Fortune Magazine: Andrew Hetzel is Skeptical

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Not exactly a news flash for anybody that knows me personally, but with respect to the unveiling of Starbucks new Via instant coffee beverage, I’m apparently not alone. In Fortune Magazine’s article this morning, “Starbucks instant: Will it pass the taste test?” I voice my skepticism about both the approach and product, echoing the concerns of analysts from UBS and Piper Jaffray.

Is there anyone other than Starbucks marketing department that actually thinks this is a good idea?

Perhaps I and the other armchair analysts and consultants of the world are missing some part of the bigger picture. Perhaps the invention of a soluble coffee that will “absolutely replicate the taste of Starbucks coffee” is possible; but if so, is that really a good thing?

Does a company really want to minimize the value of their out-of-home coffees to be similar to what one can make in 30 seconds in their own home kitchen? Why then, do we need to pay $4 for a cup in the retail store — why do we need the retail stores at all?

Just because one can, does not necessarily mean that one should.

The message seems confusing to me and others in the industry, so I can only imagine how consumers will reconcile this new product with the company’s brand claim to be a premium specialty coffee purveyor.

When Howard Schultz returned to Starbucks as CEO in January of 2008, he made a number of positive, forward-thinking statements about his plans for the organization.

Schultz stated that his agenda will include:

  • improving the current state of the U.S. business by refocusing on the customer experience in the stores, new products and store design elements, and new training and tools for the Company’s store partners to help them give customers a superior experience;
  • slowing the Company’s pace of U.S. store openings and closing a number of underperforming U.S. store locations, enabling Starbucks to renew its focus on its store-level unit economics;
  • re-igniting the emotional attachment with customers and restoring the connections customers have with Starbucks® coffee, brand, people and stores;
  • re-aligning Starbucks organization and streamlining the management to better support customer-focused initiatives and reallocating resources to key value drivers; and
  • accelerating expansion and increasing the profitability of Starbucks outside the U.S., including by redeploying a portion of the capital originally earmarked for U.S. store growth to the international business.

He’s been able to accomplish the “slowing expansion” and “streamlining management” part and there have surely been numerous failed “new products,” but “re-igniting the emotional attachment” and “refocusing the customer experience in the stores?”

I find it interesting that the word “focus” or derivative is used 10 times in the short one-page announcement. Unfortunately, that’s the one thing that has been lacking from Starbucks since Schultz returned: focus.

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