This story regarding Starbucks’ launch of an instant coffee brand (Via) is rather concerning. In particular, this quote regarding a ‘taste challenge’:

“The initial commercials will promote a “taste challenge” that will take place at Starbucks stores from this Friday to Monday. Customers who participate will be able to try a cup of brewed coffee and a cup of Via, to see if they can tell them apart.

“We’re convinced a majority of people won’t be able to tell the difference,” said Mr. Schultz, who explained that he has secretly been serving Via to people at his office and home for months and that they haven’t realized they were drinking instant coffee.” 

Surely, if customers cannot readily taste any difference between the instant coffee and the considerably more expensive version brewed in-store, then Starbucks has broken their own business model. 

Will the purported ambience of their stores (i.e. the ‘café experience’) and the wider range of coffee flavour choices be sufficient to overcome any losses from customer flight to instant? 

Also, doesn’t pushing this product out into the retail space allow other competitors (i.e. diners etc) scope to advertise “Starbucks coffee in house”. 

Unless Starbucks is looking to abandon its retail cafe network down the track and take on Nestlé etc in the grocery domain, this looks a very dangerous move.

Posted in International retailing, Retailing, Strategic management