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'Latte price war'?


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"First shots fired in latte price war

Last updated Jul 27 2005 01:08 PM PDT

CBC News

Small independent cafes across Vancouver are taking on Starbucks, offering $2 lattes in an effort to win over customers from the industry giant.

Mike and Theresa Triggiano who helped start the price war, say business has been brisk at their Yaletown cafe thanks to their sandwich board on the sidewalk offering the cheaper coffees.

"Mike just came up with the idea, and thought let's start promoting ourselves," says Theresa Triggiano. "I think people are getting tired of paying too much for their lattes "

A few blocks away at the Cafe d'Azur ....."

Please see article for remaing text.

Edited for clarity and to conform to site policy as requested by Mod

Edited by Sam Salmon (log)
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Funniest line; "Three doors away at Starbucks, the same size latte costs about a dollar more. But Hanna Letkowski, who speaks for Starbucks in B.C says they welcome the competition.

"I think there's room for so many coffee houses in the market. I just think there's room for a lot of different competitors "

Really? Starbucks doesn't mind their competition driving down prices in the short term, eventually leading to less well finaced outfits driving themselves out of business? As an added benefit to the big green machine, independents will tend to compromise the quality of the product in an effort to maintain margins by reducing costs/raw materials used.

Trust me, Starbucks would absolutely love the basis for competition to be price rather than quality.

Sometimes I wonder how good a food city Vancouver really is.

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You're right on how Starbucks rather fight on price than quality. Since they're not actually selling coffee, but rather a lifestlye it would be easy to dismiss a lower priced competitor. But let's not let actual retail price be a factor in the definition of ones coffee quality. Starbucks pays fractions less for their coffee and in this particular case charges more yet the perception is their higher priced coffee is also higher in quality.

Vancouver is a good food city for the outgoing eater but probably the worst for a restaurateur. I can't think of another place where virtually everything is against you. From wages, taxes, bylaws, to even customers who makes snoozefest places like Cactus Club and Earls popular. To be a pioneer here is to sell your business for 25% of it's worth.

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In the same article it was mentioned that Starbuck's global sales for the last nine months were $4.7 BILLION - so I don't think they are to worried about Mom and Pop stores undercutting them by $1

''Wine is a beverage to enjoy with your meal, with good conversation, if it's too expensive all you talk about is the wine.'' Bill Bowers - The Captain's Tavern, Miami

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Funniest line; "Three doors away at Starbucks, the same size latte costs about a dollar more. But Hanna Letkowski, who speaks for Starbucks in B.C says they welcome the competition.

"I think there's room for so many coffee houses in the market. I just think there's room for a lot of different competitors "

Really? Starbucks doesn't mind their competition driving down prices in the short term, eventually leading to less well finaced outfits driving themselves out of business? As an added benefit to the big green machine, independents will tend to compromise the quality of the product in an effort to maintain margins by reducing costs/raw materials used.

Trust me, Starbucks would absolutely love the basis for competition to be price rather than quality.

Sometimes I wonder how good a food city Vancouver really is.

Agree complertely!

Cheers,

Anne

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Steamed milk and coffee. I like it.

But my price threshold limits what I believe is value.

I don't want a latte that's cheap and lousy, and I don't want a $5 latte, no matter how good.

Bradley Cooper

You should be reading my blog!

WINE & VINE BC

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cheap coffee is nothing new, imperial nations have been peddling it for centuries at the mercy of poor farmers.

there is a coffee crisis, didn't ya know?

on the wide scale its about the green coffee trade (second largest commodity next to oil) and coffee-farming families struggle to survive. at the heart of the issue is too much cheap coffee on the market, which pushes the price of higher quality coffee down, and sinks hard working families into poverty.

devaluing coffee doesn't help, it hurts.

consumers need to seek quality coffee and refuse cheap coffee so that counties like vietnam and brasil who produce a glut of crap coffee for cheap realise its not worth it. they're growing it because we're buying it.

this is the simplist way i can explain it.

you may think it has nothing to do with you saving a buck on your latte,

but i really think it does.

i know nothing of the store mentioned, I'm just saying don't buy for price buy for quality.

"life is too short for bad coffee".

