Starbucks’ midlife crisis
by Knute Berger
The Starbucks at Alki Beach in Seattle. (Claire Gribbin / Creative Commons)
The Seattle Times story about Starbucks ditching its brand on Capitol Hill and hiding behind the guise of an indie coffeehouse was hard to ignore. At my neighborhood Tully’s, the piece was posted prominently and the barista was happy to highlight some of the details, especially the parts about Starbucks blatantly scouting small competitors and stealing their ideas, as a nearby coffee shop on Capitol Hill has complained, noting a copycat decor.
That’s natural. Here in Madison Park, Starbucks or Tully’s kind of people predominate; to get a different drip you have to go to Madison Valley at a place like Essential Baking Company. The hide-a-brand move seems surprising given that Starbucks has spent a lot of money on ads emphasizing their brand. They’ve been squeezed by recession, but also competition on two sides: one, the McDonalds and Dunkin’ Donuts coffee drinkers who want their caffeine cheap and without frills, and on the other by the success of urban independents.
Starbucks has been a fierce competitor and has long been the scourge of indie coffee houses. Some cities, like San Francisco, have worked to ban Starbucks from neighborhoods to keep the chain at bay. On the other hand, retailers credit Starbucks with making many of the independents possible by creating a market for coffee drinks. A Starbucks latte has been a gateway drug for many coffee drinkers.
The fact that they’re rebranding their unsuccessful outlet as “15th Avenue Coffee and Tea” and possibly a couple of other outlets in Seattle suggests they’re serious about re-jiggering their approach: to be Starbucks only when it suits. And it’s a recognition that, perhaps, they’ve become too corporate, maybe too suburban for their hometown. It’s long been a fact the most coffee aficionados don’t drink Starbucks.
The plan to test ditching the Starbucks name reminds me of the trend in the newspaper industry since 2000. As big newspaper chains have felt the loss of readers, many, including Gannett and Hearst, began launching fake alternative newsweeklies in order to try and capture younger, hipper readers. The became collectively known as “faux alt” weeklies, and copied the tabloid-classifieds-and-listings formula genuine alternative papers had pioneered. The faux alts failed to work for the most part, and haven’t saved the dailies. The people they were supposed to appeal to weren’t fooled by the fact that they simply weren’t genuine.
In Starbucks defense, it can be argued that they are simply adapting to neighborhood tastes and trying something new: what’s wrong with that? If they become less cookie-cutter and more tailored to their local street culture, so much the better. But the image of their researchers crowding into indie shops with “observation” folders to study the ways of the locals at Victrola seems the height of corporate dumb. The only thing missing, apparently, were the lab coats. It makes them seem embarrassed to be what they are, and worse, phony. What’s next for Howard Schultz: a nose ring and a body tattoo?
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