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More on the Howard Schultz/Starbucks Memo

By idfive \ March 12, 2007

NPR did a story this weekend on the Starbucks brouhaha. They went to Pike Market in Seattle to visit the original Starbucks, and it was downright funny because–although the original Starbucks has stayed utterly true to its original incarnation–all the NPR people found the place “soulless” and not very pleasant.

I know, it’s NPR people–soulless? C’mon! But it underscores a real issue with this Howard Schultz memo, which is a can’t-see-the-coffee-plantation-for-the-trees problem. The “original” Starbucks wasn’t all that great, but they had good coffee–so the nostalgic past imagined by the memo is bunkum. The “brand” of Starbucks has actually NEVER been about “the corner coffeehouse”–it’s about quality coffee delivered in predictable ways.

Brands are not what marketing people and CEOs think they are. When Starbucks first came up, good coffee just wasn’t an option. Props, Starbucks, for making that a standard–and that became the brand. That’s great! It doesn’t have to be about hanging around in coffeehouses to be a good brand. It can be about standards and quality. Starbucks overextended themselves with new stores, whatever; they put themselves in airports, ok; but they made a lot of money and, as far as I can tell, they still serve the same product with the same attention to detail.

So the narrow-mindedness of this memo is surprising–“it’s the chain store thing! It’s not a corner coffeehouse experience!” It misses the point entirely. Starbucks IS the McDonalds of coffee now, better or worse; imagining some high-minded goal about “experience” is not going to grow that company. Far better to focus on ongoing quality, sustainable long-term growth strategies, shareholder value, and sticking to core principles. Stop pretending to be cool. It’s too late for that. But Starbucks offers predicatable quality, and if they can maintain that (no small task) then they will succeed, and for good reason. If Howard Schultz feels bad about it, he’s crying all the way to the bank.

My favorite quote from the whole memo:
“We achieved fresh roasted bagged coffee, but at what cost?”

Um, $8.99 a pound, far as I can tell. And that ain’t bad.