What's Up With Starbucks

[Holly Moore]

I stopped by my handy Starbucks this afternoon. The "partner" taking my order seemed a bit down. When I asked why she pointed to the espresso machine. Rather to where the espresso machine used to be. Replacing the traditional machine, two automatic espresso makers.

Why? Two reasons. Moves the line faster and some "partners" were getting carpal tunnel from turning the gizmo holding the ground espresso into the stream head.

I'm sure Starbucks did all sorts of customer research. Unemotionally I might not be able to tell the difference though both the "partner" serving me and I bet I could. But all I could think of was a 7-11 espresso machine.

[NewEnglandSteve]

That's disappointing but not terribly suprising. I go to a Starbucks in Providence a few times a week. At least one of those times there is a line 8-10 deep and a barista struggling to keep up. I'm not sure how effective the system they have is. There is usually one person taking the order and ringing the register, one person getting the coffee and one barista running the entire specialty drink area. Seems to me they could change that around to make it a little more efficient... but what do I know.

p.s. my biggest pet peeve regarding Starbucks: sugar packets instead of a sugar shaker. THAT makes me feel like I just got a Cup O' Joe from the Quickee Mart.

[Blanche Davidian]

How do you tip the barista? With widgets?

[Eilen]

Starbucks has been using these machines for years on the West Coast; I should know, I used to work there! I can only think of one place that still operates the gorgeous La Marzocco, that's in Pullman, Washington, where for some reason the new "espresso machines" are not compatible with the city's water system.

It's funny, they made the switch in order to save time and make the shots more consistent, because that's what the consumers want apparently, and in the three years that I worked there after the implementation, I saw no significant change in either of these categories. If anything, the shots were consistently worse than before, tasted of nothing really, and the hoppers were so small that we spent half our time refilling them. They broke down all the time, and because they are all computerized, we had to call our technician to fix them, which could sometimes take all day. I hated these machines and since I quit Starbucks when I graduated, I haven't been back.

[Holly Moore]

There is a principle in business that as companies become dominant in their business sector they get lazy, take short-cuts, and compromise their product. This opens the door for smaller, more hungry companies to gain market share by offering a product better than what the fat cat company is now offering and similar in excellence or better than the product that earned the dominant company market leadership in the first place.

Translated to how can all this benefit me - perhaps La Colombe in Philadelphia will decide to expand or at least open another store in Center City Philadelphia so that I can find a seat when I go there and not be driven to less crowded, now automated Starbucks.

[Moopheus]

This opens the door for smaller, more hungry companies to gain market share by offering a product better than what the fat cat company is now offering and similar in excellence or better than the product that earned the dominant company market leadership in the first place.

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If that were true, Charbucks should have been put out of business years ago. They operate like the Borg: any threat is absorbed or destroyed.

[arkestra]

as noted above, they've been using the automated machines on the west coast for years. i'm willing to frequent a place that uses an automated machine (indeed, i've been to places that have pretty good automated machines.) the problem is that the machines starbucks uses are lousy. the product is undrinkable (not that it was a whole lot better before they introduced the machines).

[menton1]

If that were true, Charbucks should have been put out of business years ago. They operate like the Borg: any threat is absorbed or destroyed.

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Wow, I haven't seen these automated machines in NJ yet; very disturbing if they come here. You would think they could come up with a beter solution. Carpal tunnel???!!! What about all the secretaries that get that condition?

And yes, they are all-powerful. I've seen them just come into a neighborhood and raise the average rent of all the businesses, because they will pay 1/3 more if they want a location. And then the landlords get greedy with the other tenants.

I've also noticed that Dunkin Donuts coffee (ugh) is now priced equally with Starbucks. So the idea that Starbucks coffee is expensive is a myth.

[Beto]

It all comes down to training, consistency, and efficiency. A Starbucks "barista" can make a whole lot more lattes if all that is required is a push of a button. Since the machine pretty much takes over from there, it's harder to screw it up. Making a proper espresso on a semi-automatic machine, while not particularly difficult, DOES require a fair amount of training. Pushing a button does not.

All of that translates into more revenue.

[Andrew Fenton]

If that were true, Charbucks should have been put out of business years ago. They operate like the Borg: any threat is absorbed or destroyed.

That's the conventional wisdom, to be sure. But it seems not to be true: as this article in the Willamette Weekly discusses, Starbucks has increased the market for independent coffeehouses:

According to the Portland Yellow Pages, before Starbucks came to Portland in 1989, there were 28 coffee shops in the city. Today, there are 91 non-Starbucks coffeehouses in Portland proper, compared with the chain's 48 stores within city limits.

Edited July 18, 2006 by Andrew Fenton (log)

[Moopheus]

I've also noticed that Dunkin Donuts coffee (ugh) is now priced equally with Starbucks.  So the idea that Starbucks coffee is expensive is a myth.

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Well, let's just say that the 'Bucks is overpriced, and now DD is catching up. Which it is. I remember (old man voice) when a coffee and donut were less than a dollar at DD.

"But it seems not to be true: as this article in the Willamette Weekly discusses, Starbucks has increased the market for independent coffeehouses:"

That might be true in Portland, but I think it just reflects the overall increase in the market for specialty coffee (which, to me, doesn't really include Starbucks), especially in the Northwest. You could just as validly argue that there'd be even more shops without Starbucks. And it certainly doesn't seem to be the case here on the east coast.

