Get the taste without the place.
I’ve always been a huge Starbucks fan. Well, more like a Starbucks junkie.
As I write this, I’m sipping a mug o’ Kirkland (Costco) coffee, roasted by Starbucks. Here at Ames Scullin O’Haire, our specifications demand a high test 12-scoop measure with the potency to make a corpse dance a jig. This potent and delicious brew is a big reason why we’re so productive.
Starbucks stores have great products served in wonderful communities. Starbucks is the proverbial ‘third place’ –not home, or the office but an inviting communal environment where people feel comfortable and want to spend time.
I have felt so strongly about the Starbucks brand that I’ve owned some of its stock for many years. But I recently sold my stake in the company.
I think they’ve lost their way with the introduction of Via, Starbucks instant coffee available in stores and Starbucks locations everywhere.
The corporate line for why Via is a great idea is that now people can enjoy the great taste of Starbucks anywhere, so it will make them want to go visit Starbucks locations more often to get that great ‘third place’ experience. To which I say, “Huh?”
If I can get my drug anywhere, why do I need my pusher?
Yes, Starbucks will always have its appeal as that third place, but Via really undercuts the power of the retail brand. Now you can get the basic Starbucks product at one half the price. And, you can enjoy it wherever hot water is found.
And with Starbucks Expresso sold at grocery stores, my wife and I can enjoy our $4.00 Starbucks non-fat-triple-shot-no-foam latte at home, for a small fraction of the price. (Here’s the secret: heat the milk, brew the expresso on the 1-4 cup setting– experiment until you find your perfect blend/balance).
So, thanks to Starbucks making it easy for me to enjoy delicious Starbucks products just about anyplace, I don’t have to go to Starbucks so often. This is their retail business plan?
I love Starbucks and its products, but not enough to be an investor anymore. By making their products easy to enjoy anyplace, they are losing their grip on being the third place. And that’s ultimately going to cost them.
Agreed. Have you read Schultz’s book? This seems to go against what they based their brand on. Still, the Starbucks story is fascinating.
Have not read the book, but do believe the brand is lost. It needs to drink some strong coffee and wake up.
Have you seen their earnings in the last year? Believe Starbucks has a lot of people fooled and perhaps have a trick or two up their creative sleeves that have proven pretty successful, particularly in Starbucks VIA. They’ve had a heck of a fiscal year from what I’ve followed. If anything they’ve got an even stronger hold on their brand.
Well, it would not be the first time I sold a stock as it was getting stronger. In my gut, though, I feel it was time to go. As always, I wish the company the best and will continue supporting my habit. Thanks for the financial update, Kelly.