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.

More reading:

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.”