Edited by hopkin (log)

Alistair Durie

Elysian Coffee

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cheap coffee is nothing new, imperial nations have been peddling it for centuries at the mercy of poor farmers.

there is a coffee crisis, didn't ya know?

on the wide scale its about the green coffee trade (second largest commodity next to oil) and coffee-farming families struggle to survive.  at the heart of the issue is too much cheap coffee on the market, which pushes the price of higher quality coffee down, and sinks hard working families into poverty.

devaluing coffee doesn't help, it hurts.

consumers need to seek quality coffee and refuse cheap coffee so that counties like vietnam and brasil who produce a glut of crap coffee for cheap realise its not worth it.  they're growing it because we're buying it.

this is the simplist way i can explain it.

you may think it has nothing to do with you saving a buck on your latte,

but i really think it does.

i know nothing of the store mentioned, I'm just saying don't buy for price buy for quality.

"life is too short for bad coffee".

I just googled fair trade coffee in the hope of finding a list of Vancouver Coffee houses that sell the product. There is a site www.fairtradecoffee.ca - but it doesn't exist. Anyone know?? I know that Salt Spring Island coffee is all fair trade and that many coffee shops (Pane from Heaven for sure) ensure that they serve only fair trade. Does anyone know of a site or have a listing of the places that sell only fair trade. Also, if the price of coffee is cheap - it could mean that the establishment is subsidizing the cost in the hope that they will draw people in and they will then buy other products = bait. (coffee may still be fair trade).

Edited by Vancitygirl (log)

Gastronomista

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cheap coffee is nothing new, imperial nations have been peddling it for centuries at the mercy of poor farmers.

there is a coffee crisis, didn't ya know?

on the wide scale its about the green coffee trade (second largest commodity next to oil) and coffee-farming families struggle to survive.  at the heart of the issue is too much cheap coffee on the market, which pushes the price of higher quality coffee down, and sinks hard working families into poverty.

devaluing coffee doesn't help, it hurts.

consumers need to seek quality coffee and refuse cheap coffee so that counties like vietnam and brasil who produce a glut of crap coffee for cheap realise its not worth it.  they're growing it because we're buying it.

this is the simplist way i can explain it.

you may think it has nothing to do with you saving a buck on your latte,

but i really think it does.

i know nothing of the store mentioned, I'm just saying don't buy for price buy for quality.

"life is too short for bad coffee".

By the same token, hopkin, you can spend a lots of money on your coffee at Starbucks or similar, and not be doing anything good at all for the coffee farmer, but rather paying for stylish décor and lining shareholders' pockets...

Agenda-free since 1966.

Foodblog: Power, Convection and Lies

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By the same token, hopkin, you can spend a lots of money on your coffee at Starbucks or similar, and not be doing anything good at all for the coffee farmer, but rather paying for stylish décor and lining shareholders' pockets...

Shit, I was off to West for dinner, but by this rationale I'm moraly obligated to only dine at some east side co-operative work experience fair trade organic bistro. Damn my moral conscience, damn it to hell.

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By the same token, hopkin, you can spend a lots of money on your coffee at Starbucks or similar, and not be doing anything good at all for the coffee farmer, but rather paying for stylish décor and lining shareholders' pockets...

Shit, I was off to West for dinner, but by this rationale I'm moraly obligated to only dine at some east side co-operative work experience fair trade organic bistro. Damn my moral conscience, damn it to hell.

Just order some sustainable seafood and you will be redeemed!

Gastronomista

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I just googled fair trade coffee in the hope of finding a list of Vancouver Coffee houses that sell the product.  There is a site www.fairtradecoffee.ca - but it doesn't exist.  Anyone know??  I know that Salt Spring Island coffee is all fair trade and that many coffee shops (Pane from Heaven for sure) ensure that they serve only fair trade.  Does anyone know of a site or have a listing of the places that sell only fair trade.  Also, if the price of coffee is cheap - it could mean that the establishment is subsidizing the cost in the hope that they will draw people in and they will then buy other products = bait. (coffee may still be fair trade).

Transfair is Canada's fair trade certification body. The logo ensures that the product (coffee, chocolate, even soccer balls) were produced fairly (by wage standards that is) and with environmental considerations in mind. While sort of a voluntary thing, most coffee roasters who produce a fair trade line favour registration because it builds a credible brand for an audience of fair trade buyers who, I would guess, are prioritizing source over quality and price (not to say fair trade coffees aren't good, but in my own case I'm trying to support an initiative that makes good sense...even if my fair trade colombian isn't the same taste as my Starbuck's Colombian)

Bear in mind though "Fair Trade" in terminology is not an absolute thing. Some are fair trade and organic, some are not. Some are "fairly traded" vs. "fair trade" and if they don't have the Transfair logo it's quite easy to mirepresent your product (Since Transfair requires an independant site audit and a whole gobbledygook of information before giving you rights to the logo)

Anyway, point of this is that they list Fair Trade outlets by province on their website: http://www.transfair.ca/www/en/products/

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"life is too short for bad coffee".

