Taster's Choice welcomes Starbucks to the Hood ~ Brand Mix

Wednesday, June 10, 2009

Taster's Choice welcomes Starbucks to the Hood

A few weeks ago, I taste-tested VIA, Starbucks surprising entry into the instant coffee market, to see if it stood up to its claim that it tastes as good as fresh-brewed coffee. And, give or take, it does.

In a Starbucks VIA Italian Roast vs. Starbucks Ground Italian Roast vs. Taster's Choice Original taste-off, as I said in that post: "In terms of appearance, aroma, mouthfeel and taste, VIA is pretty close to the Ground Italian Roast and miles different/better than Taster's Choice. Lots of body, no off-notes and no artificial flavor."

So what, I then said. I couldn't see the benefit for Starbucks to have the best instant coffee on the market and I still can't. But I could see the potential benefit for Taster's Choice (the brand I once managed) even though it doesn't taste as good and, sure enough, here it comes with a nationwide campaign to try and take advantage of the opportunity.

The campaign focuses on the the huge price difference between VIA (83 cents per cup*) and Taster's Choice (21 cents per cup*) with ads that mimic the style of Starbucks own advertising. The same theme is carried online with the website which includes a budget calculator and other unsubtle price comparison messages.

Given the recessionary times, the price gap and (in my opinion) the big taste advantage for VIA, this approach was perhaps inevitable but I'm not sure how effective it will be. I guess the hope is that VIA will generate interest in the instant coffee category and that there will be some who will balk at paying the VIA price and will try Taster's Choice instead and be satisfied with its taste profile. Optimistic.

What the new campaign is perhaps more likely to do is reposition Taster's Choice from being the premium (and best quality) brand in instant coffee to the one that's the most expensive, mainstream player. That could end up putting pressure on its prices to get it more in line with the other mainstream brands.

I'm actually hoping, for Taster Choice's sake, that VIA is an (unlikely) success. If it can carve out a niche in this previously unexplored high-priced area, it will give Taster's Choice space to launch higher quality, more expensive products that it so far has been unable to get into the market (despite several attempts). The Nestlé R&D team is quite capable of developing products as good as VIA but, up until now, such products would never have been pursued because the cost of making them would require a retail price perceived to be unrealistically high. If VIA can somehow generate interest and a market for this level of quality that will open up a world of new opportunities for my old brand.

The launch of VIA is a little like someone building an expensive home in a downtrodden neighborhood. In the best case scenario, those with the wherewithal will take the chance to renovate and increase their property value and the whole neighborhood will be revived. But perhaps the more likely case is that the expensive home loses its value and the owners will wonder what they were thinking moving there in the first place.

My cost per cup where purchased (sachets)


Olga said...

Starbucks has been criticized for its Via line extension. However, its prospects are not necessarily gloomy, especially in the UK, which is a nation accustomed to drinking instant coffee. I've blogged about Via as well, see direct link to my post: http://www.schmoozyfox.com/?p=510

Anonymous said...

I just tried Taster's Choice Vanilla instant coffee which was on sale at Safeway for about $2.25 for 20 servings. It was excellent!

I've also tried Starbucks' VIA Columbian and Italian Roast. In the 3 pack, it is about $1/serving. It is very good, but not ten times as good as Taster's Choice, so I won't be buying any more VIA anytime soon.

Étienne said...
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