Majority of coffee fans say their local coffee shops make better coffee than starbucks. If that's so, why doesn't starbucks, with all it's money and resources become better than local coffee shops. What is it missing?
Starbucks aren't trying to "beat" specialty espresso places. They aren't even in competition with them really.<p><a href="https://www.fastcompany.com/887990/starbucks-third-place-and-creating-ultimate-customer-experience" rel="nofollow">https://www.fastcompany.com/887990/starbucks-third-place-and...</a><p>"Starbucks goal is to become the Third Place in our daily lives. (i.e. Home, Work and Starbucks) “We want to provide all the comforts of your home and office. You can sit in a nice chair, talk on your phone, look out the window, surf the web… oh, and drink coffee too,” said Kelly. (Notice she put “drink coffee” last???)"<p>A friend of mine was high up in marketing at Starbucks in NY ~15-20 years ago, and her explanation to me back then was "What we supply to people is a comfortable and familiar place to sit and meet up with people. 'Coffee' is just the way we take money off people for that." This was an extremely valuable thing in NY specifically, where lots of even otherwise "wealthy" people lived in small and/or shared places - where inviting people into their homes socially or for small/contracting type business was way less attractive than meeting people at Starbucks, and a welcoming and familiar place to sit for an hour or two with your laptop or notepad is a really nice break from your tiny little NY apartment. "Better coffee" does not make that more valuable. Ubiquity and standardisation makes that more valuable. The coffee only needs to be "good enough" that people wont choose other, less familiar and potentially less welcoming feeling places to do an hour or two's work or meet up with people.
This seems to be an incomplete logical deduction.<p>Premise:
A) many people prefer other coffee
B) Starbucks has the resources to make high quality coffee<p>Assumption: Starbucks values high quality coffee as it's own end or needs to have good coffee too compete in the marketplace<p>Reality : Starbucks does not care about coffee quality as it's own end, only about profits, and they judge their current quality level to be the correct tradeoff for maximizing profits.<p>When you think an entity that is extremely successful at something is failing to understand their core competency, it is usually you who is failing to understand their goals or incentives. People fall into this trap with their understanding of the motivations of politicians as well as businesses all the time.
The greatest strength of Starbucks is also its greatest weakness: scale. Because Starbucks is everywhere, it has to be the same everywhere. Maybe the best coffee in West Hollywood is not the same as the best coffee in Midtown Manhattan, but Starbucks buys in bulk to optimize for what is best across all locations. The local coffee shop can optimize for what is best on a hyperlocal level, while Starbucks cannot.
In what market?<p>They've seriously struggled in Australia-there's a few stores here and there-mostly confined to large shopping centres, but they're not popular and I believe they were down to single-digit number of stores a few years ago.
> If that's so, why doesn't starbucks, with all it's money and resources become better than local coffee shops<p>A local coffee shop optimises along a very parameters (let's say taste only) at the expense of scale, cost and other parameters. A Starbucks has to optimise quite a few other parameters but each of these parameters won't be at the levels that local coffee shops do. Remember, another thing a listed company like SBUX has to optimise is shareholder wealth so that constraint drives the rest of the optimisations.<p>On a related note, refer this[0] article by Joel on quality and scale. Here's a sampler:<p>"That’s because McDonald’s real secret sauce is its huge operations manual, describing in stunning detail the exact procedure that every franchisee must follow in creating a Big Mac. If a Big Mac hamburger is fried for 37 seconds in Anchorage, Alaska, it will be fried for 37 seconds in Singapore – not 36, not 38. To make a Big Mac you just follow the damn rules."<p>[0] <a href="https://www.joelonsoftware.com/2001/01/18/big-macs-vs-the-naked-chef/" rel="nofollow">https://www.joelonsoftware.com/2001/01/18/big-macs-vs-the-na...</a>
Part of the challenge is that most people won't like coffee's actual taste. Good coffee is best drank black. Once you start adding milk and sweetener the coffee taste itself goes to the background.<p>People do a similar thing with tea. In the US tea is mostly drank iced with a crap load of sugar.<p>So if you're trying to sell as much coffee as possible, you'll be serving it mostly with cream and tons of sweetener anyways so its pointless to worry so much about quality coffee. With volume you also have to worry about getting people in an out as quickly as possible. Most of the boutique coffee shops will be making single pour brews that take forever to make. You simply can't dedicate that much time per cup if you have a line of people inside and a drive thru to manage.
When you get a coffee-based drink at Starbucks, you can get that same exact drink anywhere on the planet at Starbucks and it will be nearly the same. They've applied the fast food business concepts to coffee. There is no need to improve the product at all, its not going to increase sales.<p>Also, "better" coffee is subjective. Buy local and shunning big corporations probably impact people's attitudes more about local coffee shops than the flavor of the coffee.
