Commentary: Starbucks Via Instant Coffee – Breaking the Brand
Friday, October 2nd, 2009
Issue: How Via instant coffee completes the transformation of Starbucks into a convenience brand
Commentary by: David Vinjamuri
This week, Starbucks announced “Via” – a new instant coffee. The launch advertising was acceptable and the product has been favorably reviewed for taste. But what does it mean for the Starbucks brand?
This advertising blog has long argued that a succession of financially successful Starbucks innovations, from blockbuster grocery store products like bottled Frappuccino, Starbucks carts and even drive through windows all dilute the Starbucks brand. Even small-footprint Starbucks which drew long lines of commuters in the morning changed the “third place” atmosphere that was Howard Schultz’s essential contribution to modern American culture.
Via is not really a diversion from the Starbucks brand strategy. It is really the culmination of a series of steps that have taken the brand away from its original mission. Starbucks has now emerged into the full light of day as a convenience brand. It will continue to compete head to head against Dunkin Donuts and McDonalds to own the morning convenience consumer and now adds Taster’s Choice to the list of packaged goods brands it counts as direct rivals.
It is hard to argue with the financial wisdom of this choice. Starbucks as Howard Schultz first imagined it would be a much smaller company. But the Starbucks that is emerging from this brand evolution is a weaker brand, more General Motors than Porsche. Margins will be smaller going forward although revenue will most likely grow.
This last development is most surprising given Mr. Schultz’s recent return at the helm of the brand. It may signal desperation, but more likely a sign that the corporation is looking to be acquired. Don’t be surprised if a food giant gobbles up Starbucks soon, and ends the dream of empire that started in a coffee bar in Italy.
