Posts Tagged ‘Starbucks’

Posted on August 13, 2008 - by deCadmus

Coffee Notes from All Over

• The cool kids at Barismo do a deft take on a David Letterman style top-ten list with 10 Reasons Coffee Doesn’t Taste Like the Bag Descriptions.
  

  Number 10 - Juan Valdez is dead. Get over it.
  Number 9 - The marketing team ran out of ways to say, “tastes just like coffee, but better.”
  Number 8 -  Two words: cat poo.

  Okay…  none of these are actually on Barismo’s list, I’m just feelin’ punchy.

• Despite the fact that it gets a lot of the salient facts about coffee and health right on the money, I got a beef with the recent NY Times’ health article — Sorting Out Coffee’s Contradictions — for perpetuating the myth that Howie Schultz was the founder of Starbucks…
  

  When Howard D. Schultz in 1985 founded the company that would become the wildly successful Starbucks chain, no financial adviser had to tell him that coffee was America’s leading beverage and caffeine its most widely used drug. The millions of customers who flock to Starbucks to order a double espresso, latte or coffee grande attest daily to his assessment of American passions.

  To set the record straight, Schultz *left* Starbucks — the company founded in 1971 by Jerry Baldwin, Zev Siegl, and Gordon Bowker  — to start his own coffee company, Il Giornale, in 1985. Two years later Howie bought out the original Starbucks’ stakeholders with the profits from his new company and the help of a few investor friends, and bundled everything under the name of the coffee company that made its bones on Pike Place… Starbucks. So there.

• The Bill and Melinda Gates Foundation plans to help coffee farmers in Africa boost their agronomy skills and coffee processing capabilities in an big dollar effort directed by the good people of Technoserve. Which is a very cool thing to do, and all the more remarkable as it allows me to additionally note that Bill Gates — not that Bill, his *dad* Bill Gates, Sr. — was was of the original investor friends that allowed Howie Schultz to buy out Starbucks from its original founders in 1987.Small world, huh?

Posted on August 5, 2008 - by deCadmus

Starbucks Stumbles, We Eat Schadenfreude Pie

It’s enough to make even Motley Fool cheerleader Alyce Lomax choke on her coffee.

Consider –

• 600 store closings (or 12,000 job cuts)
• 1000 additional job cuts at the home office
• a first ever quarterly corporate loss, and
• diminished expectations for the rest of the fiscal year.

But wait, there’s more! Remember Starbucks’ purchase of the Clover brewing system? How they’ve made this innovative brewing system unavailable to every other coffee shop on the planet so they can have it all to themselves? Yeah… well, there’s a little problem:

“…I’m standing in line at a hilltop Starbucks in Seattle’s Queen Anne neighborhood — one of Clover’s beta sites. I do a taste test: a cup of Clover coffee versus brewed coffee. A young barista tells me they’re out of the first two specialty coffees I request and suggests instead Starbucks’ everyday blend, called Pike Place. During brewing, the barista stirs the grounds into the Clover with a clunky rubber spatula — not a metal whisk — and pours the concoction into a crummy paper cup. I smell, I sip, I inhale. I can’t tell which cup of coffee is which — and neither is anything special. Is it the beans? My palate? After a few minutes, I finally pick it out: This coffee tastes a little bit like hype.”

Thus, even while we empathize with folks who’ve been cast loose from their paychecks (sorry, really… and best of luck) witness our collective grim delight in watching the coffee giant get its comeuppance.

Let me offer two cautionary notes…

Firstly, Starbucks’ rising tide lifted with it the status and visibility of a thousand mom n’ pop coffee shop and indie coffee bars. That tide may now be rushing out to the deep blue sea. Consider this a small craft advisory: those same economic factors that gouged a hole in the good ship Starbucks may prove rocky shoals for the indie retailer, too.

Secondly, some perspective is in order. About the same time that Starbucks was reporting its first ever quarterly loss, Exxon reported quarterly profits in excess of Starbucks’ entire market capitalization. Woof.

So, enjoy your slice of Schadenfreude Pie. It’s tasty… but have too big a helping and you’ll be sorry.

