most will claim this just the latest stumble by Schultz and another nail in the coffin of their eventual demise. I disagree. First, the move into another aspect of their core product category is smart marketing. Second, there are many reasons for using instant coffee that has nothing to do with “the perfect cup of coffee”: An ingredient for recipes, quick coffee while traveling, and more. Finally, there is a huge instant coffee business out there for people who actually make instant coffee every day in their homes. A percentage of these will certainly be willing to pay a premium for this brand name. My only criticism will come if it is launched only in the cafes. It belongs in the grocery store along with Starbucks whole and ground bean coffee, ice cream, and bottles of Frappuccino. The stock may have stumbled and their mystique has become a bit damaged, but there are still long lines at most Starbucks stores I frequent. I predict they will be just fine, and will have the last laugh as the economy improves and even before.
Mike Osorio, your Dare to be Contagious! TM strategist
Go to the full discussion at RetailWire.com:
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