Starbucks Chairman Howard Schultz sees a threat to its brand.

[chelya]

http://video.msn.com/v/us/v.htm?g...a3&f=06/64&fg=copy
Good morning, Starbucks!

[gtrman]

sounds a bit (almost exactly) like the mess the record companies are in now....with the lack of caring about the customer on the corporate level. the difference is schultz has seen and admitted all this publicly...possibly before its too late....whereas the record execs are still in denial.

[HB]

The reporter noted that Starbucks' stock price did not drop as a reaction to the leak "because most of what Schultz wrote was already obvious." Starbucks has followed the McDonald's growth model, with all the same attention to process, image, marketing, and predictability. *shrug*

PS: CG's Starbucks' Chairman admits to brand's failings on "the experience" discusses the memo at length.

[Wushoes]

omg did you see those soap bubbles in that video

HIDEOUS....that is the real reason why starbucks is going down

[keno]

Here is a link to a Washington Post article about how Starbucks has lost its soul:

http://www.washingtonpost.com/wp-...2007030301100.html

The article mentions a few problems with Starbucks that are driving people who are passionate about coffee to other cafes:

(1) Flavor locked packaging that hides the aroma of coffee in the store.
(2) The romance and theater of making espresso (since Starbucks uses all super-auto machines)
(3) Paper cups
(4) A unique atmosphere (all Starbucks are virtually indistinguishable)

It's about time Starbucks recognized that it's all about experience - you can't charge people (at least people who know anything about coffee) a premium and give them a McDonald's experience. Duh!

Cheers,
Ken

[Psyd]

sounds a bit (almost exactly) like the mess the record companies are in now....with the lack of caring about the customer on the corporate level.

...and then went out and bought a label-ready Beatle to make things better. yeha, sure. Starbucks is doomed to be the Mickey-dees of coffee, and the 'mom & pops' that Chuck refers to had better be ready to take the slack, or they, too, will fall under the rolling wheel of mediocrity.
Corporate America has opted to trade profit for soul in almost everything that is produced, with results like tainted vegetables, tainted petfood, and soggy espresso. It isn't going to be getting better any time soon, either, and I'm kinda surprised that there is so much fuss being made about Starbucks following the model of damned near every major corporation on the face of North America, i.e., suck all the profit out of a product, replacing anything with a cheaper anything, until you have a product of almost no substance that costs nearly nothing to manufacture (since most of the labor is being supplied by small, third world children, including american teens) and stick the customer for every dime you can pull out of him.
America is doomed, and Americans are pretty much buying it as fast as we can. Anyone that shops at Walmart and such is falling into the trap of having steak every night while failing to realize that they are working at a dairy farm. Shoot, terrorists are just folks who don't like what we're doing but lack the patience to wait for us to degenerate into the third world that we exploit.
Yeah, there are probably exceptions to this that post here, but unfortunately they're in such a minority that it won't make a noticeable difference in the decline of this 'empire'.

[another_jim]

...
Corporate America has opted to trade profit for soul in almost everything that is produced, with results like tainted vegetables, tainted petfood, and soggy espresso ...

That's pretty strong for someone whose great granddad was probably digging ditches and who would have welcomed real calories from whatever source, however fake.

The simple fact is that these products are dirt cheap when measured against the median income, and sort of look and taste like approximations of the real thing. We can't all be experts on everything. We can either be yuppies, pretending to be experts on everything, and buying the expensive fakes from Bloomingdales, rather than the cheap ones from Walmart, or we can use the money we save there, to pay for the real stuff in the matters we care about.

Beats digging ditches any day. But perhaps your great granddad was part of the 1% for whom the ditches were being dug?

[HB]

The article mentions a few problems with Starbucks that are driving people who are passionate about coffee to other cafes...

I don't worry for Starbuck's future. My report on It's a Grind is a template for the majority of the cafes in our area, and yet I've never heard an outcry for better coffee except from "espresso nuts." It doesn't bother me that the majority are happy with what I judge subpar, it's that they're paying premium prices and don't know they could have something much better.

I've said it before: Advancements in super-automatics are the public's only hope.