Posted on July 16, 2008 - by deCadmus

Coffee Notes from All Over

• Nick Cho makes his debut this week as the Coffee Nazi — or something like that. From the glossy web pages of U.S. News’ Money & Business section, to the frenzied spaces of Boing Boing and MetaFilter, Cho’s Murky Coffee was grabbing headlines as the coffee shop that wouldn’t serve it the way the customer wanted it.
  

  “It sounds like a cheesy sitcom scene: Man goes into coffee shop. He orders his favorite drink, a triple shot of espresso over ice. Barista declines; he says the drink goes against company policy because pouring espresso over ice ruins the quality of the coffee. Man gets angry. He leaves a tip with an expletive scrawled across it.”

  It didn’t end there, of course, as the customer blogged about the experience — complete with a snapshot of the explative-laden dollar bill he left as a tip. (Yes, he hated the experience so much he left a tip. Go figure.) And that led to the colorful, open letter from Murky’s Cho.

  Oh, the calamity.

• Starbucks gets “back to basics” by… introducing smoothies? How does this get back to the core that Howard was talking about not so long ago?
  

  “One of the results has been stores that no longer have the soul of the past,” he wrote. “Some people even call our stores sterile, cookie cutter, no longer reflecting the passion our partners feel about our coffee.”

  No worries… the Jamba Juice gambit will surely make folks focus on the coffee. Meanwhile, in light of Starbucks’ malaise, how are independent shops faring? Just fine, thanks.

Posted on July 14, 2008 - by deCadmus

Science, Magic and Starbucks

So this weekend I’m catching up on a collection of blog essays — continuations and corollaries on the never-ending debate of what constitutes science and magic in the world of, er… speculative fiction¹ — when what to my wondering eyes should appear but an altogether apt metaphor for the state of Starbucks. From a post by Ted Chiang on the effects of the Industrial Revolution:

Before mass production, technology usually involved the personal touch. Every artifact was the product of an individual’s care and attention; every tool was born of a conscious act. If a device worked well, it was usually because someone had been concentrating really hard when they made it. After mass production, that was no longer the case. The personal touch vanished from many aspects of daily life.

Voila.

There remains only one remaining bit of existential inquery: is a great cappuccino the result of science, or magic? Discuss.

P.S. If you’re not familiar with Ted Chiang’s work, try his award-winning short story, The Merchant and the Alchemist’s Gate.

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Notes and Links

1. When you’re talking about the magic vs. science debate, it’s perhaps best to use the biggest possible basket you’ve got, the better in which to deposit the arguments and theories therein, and also to pack a lunch ’cause you may be at it a while. As to the debate itself, see the July 14 Bloggled entries in the sidebar. ↩

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Posted on July 8, 2008 - by deCadmus

Can Howie Get His Groove Back?

If you’re a Wall Street analyst, you might note that year over year, Starbucks’ valuation has slipped about 40%. If you’re one of several thousand Starbucks employees you may soon find a pink slip in your pay envelope, as the company moves to close 600 stores, eliminating some 12,000 jobs. If you’re an independent coffee house owner, you may be sitting there with your jaw hanging slack, just trying to wrap your head around the idea that, when Starbucks closes 600 frickin’ coffee shops, the move shrinks its overall footprint by a mere 8 points. And maybe if you’re a Starbucks customer you’re just so over that whole Starbucks thing. Sure, Starbucks was the epitome of hip for a while, but then they became, well… McDonalds:

Twenty years ago, it was love at first sip. Like every prisoner of love, I went from downing one cup a day to three or more. How, I wondered, had I gone more than 40 years without a midafternoon break or even a “for no reason” indulgence?

Today those memories are like bitter, stale grounds. These days the breaks aren’t fewer but are often enjoyed somewhere else. That early Starbucks mojo is no more. My disillusionment set in about three years ago, but the company’s ballyhooed “Starbucks experience” died even earlier, killed by a growing bureaucratic culture.

Ouch.

