Starbucks “Instant” Coffee
By Barry Ritholtz - October 2nd, 2009, 8:13AM
I wandered over to Starbucks after the radio show, to taste the vaunted new instant. We have had positions in SBUX over the past few months, so I wanted to try the new beverage.
It was ( as I expected) watery and thin.
To be fair, this was not a blind taste test, and my pre-existing hatred of instant probably colored my view. I am curious if other ordinary coffee drinkers liked it.
I really don’t know what this means for the stock. If the instant was really goood, it would be a big seller and bring in profits.
But if it was fantastic, it could probably drive the entire chain out of existence!
October 2nd, 2009 at 8:18 am
Don’t worry. We’re helping to rebrand them. The stores will be getting a whole new look!
October 2nd, 2009 at 8:19 am
uhh….. “whole”
October 2nd, 2009 at 8:57 am
feels more like mcdonalds every time i go there… which is why that doesnt happen very often.
unless the rebranding will disguise each store as a locally owned independent it aint gonna help
October 2nd, 2009 at 9:14 am
i was hoping for Sanka on steroids and it turned out to be quaaludes. wonder who the coffee quaffers were that authorized this downer.
October 2nd, 2009 at 9:25 am
Is instant coffee really a large enough market that it could impact SBX profits? Are they trying to create a market for instant coffee? I’ll be surprised if much comes of it.
October 2nd, 2009 at 9:27 am
I don’t care what it tastes like, there’s no way there’s a significant market for $1/serving instant coffee
October 2nd, 2009 at 9:28 am
Did it taste burnt and smell bad like their STOCK and the rest of their coffee?
October 2nd, 2009 at 9:38 am
Instant is not really instant if you still need cream and sugar. That aside, I think it’s a great product. I’m visiting Portland and we’ve avoided Starbuck’s only because of the fantastic and minimalistic Stumptown downstairs of The Ace Hotel. As with everything Starbucks I foresee the success of their instant coffee product on the basis of marketing. If I had a choice it would be Stumptown every time, but I don’t usually have that luxury, and non-Starbuck’s coffee can be earthshatteringly bad. It’s like Clint Eastwood pointing a gun in your face and asking you whether you feel lucky.
October 2nd, 2009 at 9:54 am
I’m real happy for you Starbucks, and Imm’a let you finish, but Barry just re-posted one of the best Big Picture blog posts of ALL TIME! Of ALL TIME!!
October 2nd, 2009 at 9:55 am
I live in a town that has about a dozen locally owned coffee shops, and ALL make better cups than Starbucks (be it brewed or espresso-based). Dunkin-freakin-Donuts is better too. Starbucks coffee just blows; I have no idea how they’ll keep all these stores open going forward.
October 2nd, 2009 at 10:52 am
does “Instant SBUX strike anyone else as oxymoronic?
n. pl. ox·y·mo·ra (-môr, -mr) or ox·y·mo·rons
A rhetorical figure in which incongruous or contradictory terms are combined, as in a deafening silence and a mournful optimist.
[Greek oxumron, from neuter of oxumros, pointedly foolish : oxus, sharp; see oxygen + mros, foolish, dull.]
oxy·mo·ronic (-m-rnk) adj.
oxy·mo·roni·cal·ly adv.
http://www.thefreedictionary.com/oxymoron
October 2nd, 2009 at 11:34 am
I tried Via two days ago at my local Starbucks in a free tasting. I was *very* pleasantly surprised. Barry, maybe you had the Columbian or maybe it was mad improperly – 1 packet to 8oz water. I really like the Italian. Its definitely better than Pike with a feeling on the tongue almost like a french press but not quite!
In fact, I’m drinking a cup right now (Italian and black) that I purchased yesterday.
I’ve been thinking about this:
- The price is no cheaper than purchasing a cup from your local store. This product is solely for convenience if you don’t have the time or inclination to hit your local Starbucks – like I don’t this morning.
- They exceeded my quality expectations for “instant.”
- This could be VERY damaging to them in the future. They charge $1.00 per pack / per small cup – with no chance to sell other merchandise since you are not in the store. Someone else will figure out how to do this and undercut them in price – not so difficult to do. Once that happens, they will be forced to lower prices and their margin is gone.
I think they really jumped the shark on this one. If the instant is not successful, they have lost some R&D dollars and maybe some customer good-will. However, if it is successful, it seriously undercuts their bread and butter store operations. I think this may be akin to Krispy Kreme selling in supermarkets, cannibalizing their retail operation.
October 2nd, 2009 at 11:34 am
“non-Starbuck’s coffee can be earthshatteringly bad. It’s like Clint Eastwood pointing a gun in your face and asking you whether you feel lucky.”
and therein lies the problem with american consumers the last 30 years: comforting, consistent mediocrity over The Possibly Brilliant, Possibly Bad Unknown, every time. in coffee, in food, in music, in clothes, in politicians.
alexp, that also answers your question!
October 2nd, 2009 at 12:08 pm
I drink it b/c I’m addicted, not for the taste, so that makes be a poor example. But, it would seem instant coffee runs contrary to SBUX whole point of existence. It’s like the pigs walking on two legs.
Thanks for the link to the re-post; opened my eyes (n/p/i).
October 2nd, 2009 at 6:32 pm
I suspect this product is intended more for the Asian market than for domestic consumption. I spent last summer in SE Asia and had more cups of instant coffee than I would care to recall. Very few places had the capacity to brew cups of coffee, with the exception of Vietnam.
I’d be interested to see how much of a marketing push they give this overseas.
October 2nd, 2009 at 9:58 pm
I love Viet Namese coffee, with condensed milk!
October 3rd, 2009 at 1:43 am
I live in Seattle and first encountered Via about 6 months ago and I still haven’t figured out why I would buy this product. If I have access to hot water I also have access to electricity and would far rather grind some beans and make better cup of drip coffee in my one-cup Melitta filter in the same amount of time for one fourth the price. I went backpacking recently and even there I brought ground coffee and made a great cup of drip far superior to the thin “Via” instant in the same amount of time. It’s not 1980. I suppose some will opt for the convenience of just pouring it into hot water b/c they have no clue how easy it is to make better coffee for far less money in the same amount of time.