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Starbucks "Everyday": Can We Afford That?


Starbucks “Everyday Coffee” offering is an effort to Dunkinize the brand a bit. Is that a good idea? To water down the brand, if not the coffee, is risky.

The idea here is that Starbucks has developed a new blend, Pike Place Roast, that it will have on hand all the time. Previously, if one wanted a “regular coffee,” there was a rotating selection of blends. Today, for 30 minutes, the chain offered free 8 oz. samples of the new brew.

Pike Place was blended to have a smoother, cleaner finish than Starbucks’ other blends. This goes to the most frequent criticism of Starbucks coffee by coffee meisters—that it tastes burned. Pity the folks who get Starbucks coffee off premise, either from catering services or in convenience stores. This stuff, brewed and stored in pump thermoses, is notoriously bitter and tired tasting. Howard Schultz visited BusinessWeek’s offices in 2005 where we had his own coffee on hand. “This was good…about six hours ago,” said Schultz, rolling the swill around in his mouth. We had it delivered right before his arrival. But that’s a lesson in how quality control can go terribly wrong when you relinquish it to too many far flung constituents.

Starbucks has been seeing McDonald’s in its rear-view mirror when it comes to espresso coffee. The fast-fooder launched McCafe, selling lattes and cappuccinos. Recently, it has begun running ads aimed at Starbucks, one featuring two women talking about how glad they are to be out of a pretentious atmosphere.

Last year, McD’s got a boost when Consumer Reports rated the hamburger joint’s drip coffee best. Of McDonald’s brew, CR said: “Decent and moderately strong. Although it lacked the subtle top notes needed to make it rise and shine, it had no flaws.” Starbucks didn’t fare as well, with tasters calling its coffee “strong, but burnt and bitter enough to make your eyes water instead of open.”

There has been a Starbucks backlash brewing for years. The coffee quality has been declining, especially as stores went from brewing coffee to pushing buttons on machines. The atmosphere of the stores has become all-too familiar. And with people so short of time, most stores are places to stop and go, rather than hang out.

The chain recently lost a class-action lawsuit brought by barristas who complained about the practice of Starbucks forcing them to share tips with shift supervisors. This is a practice forced on casino dealers by mogul Steve Wynn, as well, and it has cost both companies dearly. That’s not good company to share.

But the backlash is more than that. The atmosphere around the Starbucks brand has changed. The wind has literally changed around it. And that’s what worries chairman Howard Schultz. It reminds me a bit of the way the winds changed around Barack Obama the weekend before the Ohio primary. Obama had enjoyed a charmed run. People were intoxicated by his soaring rhetoric. But it changed. Obama lost Ohio and Texas primaries. He started to squirm over the video of his pastor. He suddenly looked ordinary, slugging it out with Clinton in the mud. The glow was off the brand.

It’s not for no reason that Obama and Clinton have been compared with brands in media reports: Obama is Starbucks, Apple and Chardonnay, while Clinton is Dunkin Donuts, Microsoft and beer. Obama has adapted to the new atmosphere by losing the soaring rhetoric in favor of bullet point speeches and eye-to-eye speechifying. One wonders if that will work for him in the end. Obama, in the end, must be Obama.

And Starbucks looks like its playing defense against McCafe. Yikes. Defense against McD's is not a good game to play. If Starbucks is going to hold on to its place in the brandscape, it needs to remain unmistakably Starbucks. That means make the coffee, especially the espresso (and, okay, Pike Place), the best Joe on the block. Keep the stores clean. Keep prices in check. Treat employees with common sense. And keep being Starbucks.

Starbucks recently launched www.mystarbucksidea.com, a digital suggestion box, not so much the social networking idea the company talked about when it began. The site has been lambasted in the blogosphere...again...part of the anti-Starbucks zeitgeist that has been building for a few years.

It remains to be seen if Schultz will be able to fly this brand kite in the changing wind.


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