Maybe it *is* about the bureaucracy. There is, of course, a very real danger when you grow to the scale of Starbucks — or McDonalds — and your stores light up every other street corner, shopping mall and airport concourse. At some ill-defined point on your meteoric growth chart you may cease to become the sum of whatever got you there — whether that was a curiously strong cup of brewed coffee, a made-to-order espresso milkshake or  a Happy Meal — and instead morph into a massive real estate holding company that also brews coffee by the gallon pot.

Or maybe it’s something else. What with mortgage meltdowns and gas prices at four bucks and change, a spiraling economy has customers feeling the pinch, caught between guzzling a latte or putting another gallon of fuel in the family hauler. Call it — as financial self-help author David Bach has — the latte factor:

The Latte Factor® is based on the simple idea that all you need to do to finish rich is to look at the small things you spend your money on every day and see whether you could redirect that spending to yourself. Putting aside as little as a few dollars a day for your future rather than spending it on little purchases such as lattes, fancy coffees, bottled water, fast food, cigarettes, magazines and so on, can really make a difference between accumulating wealth and living paycheck to paycheck.

Oh sure… financial gurus have been offering like-minded advice for decades… but those were years that lacked the incentive of four dollar gasoline and upside-down mortgages, too. Maybe folks are actually heeding the collective wisdom of the financial set. Maybe they don’t have a choice.

More likely what’s got Starbucks on the rocks is a bit — or a lot — of both factors. Which isn’t to say that Howard won’t be able to right the good ship Starbucks… but I’d wager the course corrections are far from over.

And while Starbucks is thrashing, other shops –small chains and indies alike — may be able to carve out some new opportunities for themselves, provided they’re able to keep their focus on the fundamentals: making great coffee and satisfied customers, one cup at a time. 

Posted on April 14, 2008 - by deCadmus

The Coffee Scene, Pittsburgh Edition

In the wake of the Starbucks’ public makeover, and with the SCAA show rapidly approaching, there’s a bevy of coffee-centric ink (’lectronic and otherwise) flowing at the moment. Lots of publications are taking a look at their local coffee scene, trying to figure out who the players are — and discovering that the coffee shop just ain’t what it used to be. (Hoorah.)

Here’s a take on the Pittsburgh coffee scene (featuring the fine folks at Aldo Coffee, among others.)

“Our goal,” offers Rich Westerfield, genial co-owner with wife Melanie Westerfield, of Aldo Coffee on Mt. Lebanon’s Washington Road, “is to raise the level of conversation and appreciation of what coffee can be.”

You go, Rich!

Locally, upper-end coffee shops “have become a central place,” Westerfield says, for many the magical Third Place – after home and work. Priming the French press, Aldo, for example, brings in ska bands and steel drums. One church actually meets there monthly. “Coffee houses bring people together,” he says. “They’re oases of community in a city.”

Ska, steel drums and church groups. Nice.

Posted on April 14, 2008 - by deCadmus

Coffee Notes from All Over

America’s Best Boutique Coffees. Forbes offers a glimpse at some of the best indy coffee shops around.

Even though Starbucks, in its fight to retain customers, today unveiled a new brewing strategy and an inaugural blend called Pike Place Roast, most coffee snobs argue that the best java is found at small cafes where each cup is painstakingly crafted. Often tucked away in neighborhoods outside of a city’s financial district, these shops can be difficult to get to for a business traveler, but aficionados say it’s a worthwhile trip.

So where are these boutiques? Well, the article is rather sketchy in that department but if you dig enough you’ll find a link to a spiffy photo gallery of a number of the usual suspects, and some you may not be familiar with.

The SCAA gets its green on. The 20th Specialty Coffee Association of America Conference, this year in be-skywayed downtown Minneapolis, Minn, is making its 2008 conference its greenest ever. Sure, it’s easy enough to collect carbon-offset fees in the conference pricing… but the list of earth-friendly efforts with a more immediate impact is pretty impressive, and includes:

• The elimination of paper hand-outs for more than 100 lectures and labs.
• Food and beverages served with re-useable dishware and cutlery, as well as recyclable cups, whenever possible.
• Metal scraps and light bulbs recycled and 100 percent “green” cleaning products utilized.
• Food and beverages locally grown, in-season and organic, whenever possible.
• Food waste sent from the convention center to a hog farm for use as animal feed, and nonperishable, unopened food products donated to a local homeless shelter.