[PheasantCreek]

Dan,

Should I trade in the La Marzocco FB-70 Hybrid? As for the Fetco Brewer we did trade that in for a water tower. French Pressing is a lot easier with a handy water tower!

As for SB, I think Howard is trying the head the execs off at the pass from becoming McD's. The leases they are signing now are including clauses on food now. I don't think Howie wanted to turn the place into a sandwich shop.

[cannonfodder]

I spent some time talking and emailing the owner of a new and growing cafe in Pittsburgh discussing the business. During the course of discussion I enquired about their lunch menu and lack of a breakfast and dinner selection especially considering how good their offerings are. Her response, "We thought about expanding the hours to include a limited offering for dinner. However our business focus is a Cafe, not a restaurant. We did not want to lose our focus and business direction."

I think those are wise words. Too many businesses try to be too many things and lose focus on the business objective. Shortcuts are taken and product quality drops in the name of diversification and bottom line. Starbucks is a prime example. Once upon a time they were one of the best (or should I say only) cafe's in America and largely responsible for bringing specialty coffee to the masses. Over time, their focus had wandered and the quality degraded as evident by the dismissal of 'barista training' and acceptance of the super auto espresso machine.

Now they are turning into a fast food restaurant. So the question becomes, is McDonald's trying to take away Starbucks market share with the specialty coffee and McCafe business, or is Starbucks trying to take away McDonald's market share by offering fast food?

Working in the 'McDonald's system' I have seen lots of ideas come and go, some good, many bad. However I must say that having tried some espresso based drinks from a super auto equipped pilot store, the McDonald's espresso offerings are no worse than those offered by Starbucks. Should Schultz be worried, heck yes! McD's is an 800 pound gorilla with the customer base, distribution network and deep pockets to slug it out with the green mermaid, and turn her into a pressed and processed fish patty.

Geoff, I will give you $100 for that LM, and a case of quarter meat.

[PheasantCreek]

Hundred bucks! Whoo-hoooo I'm rich!

SB was on top at one time but look what they were competing against: Coffee vending machines that dropped the cup upside down and dumped brown water and fake milk for a quarter. I think it is more the case that they were there gaining mindshare first and with all competition folks strive for better and better quality. Mom and Pops that are dedicated to making a better brew and are educated in coffee will always beat out a large chain of employees that see it as a job and not a career. Turnover at SB was too high to pay for training so they simplified everything in a Mickey-D way: Pre-ground/pre-measured coffee for brew and super-auto's to pull shots. That is the price to pay for being large and being a slave to Wall Street.

[Rainman]

I can't imagine it'll suffer too much market share- I have to admit that I stop by every once in a while (honestly, not more than that!) for a latte or some sort after a long bike ride or run... Anyone who just watches what people order will quickly realize that the customers are after more than the coffee- there's typically too much sugar, caramel, chocolate, etc... in those drinks to drown out any flavor potential the coffee may have had. I think by now, it's a well-documented fact that many American's suffer from a sort of food addiction and Starbucks, like McDonald's, is just taking advantage of that. Good thing is, at least in my town, this doesn't seem to completely stem the growth of some good cafe's (although we could always use more). We're not in Italy, where the daily routine is to drink this stuff on the go w/o all of the extras (because it's not burnt of bitter), this is the good ol' U.S of A... where SIZE matters!

[Psyd]

Beats digging ditches any day. But perhaps your great granddad was part of the 1% for whom the ditches were being dug?

Not a chance, neither of my great granddad's were here for the ditch digging, they were butchering meat in Germany, and farming France. Those ditch digger days might be on their way back here, simply because greed has overshadowed common sense.
Profit, like energy, cannot be created or destroyed. It has to come from somewhere.

[bishopthirteen]

My wife got a $10 gift certificate from BS as a gift. We walked to the closest one, stood in line studying the menu and watching the drinks produced, by the the time we got to the counter neither one of us wanted anything, so we left. It just all looked so nasty.

I hate to even re-gift it, the receiver might associate my espresso fetish with that awful place.

Contrarily I tried a cup of the new McCoffee on a roadtrip recently and was pleasantly surprised. The master has learned from the student.

