Once upon a time, Starbucks had nowhere to go but up.

My, how times have changed.

Chief Executive Howard Schultz in July said the upscale coffee chain would not combine menu items and sell them at a discount, a move made popular by fast-food chains like McDonald’s.

“We’re not going to go down the fast-food lane,” Schultz told investors back then — when the company’s business was hitting the skids in a housing-led slowdown.

On the heels of news that McDonald’s will finish adding McCafes to U.S. stores by the middle of the year, Shultz is now touting a plan to offer several “breakfast pairings” at “attractive price points” beginning in March.

“The question of value often gets tied to the competition. How are we competing with (quick-service restaurants)? How can a premium brand be competitive when customers are trading down on everything from houses and travel to clothing and lunches out?” said Schultz. “We will combine our breakfast strengths with a value proposition that challenges misperceptions about our every day affordability.”

As it pays the price for its expansion exuberance, Starbucks is slashing another 300 namesake cafes around the world, bringing its closures to 1,000, cutting thousands of jobs and putting its brand new Gulfstream jet on the blocks. 

In the midst of it all,  Starbucks hopes to attract Seattle’s Best Coffee franchisees.

“We recently began exploring ways we could leverage Seattle’s Best Coffee brand to work for us, starting with a food service test in more than 2,800 Subway restaurants in the US beginning this month,” Starbucks Chief Executive Howard Schultz said. “I’m pleased to share with you today (that) we are expanding our franchising program with Seattle’s Best Coffee.”

Starbucks executives even suggested that Seattle’s Best franchisees could be good tenants for stores that will been vacated in the latest round of Starbucks closures, which bring the company’s total store closures to nearly 1,000.

Starbucks bought Seattle’s Best in 2003.

There are currently 12 Seattle’s Best franchisees who operate 36 cafes — some of which are located in Las Vegas casinos. Borders bookseller and grocery chain Albertsons are among the stores that house the more than 500 Seattle’s Best licensed cafes.

Whether you cast your vote for Joe the Plumber’s candidate, John McCain, or for Barack Obama and his No. 2 Joe Biden, it’s worth a free cup of joe at U.S. Starbucks stores on election day.

You don’t even need to prove that you went to the polls to collect your free 12-ounce drip coffee. Starbucks just trusts you to be a good citizen.

“We’re just relying on the honor system,” Starbucks spokeswoman Deb Trevino said.

Starbucks plans to announce the campaign with a commercial that will run — appropriately — on NBC’s election-crazy “Saturday Night Live” this weekend.

(Photo/Reuters)

Starbucks gathered its top managers this week in New Orleans for a morale-building leadership soiree and for its final act, its famous chief executive Howard Schultz yielded the stage to rock star Bono.

The U2 singer and philanthropist, who co-founded the (Red) project that develops co-branded products with companies like Apple and Gap, was on scene to help Starbucks announce its own (Red) product line launching on Nov. 27. A portion of the proceeds from Starbucks’ (Red) product sales will go to the Global Fund to invest in AIDS programs in Africa, a key coffee-growing region for Starbucks.

“This coffee will be beautiful because it’s going to chase away the ugliness of this tiny little virus, HIV,” Bono told the crowd of 10,000 store and district managers as colored spotlights swept over the crowd gathered for the event’s last session at the New Orleans Arena.

Starbucks held the conference as it grapples with its own turn of fortunes. (You have probably read about company layoffs and the 600 U.S. stores being closed this year as Starbucks’ domestic customers have cut the frequency of their pricey latte purchases to accommodate higher fuel and food costs.)

During the week, the Starbucks employees donned T-shirts that read “Onward” on the front and “Believe in the power of 10,000″ on the back, and participated in community service projects around the Big Easy, which is still recovering from Hurricane Katrina in 2005.

Starbucks also unveiled a variety of goals it plans to hit by 2015.

Among other things, it plans to contribute more than 1 million community service hours per year in communities where it does business, to increase its proportion of ethically sourced coffee purchases from 65 percent to 100 percent, to increase recycling and to “significantly” reduce water use.

(Photos and additional reporting by Kathy Finn)

Need a sweet treat after this week’s stock market stress?

A Salted Caramel Hot Chocolate, one three new “Signature” hot chocolate drinks introduced by Starbucks, could fit the bill. A tall, 12-ounce drink with whip cream packs a whopping 460 calories (with nonfat milk) — think of it as a doughnut in a cup.

This week, Starbucks also introduced two hot Piadini sandwiches. One is veggie with portobello mushroom, spinach, feta, ricotta and egg. The carnivore version is made with mild cheddar, sausage and egg. 

The company, which has been tweaking its menu in a bid to turnaround a U.S. traffic slowdown, rolled out oatmeal and other relatively healthy breakfast items in early September. (That oatmeal tastes sweet!) Executives recently said that oatmeal was the chain’s single most popular food product launch to date.

Starbucks earlier this year reversed plans to remove hot sandwiches from restaurants and reformulated them to be less smelly (Chief Executive Howard Schultz said they interfered with the aroma of coffee). It has since reiterated plans to eventually have ovens in up to 95 percent of company-owned U.S. stores.

On Nov. 4, the Seattle-based coffee chain will roll out its Thanksgiving Blend created by Anthony Carroll, Starbucks’ green coffee quality manager, and Tom Douglas, who was Bon Appetit’s 2008 restaurateur of the year.

Starbucks says the new brew is designed to pair with turkey and pumpkin pie.

(Photos/Reuters)

Christmas may be starting early for many retailers, but that isn’t the case at Starbucks.

