29 March 2016

Starbucks is a global coffee behemoth. One of the world’s most recognized brands, its stores can be found in hundreds of countries and importantly thousands of airports; great if you are looking for Wi Fi and comfortable chair.

CEO Howard Schultz was inspired after a trip to Italy in 1983 where he fell in love with the Italian cafe. He was determined to bring an interpretation of Italian coffee culture to the American coffee house and his journey has been spectacularly successful. Starbucks listed in 1992 at US 34 cents and the share price is currently approaching US $60. There are almost 25,000 stores worldwide and the company now has a 17 billion US in revenues.

But Starbucks is not for the purists. The coffee is unashamedly dark, oily and bitter and less than affectionately referred to as Charbucks. Their venture into Australia was an abject failure with Australians largely rejecting their coffee and syrup based beverages. (Pumpkin Spice Latte. Seriously? ) Starbucks withdrew from Australia booking over 100 million dollars in losses and sold their remaining cafes to the operators of 7-11 who hope to revive the brand locally.

That’s an ambitious project and almost as ambitious as Starbucks recently announced foray into Italy. Necessarily Starbucks don’t anticipate selling many 20 oz Peppermint Frappucinos to the Milanese. There will be a bar so the locals can stand up when they drink their espresso and a new roast more attuned to the Italian palette and a coffee price that is a fraction of what they currently charge. Other than Wi Fi though, it’s difficult to envisage what Starbucks can offer that is not already available on a hundred corners. Howard Schultz announced that Starbucks will come to Italy with “ humility “.  His deep pockets will help. Stay tuned.

10 May 2016

Starbucks produces a formulaic latte. A steaming pitcher is filled with steamed milk to an etched fill line; espresso shots are prepared directly into the customer’s serving cup and the steamed milk is poured into the cup with a ¼ inch of milk foam leaving ¼ inch of free space. The problem though, identified by Benjamin Rhodes and Siera Strumlauf in a class action suit, is the advertised volumes are less than the actual volumes and the milk foam, once dissipated, reduce the actual volumes further. The plaintiffs allege that the savings in milk costs go directly to Starbucks bottom line contributing millions in profits. No one has launched a class action suit against the actual flavour of a Starbucks coffee. Yet!


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