Remorseful Starbucks tries to revive the category it strangled half to death ~ Brand Mix

Wednesday, September 30, 2009

Remorseful Starbucks tries to revive the category it strangled half to death

The new Starbucks ad (wait, it's a 1985 Folgers ad, apparently). The real ad (aired on SNL) is here

Once, in America, there was a thriving instant coffee market. There were brands like Brim, Maxim and Sanka and manufacturers came up with fun, technical ways to differentiate themselves: Folgers had its crystals, Taster's Choice had its freeze-dried process. There was even Postum, a roasted grain coffee substitute. The coffee, to be honest, didn't taste that great but you could get used to it. It wasn't like unlimited refill, diner-style coffee or even coffee from the famous "Anthony's in Atlanta" was all that fantastic either.

Then, blowing in from Seattle, came the winds of change. Not only did Starbucks coffee taste better, but you got a whole third-place-experience thrown in too.

Those were cruel times for those (like me) working in the instant coffee business. We watched, aghast, helpless, as people changed their drinking habits and abandoned us. The average age of the dwindling instant coffee population kept going up and up and the shelf space allotted to us by supermarkets kept going down and down.

Now, after all hope should logically have been abandoned, it's Starbucks itself riding to the rescue. After a seven-month test, Starbucks is going national with VIA, its own instant coffee product. And it's giving the launch the full treatment. There's a TV campaign and taste challenges and it all adds up to what CEO Howard Schultz calls "the biggest investment that we've made in a national launch."

Who knows whether the launch will work? It seems unlikely but what's to say that there can't be an instant revival? It could be like the Mustang, leggings or Space Invaders.

For long-suffering instant coffee manufacturers, one thing's for sure. It's a chance and a lifeline. Time to get moving. It looks like at least one of the players is alive to the opportunity. Nestlé has already launched some (for them) aggressive comparison marketing. That's a start but, hopefully, they've got some new products in the works as well. Now that VIA is out there with a previously unimaginable price point (almost $1 per cup, 5x as expensive as a cup of Taster's Choice), there's all sorts of ways that they can come up with to deliver a better tasting product.

Good times for instant coffee may yet be rolling again.

Earlier Brand Mix posts about VIA:
1) Starbucks VIA instant coffee taste test. Is it as good as they say?: Where I confirm that VIA does live up to its claims that it tastes as good as Starbucks brewed product and ask the question: So what?
2) Taster's Choice welcomes Starbucks to the Hood: Where I report on Taster's Choice initial marketing response

1 comment:

denise lee yohn said...

interesting perspective, martin -- it's kind of like, instead of following the adage "if you can't beat 'em, join em'", starbucks is saying "even though we beat 'em, we're joining 'em"

i really don't know how this move benefits starbucks -- and a colleague of mine and former starbucks fan weighed in with a damming assessment:

i guess only time will tell not only what starbucks' strategy is but also whether or not it works

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