It’s been a tough week here at Beg to Differ. It started with good food, find which is good, but then we broke up with Intel, mourned the loss of the Saturn brand, and today, we have to talk about another tragedy: civil war. Yes, I’m talking full on, brother-against-brother warfare. And the war-dogs are already unleashed. Today our old friend Starbucks is starting taste tests of a brand new product against… wait for it… their own product.
The “Big Bucks” thinks this is a good idea. We beg to differ…
The new Product: Starbucks VIA Ready Brew
On Wednesday morning, I was at a business meeting in a Starbucks, when the store’s chipper “coffee master” came over to offer us a sample of some frothy sweet coffee stuff. “Great.” I thought, another example of “Lethal Generosity. I must blog about this.”
But then I noticed she was wearing an orange apron, not the traditional green, and a strange new logo was there in the middle with the name of a Canadian passenger rail service on it.
That’s when she started her spiel: “Starbucks VIA is our new instant coffee. But it’s really good. come back on Friday for our taste test and you’ll see that it tastes just as good as our regular coffee…” She went on to explain that this was real Starbucks coffee processed using a super-secret process. Then she gave a very enthusiastic review of her own experience using wine-tasting language about “floral notes” “slight acidity” dark and full-bodied presentation”. But the whole time I was thinking:
Starbucks is selling INSTANT coffee?!?!
Now I admit, part of me was also thinking: “Hmm. Instant coffee, eh? Maybe this instant coffee does taste just as good. Maybe I should give this new instant coffee a try.” So congratulations Starbucks, you got me thinking about your new product, and I’ll even go try some. So as a product launch campaign, you win.
And Starbucks desperately needs a win these days. Their brand value has been deflating under competition from McDonald’s, Duncan Donuts, Tim Hortons, and a host of very smart local shops – like Ottawa’s Bridgehead (where I’m writing this post) leading to “daring” moves like the “15th Avenue” coffee-shop concept. But Instant Coffee takes the cake.
Reasons this is a bad idea for Starbucks
1) Instant coffee is the antithesis of real coffee
As I’m thinking about this new product, the term “Instant Coffee” is going through my head and I’m picturing the stale, foul-smelling crystals that are usually your last resort when you need caffeine but ran out of the real stuff. It’s like drinking home-brew wine at a party because the good stuff is gone. Or using canned Spam because you ran out of real meat. It doesn’t matter how good it is: it’s still home brew / Spam / a non-real product / a pale shadow of the real thing.
Starbucks built its brand by creating a new product category: premium coffee with an air of sophistication, taste, and care. That is, we pay extra for real coffee, really lovingly prepared by real people in a real place that is really dedicated to that product. You’ll often hear people at an office say: “No, not coffee-maker coffee. Let’s go out for a real coffee.”
2) Instant coffee devalues the Starbucks experience
The Starbucks store is not a coffee-buying place, it’s a place where real humans commune around the centerpiece of coffee. By saying “now you can make instant coffee at home and it actually is a Starbucks coffee,” you are implicitly saying that the Starbucks in-store experience is less important, easier to replicate, and worth less.
But don’t they already sell Starbucks-branded coffee-makers in store and can’t you get big bags of Starbucks-branded beans at your local Costco? Yes, and those also devalue the Starbucks brand in the same way. One or two is a stretch, too many and you break.
Again, I don’t care how good any given product may be. Starbucks brand managers should never, ever allow anyone in their organization to say anything they offer is equal to a real Starbucks experience – which is the in-store experience.
3) The name “VIA” is not terrible. But not strong enough to stand on its own.
Good points: the name is short, punchy, easy to spell and pronounce, and it looks great in big capital letters on a poster or product logo.
But two big problems: A) in English, “via” is not a noun, so it isn’t natural to say “drink a VIA”, and 2) because it appears after “Starbucks”, it will always be fighting for attention with the more familiar name – a battle VIA will inevitably lose.
4) “Ready Brew” is a dud as a category descriptor.
If you’re launching a product in a category like instant coffee that has a low perceived-value, but you’re trying to say “this is better / different / real”, do what Dove has always done. Don’t call yourself soap; call yourself a “Beauty Bar”.
It would have been smart for Starbucks to create a strong new category that has a name that implies higher value and sophistication. As in, “this isn’t Instant at all, this is (insert term here)”. Starbucks has already done this with their cup sizes. We may roll our eyes ordering a Tall, Grande, or Vente, but it works. It makes them seem like more than just a cup of Joe
“Ready Brew” fails on all counts. It sounds even cheaper than “Instant Coffee”, and doesn’t have enough character to replace that term.
5) A taste test is a no win battle for Starbucks
And finally, back to the wars. The problem with a civil war is this: it doesn’t matter who is right, and it doesn’t matter who wins, when two armies from the same place fight each other on their own territory, things get broken. Badly.
I can see two possible outcomes for the Starbucks brand of the taste tests:
- A) The new product loses: in this case, Starbucks ends up looking silly, and the new product either tanks or manages to hobble along. Worst case, it tanks like New Coke and becomes a buzz-word for corporate hubris. This may give the Starbucks brand a small lift as people rally around “classic”, but the damage will be greater than the gain.
- B) The new product wins: In this case, Starbucks has a popular new product that ends up undercutting the value of the brand with every package sold.
As I said: no win.
Thoughts for brand managers:
- Are you creating your own internal civil wars by pitting your brands against your own offerings?
- Is that new product launch strategy going to benefit the product at the expense of the corporate brand?
- Is there an opportunity for a house brand or an endorsed brand strategy to put some distance between you and your new product?
- Is someone speaking up for your customers and for the brand in your organization? If not, maybe time to get some help.
