Shop Talk

Retailers, consumers and prices

Coffee talk with Starbucks CEO Schultz

March 3, 2009

We thought you might be interested in some comments from today’s chat with Starbucks CEO Howard Schultz. 
 
USA/Schultz told Reuters he hopes to bring out decaffeinated Via instant coffee this year.  What was his drink of choice as he visited with us in Chicago?  Colombian Via, which made its debut on Tuesday.

He admitted that “people might trade down on a size or come less often as a result of the economy.”  But he says Starbucks is a place where people also seek refuge and a break. 

The company’s new $3.95 value breakfast pairings have gotten a lot of press attention of late, but the black horse may be its $25 loyalty card.  Schultz said almost 700,000 Starbucks Gold Cards have been purchased since Thanksgiving.  The card gives members 10 percent off most items at Starbucks and other perks — like free coupons to try new products such as its Tazo tea drinks.
 
For now, Starbucks is focused on selling its breakfast pairings and Via instant coffee.  While Starbucks has seen “a lot of demand” from grocery stores who want to sell Via, it is only in Seattle and Illinois for now, and not in grocery stores (though it will be sold at Costco, Target and Barnes & Noble). 

The CEO also let us in on a little factoid about Via, which Starbucks has been tinkering with for more than 15 years.  The inventor of Via created a liquid extract in the 1990s that was the centerpiece of the blended Frappuccino, he said. Getting to instant proved to be much harder.

Schultz also hinted that Frappuccino or iced coffee drinkers could find a new flavor in stores in time for summer, but declined to elaborate.

(Photo/Reuters)

Comments

Too much coffee has created an excess of risk taking which combined with impaired judgement caused by caffeine overdose is in no small part responsible for the current economic crisis.
It is known that workers in the City of London drink coffee to excess and I have long suspected that this is the case on trading floors across the world. If coffee retailers had made weaker coffee or, better still, tea, the recession might never have happened, in my opinion.

Posted by L A Odicean | Report as abusive
 

It would be great to see the same offers in the UK and Europe. We see a great deal of coffee “consumers” trading down to instant or of course looking for discounts. Starbucks is a well respected brand outside of the US however it has always been viewed as expensive. To retain custom and possibly increase it, prices will have to come down.

 

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