Commentary: Starbucks Via Instant Coffee - Breaking the Brand
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.
October 2nd, 2009 at 10:14 am
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October 7th, 2009 at 1:59 pm
there’s a great article about the new starbucks product over at the naming & branding blog ‘on the button.’ have a look: http://onthebutton.wordpress.com/2009/10/06/starbucks-via/
October 17th, 2009 at 8:09 pm
David makes interesting observations about Via and its place in the Starbucks branding strategy, most notably that Via is a continuation of an evolving move away from the original Starbucks brand strategy. I wonder, however, whether this move was inevitable given the scale of the Starbucks brand and the entrance of new competition in its core space over time. Early on, the story goes, Howward Schultz struggled with the decision to permit Baristas to make low-fat expresso drinks, fearing the trade-off in taste would diminish the core essence of the brand. My point is that over time, the core brand itself has migrated. The “third place” vision that has become synonymous with retail Starbucks locations was not necessarily the true original vision of the brand. Orginally, it was about bringing the excpetional taste of Italian coffee to the U.S.. So, ultimately brands evolve. More branding disucssion at MarketingWitz.com
October 22nd, 2009 at 1:49 pm
Big Bang is the funniest traditional multi-camera sitcom on the air right now, and really took a leap forward in quality this year. ,
November 4th, 2009 at 2:45 am
David - thank you for this very unique, well-executed article. It made remember my shock when my mom handed me a tube of instant coffee from Starbucks. I never imagined the people that charge $3.00 for a cup of cold coffee come up with something like this… Interesting take on how it may be affecting the brand.
December 18th, 2009 at 12:14 pm
Personally I think that this is a very wise marketing decision. The economy is getting worse by the day, people are having to cut back on discretionary spending and a $4 coffee no longer seems lika a good idea. Instead of accepting their own demise Starbucks have branched out and attempted to grab a chunk of a market that will be expanding very quickly over the next year.
just m2c