The Motley Fool describes the civil war effect brilliantly in This May Be Starbucks’ Dumbest Move Ever. They make the suggestion that Starbucks should run taste tests against competitors’ coffee. So if Starbucks Ready Brew wins, they can say “see, even our instant coffee is better than their real stuff.”
Brandchannel provides a review of several opinions, mostly negative:
Street interviews in New York caused local blog Gothamist to declare, “Starbucks Instant Coffee Instantly Hated By New York.”
BNET joins the pile-on, with some Brand Management 101 (“How to Blow a Turnaround”), asking: “[H]ow does Via stop the market share erosion to McDonald’s and Dunkin’ Donuts? How does it bring customers back to Starbucks? Why didn’t the marketing geniuses at Starbucks compare Via to competitors’ fresh brewed coffee? At least that might have made some sense.”
Dennis Van Staalduinen says
Well, here it is folks: my review of Starbucks VIA Ready Brew.
The verdict is… Not great. Not disastrously bad either, but watery and limp. It in no way approaches a cup of real, freshly brewed coffee.
Sorry Big Bucks. Not winning this one.
Philip Coulon says
I respectfully disagree that Starbucks Via is a lose-lose for the company.
Via isn’t going for the same market as regular Starbucks Coffee. It’s tapping into the more than 20 billion dollars a year spent on instant coffee. A market that the company currently plays no part in. Even a small percent of this market means new dollars for Starbucks.
As you mentioned above, consumers likely won’t consider Via an alternative to going into a Starbucks. (“No not coffee-maker coffee, let’s go out for real coffee.”) Instead the new product opens the range of experiences in which a customer can interact with the Starbucks brand.
As far as stopping into the store for the taste challenge: It (a) got people into the store, and (b) got them into a hands-on VIA experience with a knowledgeable sales rep. Something any start up brand should be aiming for!
My bet is that Starbucks largest challenge won’t be a civil-war over of their own products, but getting consumers over the ‘yuck’ factor they use to pre-judge instant coffee.
Dennis Van Staalduinen says
I agree with you that the following aren’t bad ideas for Starbucks:
1) GOOD IDEA: having an entry into the “premium” end of the instant coffee market. I think Nescafe / Taster’s Choice have been struggling to define this market in North America over the last few years, so I think Starbucks – who was untainted by the “Instant” coffee stigma thus far – has a strong business opportunity and is wise to exploit it.
2) GOOD IDEA: Use this new product as a way to get people into your stores and re-introduce Starbucks as an innovative purveyor of high-value, high-touch coffee products.
But here’s the rub:
3) BAD IDEA: branding it as a Starbucks product. This is “lose” number 1 to me. “A Starbucks” is not just a cup of coffee; it’s an experiece, a feeling, and a social marker.
4) BAD IDEA: messaging that this tastes even remotely as good as Starbucks coffee (even if it were true – which it isn’t).
I could go on at length about what I would have recommended (and I started to before I realized how long the post was already) but in brief: I think they should have a) launched this product as a new non-Starbucks house brand, with Starbucks as a silent endorser, b) given it a name that would serve as a category-defining name for super-premium instant coffee (“Ready-Brew” ain’t that), and c) run the taste tests against other instant coffees in a true Pepsi Taste Test way.
I also would play with the idea of setting up a brand label for “Starbucks Kitchens” or “Starbucks Labs” or “Inspired by Starbucks” (which is what they’re using on their new “local” coffee-houses.
Stephen Dykstra says
The last time I had a cup of instant coffee was on a camping trip, because nobody really cares about the taste of it, just that it’s coffee. Most people that are drinking instant coffee are not looking for the Starbucks “experience” and would therefore never pay the Starbucks prices.
I agree this is a bad strategy for Starbucks
Dennis Van Staalduinen says
Nicely put Stephen. I’m a (reluctant) campfire insta-swill consumer as well. I’ve tried a plastic Bodum, and I’ve tried the old pour-straight through a filter method, but after a few 2nd degree burns, I’m back to the powder. But just as powdered mashed potatoes seem delicious and convenient in the middle of Algonquin Park, I’m not about to make them at home when I have a choice.
Ron Antonette says
Just saw your link from the Adrants story.
As a brand guy, I agree with your take.
But as a in-the-neighborhood guy, I’m surprised by the positive reactions I’ve heard from neighbors and others about the product, a couple of people remarking that it’s something they could serve at home for visitors. Makes me wonder if this is consistent with their research, thus giving Starbucks hope that they have a VIA-ble product. (I waited several sentences for that pun.)
In my store, they compared Via alongside Starbucks’ bland Pike Place Blend, which was a clever move as the Via did taste smoother. I didn’t find Via to taste any better than Taster’s Choice, another instant coffee with decent coffee flavoring.
Still, it would be surprising if people did “replace your office coffee” with Via: The cost for two 8 oz. cups of instant is a few nickels more than the equivalent, freshly brewed Grande cup of drip coffee. May as well buy a fresh cup in the morning and reheat it later — it still will be better than the office pot left on the burner all morning.
Dennis Van Staalduinen says
The pun was well worth the wait. Had you used it instantly, I’d have missed the careful brewing process with its grinding (i.e. my teeth), steeping (i.e. hurtling off a cliff), and drip-dripping (i.e. water torture).
Yeah, I’m hearing a lot of positives about the product too. But I’m also hearing a lot of unprompted “what are they thinking?”
I still think they should have distanced themselves from the product – like one of those paper sleeves on a hot cup of coffee.
Liam Price says
i am always watching for any product launch on the internet as i am a gadget addict myself..’: