Wednesday, July 02, 2008
Starbucks: We're Adding Products! Doing Great! Oh ... and Closing Stores
Yesterday, Starbucks announced that it would be closing "600 underperforming company-operated stores in the U.S. market, which includes our previously announced plans to close 100 stores," according to A Message from Howard. He started with all the wonderful things that happened since becoming CEO again, and mentioned such upcoming things as the introduction of "healthy, good-for-you beverages" starting July 15. (Healthy? Good-for-you? Is this still a coffee spot?)
I even have some sympathy for CEO Schultz. Clearly he's been torn between the business becoming enormous and wanting the atmosphere of a cafe with comfortable seats for deliberate loitering over a cup of coffee and the smell of freshly ground beans in the air. But you can't be big and neighborhood at the same time, which shows that even success doesn't mean that you'll be happy and free of conflict.
Now, if only they'd stop over-roasting their beans.
In addition, in Southern California, we will introduce a refreshing, indulgent cold iced beverage. Steeped in Italian heritage, it will be an exclusive product that our customers can only find at Starbucks.Sure, other companies will probably call it something else once they lift the concept. But then came the bad news - under performing stores would close, full- and part-time employees would lose their jobs. At least they say they'll be offering employees either a position at a nearby store (though once you're out of major cities, heaven knows what "nearby" will mean) or some severance. And given how they have benefits even for many part-time workers, I can't fault them. The chain simply expanded faster than its audience.
I even have some sympathy for CEO Schultz. Clearly he's been torn between the business becoming enormous and wanting the atmosphere of a cafe with comfortable seats for deliberate loitering over a cup of coffee and the smell of freshly ground beans in the air. But you can't be big and neighborhood at the same time, which shows that even success doesn't mean that you'll be happy and free of conflict.
Now, if only they'd stop over-roasting their beans.
Wednesday, October 17, 2007
Coke and Pepsi Battle with Beans
I was reading a Financial Times column (sorry, but you have to be a subscriber for the link to work), and read how the newest battle ground for Coke and Pepsi is coffee. The soda market is under pressure, and, presumably, so is the bottled water market, with other companies providing significant competition. So the two soda giants have moved to cold ready-to-drink (RTD) combinations of coffee and milk. Presumably, hot coffee is almost ready to drink and will be when it cools down sufficiently. Pepsi has already partnered with Starbucks, and now Coke is about to with Illy:
The Italian company’s chairman, Andrea Illy, says he is proud to be associated with Coca-Cola to offer the “Illy taste” to a new range of consumers, as well as for existing ones to experience “new consumption moments”, whatever that may mean.Indeed.
Black coffee purists should be bracing themselves for dark days ahead.