They are fundamentally different philosophies to coffee.<p>Starbucks, as a large business, needs to worry about creating a consistent product which appeals to a wide range of consumers which have an expectation of what their coffee will taste like from week to week.<p>Smaller shops often cater to subcultures looking for ‘interesting’ coffee, so they often source characterful single-origin coffees and don’t worry about their week-to-week consistency so much, since their customer base will often accept this inconsistency in exchange for the extra character they’ll get.<p>I’d thus also argue that Starbucks coffee isn’t necessarily worse (even though I count among the independent-coffee shop fans), but that it is a different drink altogether.<p>Coffee is not unique in this kind of specialty fragmentation. It exists in craft beer, single malt whiskies etc.
> Majority of coffee fans say their local coffee shops make better coffee than starbucks.<p>They are wrong. Are there any blind taste tests? It's harder than wine to test, but should be possible.<p>But the premise is incorrect anyway.<p>Enjoyment of food and drink is tied to way more than taste. History matters. Sight matters. The story matters. Variety matters. Routine matters. The people matter.<p>The trick is to get the coffee backhouse, without suspicion or losing all the extra things that matter and then use pods -<p>30% of Michelin-starred restaurants choose Nespresso machines
<a href="https://www.grubstreet.com/2013/03/nespresso-sold-at-michelin-starred-restaurants.html" rel="nofollow">https://www.grubstreet.com/2013/03/nespresso-sold-at-micheli...</a>
Most conclusions from the comments seem to be that<p>1. Sourcing quality beans is costly.
2. Majority of the people don't care.<p>For 1 - For a single coffee shop, quality of beans is not the most significant part of price. They can increase ~10c per cup and get much better quality of coffee[0]. However, this might be tough as Starbucks need to source same beans across the world.<p>For 2 - Following 1, if you only need to increase 10c, and get significantly better coffee, why won't you do it? You're already the leader in 3rd spaces, why not be a leader in coffee too, for a much better moat?<p>[0] - <a href="https://www.youtube.com/watch?v=7SM2Jrot-ZM" rel="nofollow">https://www.youtube.com/watch?v=7SM2Jrot-ZM</a>
> What is it missing?<p>When I go to my local coffee shop, I feel a sense of warmth and community. A bit of the same sense I get, when I travel to my mother's house for Christmas.<p>No amount of money and resources can buy that.
Probably because for whatever reason it is not costing them revenue to not have the best coffee. I imagine because there are other benefit so starbucks, such as I am guessing familiarity, brand, has a nice "living room" feel about it, etc. If they made their coffee better, would they do better?<p>I think in Australia they have upped their game on the coffee front to survive (many Starbucks closed here years ago), but at the same time it is probably easier to hire baristas due to the coffee culture. They are not the best but I think a Starbucks in Australia would be a lot better than a UK one for example in terms of the coffee quality.
Starbucks coffee sucks and it's overpriced. As someone who patronises it, I go for cheapest brew, Americano<p>Starbucks does not compete with local coffee shops, neither with premium chains. They target different markets, serve different needs and got different business models<p>When do I patronise Starbucks? When I get tired of working from wherever I happen to work from and while on the road. Also I use it as a hangout spots for social and business purposes<p>Where they have to compete as a proper coffeeshop, they fail miserably (Israel) or struggle big time (Australia)
It’s not only about the coffee. How would they find good quality pastries and bread for 15000 stores? How would they create a unique and cozy atmosphere?<p>Food doesn’t scale like that. It’s the same with restaurants.
Starbucks excels where the local coffee shops are really bad or are non existent. In these cases a Starbucks can be like an oasis.<p>These are my experiences from around the world.
Starbucks' goal, like all chains, is not <i>quality</i> per se, but <i>consistency.</i> The coffee at one Starbucks should taste the same as at any other, whether it's in Tokyo or Times Square.<p>To achieve that consistency, they tend to over-roast their beans -- to the everlasting chagrin of coffee lovers everywhere.
Same reason that McDonald's loses ground to high-end burger joints -- they're about broad, consistent mid-level quality.<p>If you want something fancy, specialized, or something that isn't designed to appeal to the lowest common denominator, then you go to a specialty / local place.
Why doesn't Mcdonalds beat local artisan restaurants?<p>Because their strategy is to be easy, convenient, familiar, safe, etc. The food/coffee is pretty bad, but you know what you get. This apparently is what the masses want. Predictable experience.
I can only speak for myself, so this will be very subjective.<p>Starbucks ha no soul, and their drinks are targeted at an American audience who don't know better. As a European I'd rather give my money to espresso bars doing good filter coffee than spend a minute standing in line at a Starbucks. I've been remote working for years and many coffee shops in my home town treat me like furniture by now, since I often worked 4-5 hours daily from their tables, rotating my favourite places. I am good friends with some owners and many many baristas, so I get a bit of a special treatment when I'm there.