By the same token, "Life is too short for lattes." Lattes are a milk drink with some coffee in it. If I want to enjoy some coffee, I'll order coffee.

I'm partly kidding, of course.

I don't see a huge problem with this so-called "price war." It would be a much bigger problem if Starbucks were trying to undercut local coffee houses, not the reverse.

Baker of "impaired" cakes...
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I don't see a huge problem with this so-called "price war." It would be a much bigger problem if Starbucks were trying to undercut local coffee houses, not the reverse.

What? Why?

And granted, lattes are of the devil. Unless of course it's prior to ten AM.

Edited by Keith Talent (log)
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What? Why?

Conceivably, Starbucks could take advantage of its volume and buying power (beans/milk) to undercut local coffee houses, or even sell certain drinks as a loss leader to capture market share and kill off local coffee houses. That would truly suck for consumers by reducing our choices, unless Starbucks happened to be producing a truly superior product (they don't). Starbucks would be smart to keep pushing itself as a premium brand (they're not) and stay above this fray for as long as possible.

Eventually, though, consumers will become sophisticated enough that Starbucks will fade as a premium brand and will be perceived as the Mickey D of coffee that it is. For all I know, this might already be happening.

I'm not entirely against lattes. They do make for a good breakfast/early meal substitute. :biggrin:

Edited by sanrensho (log)
Baker of "impaired" cakes...
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By the same token, hopkin, you can spend a lots of money on your coffee at Starbucks or similar, and not be doing anything good at all for the coffee farmer, but rather paying for stylish décor and lining shareholders' pockets...

Dare I mention that Fair Trade IS an option at Starbucks, and the more people who vote with their feet, well, you know....

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By the same token, hopkin, you can spend a lots of money on your coffee at Starbucks or similar, and not be doing anything good at all for the coffee farmer, but rather paying for stylish décor and lining shareholders' pockets...

Dare I mention that Fair Trade IS an option at Starbucks, and the more people who vote with their feet, well, you know....

See, what would I know...I shop there as seldom as possible. I don't like their lattes (or their prices) and the whole "lifestyle" marketing makes me roll my eyes.

I am just so sick of the homogenization of the world, where everywhere you go there's the McDonald's and the Gap and the Starbucks and the 7-11, etc., etc., ad nauseam.

There's a plus side to it, even for me (sudden ubiquity of CIBC bank machines), but I spend my money at the indie shop whenever possible.

Edited by *Deborah* (log)

Agenda-free since 1966.

Foodblog: Power, Convection and Lies

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By the same token, "Life is too short for lattes." Lattes are a milk drink with some coffee in it. If I want to enjoy some coffee, I'll order coffee.

I'm partly kidding, of course.

no kidding, its true.

latte translates to milk, it is a milk drink with coffee.

Alistair Durie

Elysian Coffee

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By the same token, hopkin, you can spend a lots of money on your coffee at Starbucks or similar, and not be doing anything good at all for the coffee farmer, but rather paying for stylish décor and lining shareholders' pockets...

it is true, but my point was not to pay more, it was not to pay less. $2 is not a sustainable price for cafe's, just like 50 cents a green pound is not a sustainable price for coffee farmers. if everyone agrees to pay $2 it will force good quality shops out of business and the rremaining to buy cheap coffee. it is a bad idea in an industry that is known for exploiting millions of hard working farmers.

Alistair Durie

Elysian Coffee

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hopkin pulls out the fair trade file...

fair trade is an excellent program. it is especially good for large companies who buy cheap low grade coffee, thereby forcing all market prices down. it is great that consumers demand roasters pay a good price for coffee, but thats not the end of the story. you cannot simply buy fair trade coffee and believe that everything is ok. everything is not ok.

certified fair trade farmers receive a fixed rate of $1.26 per pound for the coffee they produce, regardless of quality. although $1.26 is higher than a lot of coffee traded on market, it is by no means fair. in fact fair trade of $1.26 is CHEAP, and considered by many roasters I know to be rock bottom. To roasters that are paying on average $1.50-2.00 for green, and even cup of excellence coffees for 5, 6, 8, even $20 a pound... fair trade becomes much less relevant.