[hgs]

there's a sbux across from my office. probably one of the busiest for sbux in the country - there are constantly lines that last >5min all day long - especially in the AM.

in the same building lobby, only about 50 yards away, is an illy kiosk. i had always noted how sbux had the lines, and illy was always empty, but illy had better espresso (i know - still not great). i chalked it up to sbux branding....

then...

this morning i was too busy to make my own shot... so i headed toward illy for a double cap... and WHOA ... what a line... and WHOA again... sbux WAS COMPLETELY EMPTY!. i even ran into a friend leaving illy that remarked that she had just switched to illy from sbux within the last 2mos.

i am still in shock. something is brewing...


greg

PS - for those of you in NYC, it's the illy/sbux in the sony building at 55/mad

[another_jim]

...
in the same building lobby, only about 50 yards away, is an illy kiosk. i had always noted how sbux had the lines, and illy was always empty, but illy had better espresso (i know - still not great). i chalked it up to sbux branding....

this morning i was too busy to make my own shot... so i headed toward illy for a double cap... and WHOA ... what a line... and WHOA again... sbux WAS COMPLETELY EMPTY!.

Illy is pretty good at the branding game too. A few months ago there was a long, entirely gushing article about them in the NYT whose gist was that you cannot know anything about real espresso until you drink Illy. It's just the sort of pitch that would get a few courageous New Yorkers to get the ball rolling by taking the socially suicidal step of passing up a place with a long line to go to a competitor with no line.

[LeoZ]

there's a sbux across from my office. probably one of the busiest for sbux in the country - there are constantly lines that last >5min all day long - especially in the AM.

greg

PS - for those of you in NYC, it's the illy/sbux in the sony building at 55/mad

you must not venture down to 42 street much. 3 within 3 blocks, and they all have lines out the door, all day long.
its pathetic. ive never seen people walk out of there, sipping a coffee, and smiling. its a means of caffeine infusion and the yuppie place to be seen. those that get off the subway go to dunkin donuts. those that ride Metro north, starbucks for them. there are rules to follow here! (lol)

[LeoZ]

...and then went out and bought a label-ready Beatle to make things better. yeha, sure. Starbucks is doomed to be the Mickey-dees of coffee, and the 'mom & pops' that Chuck refers to had better be ready to take the slack, or they, too, will fall under the rolling wheel of mediocrity.
Corporate America has opted to trade profit for soul in almost everything that is produced, with results like tainted vegetables, tainted petfood, and soggy espresso. It isn't going to be getting better any time soon, either, and I'm kinda surprised that there is so much fuss being made about Starbucks following the model of damned near every major corporation on the face of North America, i.e., suck all the profit out of a product, replacing anything with a cheaper anything, until you have a product of almost no substance that costs nearly nothing to manufacture (since most of the labor is being supplied by small, third world children, including american teens) and stick the customer for every dime you can pull out of him.
America is doomed, and Americans are pretty much buying it as fast as we can. Anyone that shops at Walmart and such is falling into the trap of having steak every night while failing to realize that they are working at a dairy farm. Shoot, terrorists are just folks who don't like what we're doing but lack the patience to wait for us to degenerate into the third world that we exploit.
Yeah, there are probably exceptions to this that post here, but unfortunately they're in such a minority that it won't make a noticeable difference in the decline of this 'empire'.

while i agree the mass economics of america could lead to its downfall, its also what got us to be a super power. im sure your ancestors homeland would welcome you with open arms, as there are plenty of farms to still be plowed east of here.

promoting terrorism and linking it to walmart... i wont even touch that.

[naked_barista]

promoting terrorism and linking it to walmart... i wont even touch that.

Can you elaborate on exactly how you think Psyd's post was promoting terrorism? I'm not being combative, just curious.

Larry

[LeoZ]

Can you elaborate on exactly how you think Psyd's post was promoting terrorism? I'm not being combative, just curious.

Larry

not promoting the act, but promoting the idea.

i interpreted it as terrorists are smart in their thinking of, why wait and let the country go to hell, ill kill em before it happens..