That’s leading by example. On paper (recycled, natch) I’m impressed, while it remains to be seen how it all works out on the convention floor. I’ll keep an eye out. And maybe I’ll see you there!

Posted on April 9, 2008 - by deCadmus

What’s In A Name?

You can send out the press releases. You can stage million dollar opening-day events and sampling programs. Still, some folks just won’t get it right…

• The modern chain is “going back to its roots” and launching a house coffee called Pike Place Blend.
• Yesterday marked the company’s coast-to-coast free tasting, but I got a taste of Pike Place today.
• Pike’s Place was blended to have a smoother, cleaner finish than Starbucks’ other blends.
• Starbuck’s new Pike’s Place roast drips out early in Gold Coast.
• On Tuesday, April 8^th Starbucks launched its newest brew, “Pikes Peak Roast…”

For the record Starbucks’ new blend is called, Pike Place Roast™.

P.S. I really don’t intend to turn this space into yet another Starbucks-watching venue, but — much like a seventy car pile-up on the freeway — it’s just hard to tear your eyes away.

Posted on April 8, 2008 - by deCadmus

Starbucks’ Extreme Makeover Continues

Continuing its excruciatingly public extreme makeover, Starbucks does a full-court press (release) on… a new coffee blend. Oh, goody.

Sure, while most every other coffee roaster in the land releases new roasts seasonally — you know, to align with new coffee crops and all that — Starbucks’ latest blend is different, apparently. Word is, it’s not… you know, burnt. More, Howie would have us believe this is a pivotal event in Starbucks’ history, even suggesting that it’s a peek into a future that isn’t steeped in an espresso + milk monoculture:

“We’ve been so focused on espresso … that we haven’t done anything to reinvent brewed coffee,” Starbucks Chief Executive Howard Schultz said in an interview.

Profoundly true. Not only has Starbucks done virtually nothing to reinvent brewed coffee — or even support it — their general disregard for drip coffee, press coffee and the like spilled over into the marketplace, where thousands upon thousands of competing independents likewise ignored the possibilities of unique origin coffees. Unless, of course, they could chuck it in a portafilter with decent results. It’s fair to say that only very recently, I’d say the last five or six years — or a time line roughly consistent with the rise of the Cup of Excellence auction program — that the indie retailers have promoted non-espresso coffee with particular enthusiasm. Coincidence? I don’t think so.

And then Howie slips in this dubious bit…

Mr. Schultz says he believes Starbucks has underplayed its expertise in selecting and roasting coffees, something its main competitors don’t specialize in.

It’s left as an exercise for the reader whether Schultz is suggesting Starbucks’ ground-game at origin is better than that of Peet’s, Green Mountain, Stumptown, CounterCulture, Intelligentsia, The Roasterie, Terroir, Thanksgiving, and a few hundred assorted smaller roasters, or whether he doesn’t view them, individually or collectively, as his competitors. Either way, it’s a low blow. And one that may well come back to haunt him.

Posted on April 1, 2008 - by deCadmus

Starbucks Achieves Critical Mass

Apparently Howard Schultz is in a buying mood. Close on the heels of Starbucks’ buyout of Coffee Equipment Company, maker of the Clover single-cup coffee brewer, the Seattle coffee giant announced its next step in coffee roasting technology and its next acquisition, also a Pacific Northwest technology venture: the Trojan Nuclear Power Plant in Ranier, Oregon.

“This baby’s hot,” says Schultz with characteristic zeal, “and it’s going to help us differentiate Starbucks from everyone else that is attempting to be in the coffee business.” Howard Schultz paces the length of the counter at the Starbucks coffee house at Seattle’s Starbucks Support Center. Clearly, he’s catching his stride.

“We’re talking zero carbon footprint, roasts coffee quicker than one of our espresso pours, and –wow!– can it spread that great coffee aroma!”

Howard pauses; he looks momentarily soulful. “We want to have the courage to do the things that support our core purpose, our reason for being. This is all about our core.”

“And besides,” adds Schultz, “who else has a nuke?”