Just the words Starbucks Value Meal send a chill down my spine… a chill of reality perhaps, the acceptance that the chain really is just another fast food company.
I’m quoted in the most recent Associated Press article this morning as saying “You’ve got a lot of options right now for the more price-conscious consumer to save money,” referring to the state of the specialty coffee industry. Look for the article in a newspaper near you.
However, there’s more to that statement: Although it may be demanded by institutional investors to lessen the short-term blow of a deflating economy, I consider the concept of a Starbucks Value Meal to be a disastrous step toward devaluation of the company’s brand equity.
Starbucks’ consumer loyalty is under attack from all angles right now: on the low-end of the consumer wealth spectrum, convenience drinkers have already left for the coffee offerings of their local c-store brand or dropped coffee altogether. On the upper-end, foodies and self-proclaimed coffee snobs abandoned Starbucks years ago for the offerings of Stumptown, Intelligentsia and a number of other regional micro-roaster / retailing businesses and independent specialty coffee shops nationwide. In the juicy middle, Starbucks is being flanked by McDonald’s, Dunkin’ and (believe it or not) the home kitchen for share of stomach.
I was unable to determine in 5 minutes of lazy online research if McDonald’s actually invented the concept of a combo meal or value meal (though, I believe it to be the case) — but if not, they certainly popularized it and it has been a central focus of their product strategy for decades.
Emulating McDonald’s is not the best long-term strategy for Starbucks to compete with McDonald’s. By admitting, essentially, that the McDonald’s combo meal model is better than Starbucks’ own menu and that the products are comparable, consumers are left to accept McDonald’s low cost option as a better value.
Accentuating Starbucks’ competitive strengths, namely a competency in specialty coffee, is the only way for the company to retain its consumer perception as a coffee specialist and emerge as the market leader once our economy gains its footing.