[RodneyCk]

I was always told they shot some goop from a canister, never really using a barista or espresso machine, like you said, at least on the west coast. I am not familiar with Starbucks coffee products though, just their maple scones which I will give them credit for.

[Andrew Fenton]

That might be true in Portland, but I think it just reflects the overall increase in the market for specialty coffee (which, to me, doesn't really include Starbucks), especially in the Northwest. You could just as validly argue that there'd be even more shops without Starbucks. And it certainly doesn't seem to be the case here on the east coast.

I can't definitively say what has caused the specialty coffee market to grow. I'm just saying that this is a solid piece of evidence against the notion that Starbucks drives independents out of business. You can hate Starbucks all you want (and I won't defend them); but you can't argue with numbers.

Edited July 19, 2006 by Andrew Fenton (log)

[menton1]

One problem the independents face with Starbucks is not only their sheer power, but the strong coffee that one gets addicted to while frequenting Starbucks. It spoils you for all the weak stuff served at most other places. I crave the jolt that I get there that is so hard to find anywhere else.

They also have going the "state of mind" that you get in a Starbucks. Derived from what the Europeans had been doing for decades, it is just a relaxing place to while away some time while sipping a Joe. Most independents (at least around here) just can't duplicate that.

[RodneyCk]

One problem the independents face with Starbucks is not only their sheer power, but the strong coffee that one gets addicted to while frequenting Starbucks.  It spoils you for all the weak stuff served at most other places.  I crave the jolt that I get there that is so hard to find anywhere else. 

They also have going the "state of mind" that you get in a Starbucks.  Derived from what the Europeans had been doing for decades, it is just a relaxing place to while away some time while sipping a Joe.  Most independents (at least around here) just can't duplicate that.

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Are you sure that jolt is not being mistaken for burnt beans? I am lucky to be in San Francisco where the coffee houses here are far better than what is served or passed off as coffee at Starbucks.

Also, every time I am drug into a Starbucks, there is no relaxed atmosphere; it is like being at McDonald's, people pushing for the creamer and sugar packets, noisy lines, no tables. The problem is that they are usually located in high traffic areas. Neighborhood coffee joints and those off the beaten path are far more relaxing.

[menton1]

Yes, I suppose in the center-city locations it is quite a frazzle. But here in the NJ suburbs they are much less frenetic.

If they change the coffee every 30 minutes like they are supposed to, the coffee does not taste burnt. Of course, the less dedicated baristas might let it go longer, hence the burnt flavor. But bringing it to their attention usually results in a new brew, if you can wait the 4 minutes...

[GordonCooks]

It all comes down to training, consistency, and efficiency.  A Starbucks "barista" can make a whole lot more lattes if all that is required is a push of a button.  Since the machine pretty much takes over from there, it's harder to screw it up.  Making a proper espresso on a semi-automatic machine, while not particularly difficult, DOES require a fair amount of training.  Pushing a button does not.

All of that translates into more revenue.

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Not always - not that Starbucks is my personal favorite - but something should be said in regards to personal service. Imagine those automated bar dispensers and how much fun they are.

[Muskoka kid]

In Toronto, Far Coast Coffee just launched. It is a subsidiary of Coca-Cola and the first test market. It is a fully automated machine that uses the pod system. It goes further than Illy or Starbucks as the pods are sealed and not exposed to oxidiation. Coffee is good and seems to be a recent trend in restaurants to offer a consistent product.

[Beto]

In Toronto, Far Coast Coffee just launched.  It is a subsidiary of Coca-Cola and the first test market.  It is a fully automated machine that uses the pod system.  It goes further than Illy or Starbucks as the pods are sealed and not exposed to oxidiation.  Coffee is good and seems to be a recent trend in restaurants to offer a consistent product.

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Illy's pods are sealed in nitrogen-flushed containers to slow the effects of aging.

Starbuck's machines don't use pods, they have built-in ginders for whole beans.

[phaelon56]

Starbucks does use whole beans - yes. And in some US locations (and, from what I understand - targeted overseas locations) they are still using traditional semi-auto machines and grinding/tamping the old-fashioned way.

But I still can't get past the burnt taste of their "signature roast profile" and it's not a function of the coffee sitting in the thermal containers for more than 30 minutes after brewing.

I recently saw a commercial video in-room at a Westin Hotel on their "information channel". It was about coffee roasting and caught my eye immediatley. before I became aware that it was a Starbucks promotional piece the Roast Master was dronign on about hwo they roast the beans until a sheen of oil appears on the surface and then "take it a bit further to develop our signature dark roast style".

Uhhhh.... has he been to Roasting 101? If a sheen of oil appears on the surface of the bean during the roasting process you burned/scorched the beans.

The biggest problem I seee with Starbucks in many areas relative to their impact on independent operators is their extremely deep pockets. They can afford to spend upwards of $750,000 to $1,000,000 just to open one branch in what most of us would think of as a secondary location (in a third tier market no less).

And they can wait for years and years and years for that location to produce a real profit because it's all about same store % sales increase from year to year. If that metric looks good then Wall Street and the investors are happy.