George Howell of Terroir Coffee says it much better than I can: "In my view Fair Trade is one solution in a world requiring many, each working in cooperation with the other and evolving as each learns from the other. Fair Trade is limited to small farmer cooperatives (did you know that you cannot be Fair Trade if your farm is too large!?). Medium and larger farmers, many of whom have the welfare of their workers fully at heart, cannot participate and thus find themselves at the mercy of a market paying well under the cost of production for several years in a row now. They are losing their farms. So are many small and tiny farmers – who can at best sell a minute share of their production as Fair Trade because their combined supply far exceeds demand for Fair Trade, no matter how aggressively it tries to grow."

and from Counter Culture Coffee who have a strong sustainability program: "Special coffees require a tremendous amount of skilled attention to achieve greatness, and the men and women who produce these coffees deserve to be compensated well for their efforts. We are committed to paying fair prices for every coffee we source, and finding innovative ways to support and reward the production of really great coffees. We will never buy coffee for less than the cost of production, as is the practice with some other roasters. We love the coffee industry, and we are committed to supporting its stability by being responsible in our buying practices. Great coffee never comes cheaply, and we are committed to exercising and supporting fiscal sustainability throughout the chain of coffee."

what I'm saying is 'consider' fair trade when you buy coffee, but consider a lot more things. fair trade is not the end of the line and it has nothing to do with quality. there are many other coffee's that have even stronger sustainability and support for farmers in a non-certified fair trade trademarked coffee.

Lastly, I believe what is of greatest importance is that consumers of coffee spend a little more time to educate themselves about coffee issues and quality. the rewards are plenty.

Alistair Durie

Elysian Coffee

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Don't be fooled by one fair trade coffee sign as chances are that this means something to you beyond what it means to the farmer who grew those beans. It is very easy to sit back and comment on Starbuck or any of the other big coffee chains. from our high speed connected / coffee infused desks, but let's remember that we are all supporting them.

Again, not that I want to defend Starbucks, but it is true that in the days when they were small (or at least smaller), they too posted about fair trade coffee and made many attempts to treat their farmers well, put money back into coffee growing communities etc. I would venture to guess most of you had your serious coffee start at Starbucks. They have changed the industry for sure and why do we slam them for making a buck even if they are marketing a lifestyle?

I drink coffee and I try to find good beans for which I am happy to pay more - especially if I think that some of the extra money is getting to the farmer. I also support some of the independant coffee shops in our city not because they are independant per se, but because I like to support local business IF and WHEN they have a quality product. We all do this, we vote with our wallets. I drink most of my coffee at home so for me it is more about buying beans and I look for the combination of freshness, good taste, friendly service etc.

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Dare I mention that Fair Trade IS an option at Starbucks, and the more people who vote with their feet, well, you know....

Hopefully those feet will go elsewhere, considering that there as so many good alternative options for coffee in this city.

If it sounds like I'm slamming Starbucks, I'm not. Starbucks was my introduction to "real" coffee, and I drank a ton of of it for several years. Even developed a hunch, coffee elbow, and burnt upper lip from walking around at all times with a mug/cup of Starbucks coffee in hand. (I must carry coffee while browsing CDs! I must carry coffee while leafing through a magazine at the newsstand!) Starbucks definitely educated consumers and contributed a lot to our present interest in quality coffee. However, the coffee is no longer to my taste and I'm appalled at some of the other crap they sell. The paraphanelia that never sells. The chocolate and candies. The highly sugared drinks (slurpees for snobs!).

It's just a matter of time before they add a magazine rack, sell milk and cigs, and take a run at 7-11.

Edited by sanrensho (log)
Baker of "impaired" cakes...
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Yep, I'm not saying that I solely support Starbucks. If there's somewhere with Origins coffee, I'll go there first, likewise with Bean Around The World, JJ's, what have you. But many of these places wouldn't flourish (or even exist) without the Big Green Machine starting the current (more-elaborate) coffee trend. So, yeah, I go to Starbucks when the other options I'm fond of aren't available. It's odd to me that someone can say that their coffee's no good, we all look for different styles and tastes of coffee, no? I'd love to support even Blenz instead, but (to me) their coffee is too 'grey/dusty/cardboard-y' tasting, but I'm gonna go with what I like.

This is an easy one for wearing your conciousness on your sleeve, but while some of us may support Starbucks here and there, I'm sure many opposers don't think twice about the Phillip Morris/Altria products they consistently keep in their homes without a second thought, or things of the like.

A good article entitled "The Starbucks Paradox" sheds a little light... http://www.arc.org/C_Lines/CLArchive/story7_1_02.html

k.

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