Instant coffee? Starbucks? It’s either brilliant marketing or a bomb

By Larry Dignan | Sep 29, 2009 |

Starbucks made its big splash into the instant coffee business Tuesday and an informal poll finds that the company may have to overcome a bit of skepticism among consumers.

An informal poll of a handful of Starbucks customers revealed a healthy bit of skepticism. “Instant coffee? C’mon,” was a common refrain.

This poll was highly unscientific, but Starbucks has to overcome the image of instant coffee, which is about the same as…mud.

Here’s what Starbucks says about its VIA Ready Brew instant coffee:

Starbucks VIA is 100 percent natural roasted Arabica coffee in an instant form that is rich and full bodied just like a fresh-brewed cup of Starbucks coffee. Starbucks VIA is made with a proprietary, U.S. patent-pending microgrind technology to preserve the coffee’s taste, quality and freshness.

The fact sheet from Starbucks says that VIA will average out to be less than a buck a cup.

CEO Howard Schultz (right) adds that the company took 20 years to create VIA and he’s willing to serve up taste tests with a healthy dose of social networking to show his brew off.

The stakes couldn’t be higher. Starbucks has moved to a value priced model after years of living off of $4 lattes. The company faces tough competition from McDonald’s, 7-Eleven, Dunkin Donuts and a host of others.

VIA may just change the game if Starbucks isn’t exaggerating. Starbucks claims you can just add cold or hot water to VIA and the coffee is brewed. Sure, you lose some of the showmanship of brewing a cup of coffee, but the instant coffee market is huge—$21 billion globally.

The big question: Can Starbucks battle its coffee rivals by convincing them to stay home with an instant brew?

 
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  •  
    1

    arcrews@...

    09/30/09 | Report as spam

    RE: Instant coffee? Starbucks? It's either brilliant marketing or a bomb

    Better than what is brewed anywhere in my building, less expensive than some and EASY!

  •  
    2

    psion@...

    09/30/09 | Report as spam

    RE: Instant coffee? Starbucks? It's either brilliant marketing or a bomb

    Instant coffee is instant coffee. Sorry, but a buck for a teaspoon full of instant will go over like a pregnant poll-vaulter.

  •  
    3

    RayG314

    09/30/09 | Report as spam

    $tarbuck'$ In$tant Coffee

    Let's see a jar of instant premium coffee costs about $7.00, and it makes about 40 cups of coffee. That comes out to under twenty cents per cup. According to the article, "Starbucks says that VIA will average out to be less than a buck a cup." It may have cost Starbucks more than just the 20 years to develop VIA, but a buck a cup certainly doesn't translate to a value pricing model. And unless the taste claims are true, I can see Starbucks instant coffee taking the VIA into history.

  •  
    4

    Jimbosbait&tackle

    09/30/09 | Report as spam

    Instant disaster

    Starbucks in house brewed coffee has already started going downhill. Most
    people have not noticed, a trick of human psychology - customers
    associate Starbucks with a pleasant coffee experience and as soon as
    they are handed their hot/cold cup of joe, they are satisfied. They want to
    like what they taste and their minds make it so.

    For some reason I started noticing the taste again. I got my cappucino and
    the coffee stated bad. I went across the street to Peets - it tasted better,
    like I expected. It didn't use to be that way.

    Now Starbucks is undermining the psychological association trick that
    keeps their customers happy by bringing out an instant coffee. Instant
    coffee is the exact opposite of what I want when I go to Starbucks (or
    maybe, now... Peets)

    Maybe Starbucks VIA will become the leading brand of instant coffee, but
    Starbucks the brand has been sold down the river and I predict:

    - Starbucks stores' success will diminish as VIA rises
    - VIA's price will decline as the Starbucks brand declines

    It's just coffee folks; make it really well or become a commodity. It's that
    easy

  •  
    5

    oicur12ok

    09/30/09 | Report as spam

    RE: Instant coffee? Starbucks? It's either brilliant marketing or a bomb

    Uh... Maybe they should try to get their regular coffee better first. But I can see yuppies buying it just to say they have Starbucks.

  •  
    6

    neilpost

    09/30/09 | Report as spam

    RE: Instant coffee? Starbucks? It's either brilliant marketing or a bomb

    You can buy some pretty decent Instant coffee in the UK from about ?2 for 100g. The UK, although full of coffee houses, does not have the same US obsession about ground coffee - America can serve some pretty dreadful filtered or Espresso based coffee, though not as bad as about 90% of the muck from instant vending machines.

    Starbucks though, are way off the mark with their pricing.

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Larry Dignan

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CNET News.com. Larry has covered the technology and financial services industry since 1995, publishing articles in WallStreetWeek.com, Inter@ctive Week, The New York Times, and Financial Planning magazine. He's a graduate of the Columbia School of Journalism and the University of Delaware.

For daily updates, follow Larry on Twitter.

Larry Dignan

Larry Dignan has nothing to disclose. He doesn't hold investments in the technology companies he covers.

Andrew Nusca

Andrew J. Nusca is an associate editor for ZDNet and SmartPlanet. As a journalist based in New York City, he has written for Popular Mechanics and Men's Vogue and his byline has appeared in New York magazine, The Huffington Post, New York Daily News, Editor & Publisher, New York Press and many others. He also writes The Editorialiste, a media criticism blog.

He is a New York University graduate and former news editor and columnist of the Washington Square News. He is a graduate of the Columbia University Graduate School of Journalism. He has been named "Howard Kurtz, Jr." by film critic John Lichman despite having no relation to him. A native of Philadelphia, he lives in New York with his fiancée and his cat, Spats.

Follow him on Twitter

Andrew Nusca

Andrew J. Nusca does not hold any investments in the technology companies he covers.
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