Products |
Starbucks
By
Published: Jan 01, 2008
Category:
Food and Wine
Howard Schultz knows a thing or two about creativity. Historically, he invented the idea of mass-market coffee houses. As CEO, he was the original architect of Starbucks’ glory. But Starbucks has hit the wall: limp earnings, weakening stock price, declining quality. So early in January, after a few years languishing as its Chairman — and writing memos that famously decried the “watering down of the Starbucks experience” — Schultz jumped off the bench, booted his CEO, and anointed himself CEO as well.
A returning CEO gets a big buildup, and Schultz is no exception. He promised to bring “creativity, innovation and excitement” back to Starbucks by focusing on — you guessed it — the customer. And he’ll prune expansion, introduce new products, and more. Investors responded with a “Howard bump” that lasted as long as the foam on a cappuccino. And most analysts and smarties had the same reaction: Schultz’s ideas won’t work.
Why should you care?
Because Starbucks is not just another company that mainlined growth and ran its business with one eye on the stock price, only to saturate the market and lose its way. It’s the one public space in America that’s the natural heir to the venerable Kaffeehäuseen of Vienna and cafés of Paris. People came together in those European coffee houses less for the liquid refreshment than for the intellectual jolt; the café was where ideas were launched and discussed and sent out into the world. In a word: The cafe was the blogosphere of the 18th and 19th centuries.
Starbucks was once a place like that. You walked in and smelled the burned coffee beans — Schultz made over-roasting a corporate signature — and somehow felt that you were surrounded by bright, lively people who were about to get much livelier. That made Starbucks “the third place” it desperately wanted to be: not home, not work. You might meet someone there. You might learn something there. You might, like the characters in Friends, gain a hangout and a community. Whatever, getting coffee was the least of it.
Gourmet coffee, once a special experience, is now a commodity. McDonald’s is adding baristas. Dunkin’ Donuts wants to make your lattes. Neither is a place where most customers will go to converse about anything. So if we are not to lose the one hope of random, real-world community, we have to care about Starbucks — or think of other ways to create that vital experience.
It’s interesting that Schultz professes to love Starbucks customers but has no apparent interest in hearing from us. How’s that, Howard? You’re going to thrill us without getting our input? Do you really think focus groups, consumer research and executive offsites will tell you what you need to know? What, exactly, do you think the Starbucks website is for?
In The New York Times, Joe Nocera sent Schultz an open letter. In it, he pointed out the company’s contradictions. He criticized its expansion plans. And he bluntly told Schultz to forget about Starbucks as a “sexy growth company” and simply tend to its core business.
This is what Schultz is doing, just in ways that seem exactly wrong. And so, in the interest of stimulating the kind of conversation that was a daily occurrence in Viennese and French cafés, here are some ideas that might be useful for Starbucks — or an ambitious upstart — to consider. Feel free to weigh in with your suggestions.
Define the “distinctive Starbucks experience“
Starbucks now sells high-end food and offers music several notches better than the pop on radio, but none of that matters as much as three spirit-deadening realities. First, the cookie-cutter design: Most Starbucks stores are uniform and antiseptic. Second, the disconnect from the product: Starbucks no longer grinds beans on site, so there’s no pungent coffee smell. Third, the ambience: Whenever I go in to a Starbucks, I don’t see humans connecting, I see permanent strangers going online or chatting on their cell phones. Starbucks, once a destination, is now a Hot Spot, as chilly as an airport. Its stores need to feel warm and local again.
Those who use Starbucks as an office will hate me for this, but no matter — the Starbuck sitters look to me like upscale cousins of the sad sacks who gravitate to the reading room of the public library on cold days. I’m not saying these office-away-from-home customers have to go. But there needs to be more happening at Starbucks to make their visits a lot shorter and the stores a lot more energetic. My thought: End the corporate headlock on creativity. Localize. Let the manager of each store figure out if he/she should invite musicians to play or writers to read or…. whatever. And when the managers figure out what does and doesn’t work for them, have them share it with others. There are 15,000 Starbucks stores. Let 15,000 flowers bloom.
Create the next distinctive Starbucks experience
Starbucks cannot compete with McDonald’s and Dunkin’ Donuts on price. That gives it no choice: It must differentiate itself on quality. And it has never been easier than right now to do that — the “real food” movement championed by Michael Pollan and Nina Planck gains converts by the day. And it will gain more and more with every article about legalized animal cloning and the degradation of our food.
Starbucks sells some “fair trade” coffee, but most isn’t. Why not be the first to use only coffee that wasn’t grown by exploited workers?
Starbucks should own the “organic” category. So why is Starbucks about to stop offering organic milk in its coffee drinks?
Starbucks will soon sell PepsiCo’s Naked Juice juices and smoothies. Not a surprise; the former CEO of Pepsi is on the Starbucks board. But that probably means the end for Odwalla drinks — which somehow seemed crunchy and human-scaled — on Starbucks shelves. Deals like this hardly make a Starbucks feel soulful.
A corporation…soulful?
The crux of Schultz’s dilemma is that Starbucks was once a community play, and a community play touches the heart and the imagination. That’s as it should be — a store that brews coffee can veer, at any moment, from a caffeinated office to Match.com with froth to a poetry slam. Management, however, wants to define what community means. I understand that impulse; corporate executives thrive on order and control. But the simplest fact of American life, now and in the years ahead, is change. Some will be economic. Some will be environmental. Much of it will feel disruptive. Little of it can be accurately predicted.
So this is not a moment for PowerPoint jockeys, or corporate planners who are wedded to their vision of the future, or even CEOs who made history once and think the right answers are carved in stone. It’s a moment to experiment and probe, to stumble into the next great idea. Above all, it’s a moment for transparency, authenticity and open, two-way communication.
America needs a place where coffee may be expensive but thought and speech are free. That was once Starbucks. It may yet be again. And if not…. well, nature abhors a vacuum. Maybe it’s time for 15,000 coffeehouses that have 15,000 different names.
Your thoughts?
— Jesse Kornbluth, for HeadButler.com
To buy the Starbucks Sirena Espresso Machine from Amazon.com, click here.
To buy 100% free trade coffee from Peace Coffee, click here.
To buy “Starbucked: A Double Tall Tale of Caffeine, Commerce, and Culture” from Amazon.com, click here.
To buy “Grande Expectations: A Year in the Life of Starbucks’ Stock” from Amazon.com, click here.
To buy Howard Schultz’s book, “Pour Your Heart into It: How Starbucks Built a Company One Cup at a Time” from Amazon.com, click here.
To buy “How Starbucks Saved My Life: A Son of Privilege Learns to Live Like Everyone Else” from Amazon.com, click here.
For the Starbucks Store Locator, click here.
