Wednesday, August 6 2008
Starbucks Will Not Roll In Clover
Ubiquitous ain't the word, mate. Image by Bernie Hou
Starbucks is doomed.
In the past I've been a vigorous defender of the corporation. Not so much because I've ever thought their coffee was the best (it isn't, although it used to be okay) but because they brought decent coffee-shop experience to a lot of otherwise backward places, like airports, or flyover country. If you travel a lot, the sanitised green and white mermaid sign is like a beacon of hope for hot coffee and a place to regroup and plan your next move.
Unfortunately they completely screwed up. There are a lot of business theories as to why they just lost 6.7 million dollars, like the fact that they chose to go after take-out consumers, alienating their early fans who now saw long lines and no interaction with the increasingly busy staff, too many new non-coffee products (I go to Starbucks for coffee, not egg McMuffin substitutes or CD's by whiney, self-involved songwriters) or the insane rate of store openings diluting brand recognition (note to CEO's and M&A fanatics: 'growth' is not a strategy. Unrestrained growth is cancer) but that's all MBA-grade nonsense. Whining about these issues ignores the really important one that no highfalutin' management team or marketing strategy can fix.
It's about the coffee, stupid. And that's where they messed up, bad.
First, they stopped roasting the coffee fresh and started exploring new ways to extend roasted shelf-life. Starbucks coffee is now a month old before it gets shipped to stores. Coffee beans more than three days old start to stale and lose flavour, regardless of what some egghead in the packaging department tells you. So, they started with stale beans.
Second, they quit grinding the coffee in-store. Pre-ground coffee stales much faster than whole beans. Plus, if you're really a coffee fanatic, you'll become emotionally aroused by the smell of freshly ground java. Strike two.
Third, they forgot to sell coffee. Between the fact that all of their food products they sell are insanely high in sugar, sodium, artificial ingredients and lethal levels of trans-fats, most of the 'drinks' they sell contain little or no actual coffee and are in fact thinly disguised milkshakes.
But Howard Schultz, Starbucks returning CEO (and the guy who got them into this mess) has a plan. He bought Clover.
An $11,000 Mr. Coffee
Regular WineBlog readers will recall my post on The $15 Cup of Coffee, wherein I described my first Clover coffee experience. When I heard that Starbucks had bought the Clover company (which means you've lost your opportunity to buy a coffeemaker that costs as much as a compact car, because Starbuck's goal is to prevent anyone else from using the technology, ever) I pondered whether it would help them regain their soul.
For about a second. Because this is more of the same from them. Instead of making good, freshly roasted, freshly ground, freshly brewed coffee, Howard is buying a pretty fix, and papering over the iceberg scar on the side of the good ship Startitanicbucks. Wired Magazine agrees with me too. From their article
A few days after my cupping room challenge, I'm standing in line at a hilltop Starbucks in Seattle's Queen Anne neighborhood – one of Clover's beta sites. I do a taste test: a cup of Clover coffee versus brewed coffee. A young barista tells me they're out of the first two specialty coffees I request and suggests instead Starbucks' everyday blend, called Pike Place. During brewing, the barista stirs the grounds into the Clover with a clunky rubber spatula – not a metal whisk – and pours the concoction into a crummy paper cup. I smell, I sip, I inhale. I can't tell which cup of coffee is which – and neither is anything special. Is it the beans? My palate? After a few minutes, I finally pick it out: This coffee tastes a little bit like hype
Ouch! That's a rebuke so stinging I wish I'd written it.
There's a parallel here for the wine industry. There's been a long-building move to engineer wines with chemistry, manipulation and (in some cases) fraud. Junk wines like Yellowtail and their ilk are manipulated and massaged and sweetened until they taste more like grape drink with vodka than a natural food product crafted in vineyards. Temporarily these wines will sell well, but every time someone makes a profit by offering a fake product 'created' in a laboratory or a marketing meeting, there's a competitor waiting to make it cheaper and faster, diluting your market share and forcing you to make even worse products at cut-prices to make profit margins happen.
And then the chickens come home to roost, and no superstar CEO or gimmicky machinery can stop a determined chicken.
| Posted by Tim AT 5:50PM | 0 Comments |  |
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