Will it save or sink the brand?

Once the darling of the coffee snob world, Starbucks has taken afew hits of late. But will instant coffee save or sink the brand?

I had the opportunity to try the new Starbucks instant coffee at a conference last week. Initially my early morning colleagues and I were a little confused at the apparent offering of ‘hot water’ at the coffee stand. Low light, a pre-coffee moment and small type size on the package had most of us stumped thinking the little packets of coffee were sugar. Once we realized it was coffee, there was a collective pause as we waited for the first mover. This was Vancouver after all. The land of java jackets and fresh brew. Where we’ve been educated to accept nothing short of a tightly orchestrated chain of events and high standards to brew the perfect cup.

And we’ve educated to expect that experience by Starbucks no less. So this was definitely a departure. Starbucks says they will revolutionize the instant coffee category. Indeed, the stuff tastes sort of like a real cup. That’s if the hot water is actually hot. And it’s that type of lack of control that ultimately cheapens the experience into a commodity. That, and the fact that it’s available at Costco to the masses, a retailer associated with low cost. Plus, let’s face it, playing the field with other instant coffee brands is a long way from the premium ‘third place’ experience they staked their brand position on. Instant has long been associated with poor quality.

Analysts estimate the instant coffee category at $17 billion. Kraft, Sanka, Folgers, and Nescafe are the dominant players. This could be an opportunity for the over expanded retailer to turn their fortunes around. Or will this represent a big gamble for short term monetary gain and ultimately further tarnish the former premium, now commoditized brand?

Check out the promotional video here: http://www.youtube.com/watch?v=c1YU5kRmDUo
Costco to sell it as of April 2: http://www.seattlepi.com/business/404556_starbucks2.html
CBC coverage: http://www.cbc.ca/consumer/story/2009/02/18/starbucks-instant.html

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