While department stores like Macy’s are already in full holiday mode — hoping to get a jump on what is expected to be a dismal holiday season — the Seattle coffee shop chain is waiting until after Halloween and after Thanksgiving to serve up its holiday cheer.

Dorothy Kim, executive vice president of global strategy at Starbucks, said company executives had numerous discussions about when to roll out its holiday products, particularly since the economy is weak and this year’s holiday season has fewer shopping days than usual.

“We thought, ‘Let’s be courageous, let’s launch holiday after Thanksgiving’,” Kim said. “We have four weeks and we’re going to focus our efforts on that.”

The holiday season has traditionally been a very busy time for Starbucks, but Kim said succumbing to temptation and pushing holiday products too soon could have consequences: “You kind of get into this holiday fatigue.”

(Graphic: Starbucks)

Despite the wide range of organic and other “green” coffee on the market, 67 percent of coffee drinkers who frequent coffee shops admit to discarding used paper cups into a regular trash can rather than a recycling bin, according to a new survey of 1007 Internet users conducted by Kelton Research and commissioned by Tata Group’s Good Earth Coffee.
That means about 28 billion cups (100 million pounds of paper) end up in U.S. landfills every year.

The study also showed that 42 percent of Americans believe it takes less time for a paper coffee cup to decompose (20 years) than a newspaper (2 weeks). Not to mention the fact that many paper coffee cups can’t be recycled or composted because of the materials with which they are coated.

More than 30 percent of survey respondents said they were willing to pay extra for organic coffee or coffee that came in an eco-friendly container.

Meanwhile, the weak U.S. economy appears to be making a dent when it comes to improving the environment. That’s because the biggest consumer trend in coffee is brewing your own at home — maybe saving some green will also help save the planet.

(Photo: Reuters) 

McDonald’s, fancy coffee’s new kid on the block, appears to be stealing a page from the U.S. Presidential campaigns with an advertising blitz targeting the alleged coffee snobbery promoted by its upscale rival from Seattle.

McDonald’s restaurants in western Washington State — Starbucks’ home turf — have taken to the Internet with Unsobbycoffee.com, a site that provides a menu of McDonald’s new McCafe coffee drinks as well as tips for how to intervene when someone you love is addicted to “snobby iced espresso.”

And the pitches don’t end there. McDonald’s is planning a comprehensive media blitz — think radio, buses and billboards — for McCafe, which will be rolled out to the majority of its 14,000 U.S. restaurants by the middle of next year.

This ad is running with the McCafe launch in San Diego County. As the roll-out continues, there is certainly a similar promotion coming to a TV near you.

Stay tuned.

(Photo and Video: McDonald’s)

California, Florida and Texas — the states with the biggest populations and the most Starbucks outlets — are losing the most stores as the coffee chain slashes more than 600 stores in a bid to boost slumping U.S. results.

While big states are losing the most, few markets — even Starbucks’ hometown of Seattle — are immune.

The axe is coming down everywhere, from Manhattan’s cityscape and California’s beaches to the downtrodden Motor City and burghs in the U.S. heartland, according to a store closure list released by Starbucks.

Here’s a state-by-state list of closures:

Alabama 12
Arkansas 8
Arizona 1
California 88
Colorado 9
Connecticut 5
Washington, D.C. 1
Delaware 1
Florida 59
Georgia 13
Hawaii 5
Iowa 7
Idaho 2
Illinois 25
Indiana 23
Kansas 3
Kentucky 6
Louisiana 13
Massachusetts 7
Maryland 12
Maine 2
Michigan 18
Minnesota 27
Missouri 17
Mississippi 7
North Carolina 10
North Dakota 4
Nebraska 7
New Hampshire 1
New Jersey 5
New Mexico 4
Nevada 18
New York 39
Ohio 9
Oklahoma 15
Oregon 6
Pennsylvania 21
South Carolina 1
Tennessee 13
Texas 57
Utah 4
Virginia 5
Washington 19
Wisconsin 6
West Virginia 1

Are you losing your favorite Starbucks? And if so, where will you go to get your fix? 

(Photo: Reuters)

Starbucks stores around the United States are quietly preparing to roll out a new line of smoothies, called Vivanno, next week.

Some stores have even started a countdown for customers. In at least four coffee shops in Los Angeles and Chicago on Friday, chalkboards announced that Vivanno Nourishing Blends smoothies would be available in just four days.

Starbucks officials wouldn’t say anything more about the smoothies, but the in-store signs pretty much said it all, including that the drinks would come in orange-mango-banana and banana-chocolate flavors.

Could Vivanno be the breath of fresh air Starbucks needs to turn itself around? In 10 years, will “Vivanno” be as iconic a word as “Frappuccino?”

You’ve got four days to mull that over before you can taste them for yourself.

First it was too bitter, now it’s too mild.

Will Starbucks ever get it just right with the coffee testers at Consumer Reports?

In March 2007, the magazine blasted Starbucks’ drip java for being too burnt and bitter, and said fast-food vendor McDonald’s had a superior brew.

In April this year, Starbucks rolled out Pike Place Roast, its new everyday brew, saying it had a “smooth, welcoming taste.”

In its latest missive, Consumer Reports  took a decidedly more tepid stance on Starbucks’ new joe. 

The magazine’s testers found Pike Place to be “a smooth cup of coffee with some bitterness, but not particularly complex.” Because the flavor is so mild, the tasters said,  adding cream, milk or sweeteners might overwhelm the coffee.

Do you agree with the Consumer Reports’ testers?

(Photo: Reuters)