Taster's Choice samplers trying to stick it to Starbucks

Screenshot: www.tasterschoice.com

Who would have thought a year ago that Nestlé would launch a national "taste for yourself" sampling campaign comparing Taster's Choice to Starbucks? The idea would have seemed absurd. Incredible. Ridiculous. But when Starbucks launched VIA, its own instant coffee brand, the doors of opportunity flew open and Nestlé sampling teams are indeed on the march.

From my biased perspective, as a former Taster's Choice brand manager, here are a few observations about this peculiar turn of events:

1) What an opportunity: Typically, a new competitor coming into your market with a bigger brand and a superior product would lead to lots of weeping and gnashing of teeth. But this is a case where such weeping would be misplaced. The VIA launch creates news in a category that never makes the news. It gives the category credibility it sorely lacks. It establishes a price point that makes Taster's Choice seem cheap by comparison (68 cents for VIA vs 17 cents a cup for TC). And it may bring new, younger consumers into the category who would never otherwise have been interested. If VIA is successful, the entire instant coffee category will be revitalized. It's not just an opportunity, it's a once-in-a-lifetime opportunity.

2) The response: To their credit, the Nestlé team has been quick to respond to the opportunity with its sampling campaign. But the approach is defensive, intended to protect and repel rather than leverage. The fact is that Taster's Choice will be better off if VIA succeeds than if it fails. So instead of comparing prices, talking about how the VIA launch is a "lot of hype" and otherwise trying to stick it to VIA, the better approach would be to work out how to live and thrive in a VIA-successful world.

That said, I know that creating/selling a crisis is one of the best ways to get a bigger marketing budget. If more money was obtained by using a sky-is-falling argument (such as: "OMG, Starbucks is launching an instant coffee. We need more money or we'll be ruined") then it's not surprising that the campaign funded by those dollars has gone negative.

3) The problem of taste: The current campaign focuses on the one clear cut advantage that Taster's Choice has over VIA. That it's cheaper. Which is undeniably true. What the campaign doesn't talk about is the fact that VIA tastes a lot better. As I posted earlier, the VIA claim that it tastes as good as a Roast & Ground coffee actually stands up. I have no doubt that the Nestlé product developers could come up with something of similar quality if they were allowed to increase the cost of goods somewhere in the VIA ballpark. Hopefully they are working on that.

4) The media: A while back I criticized Nescafé's Twitter presence (@nescafeusa) as a "rather bland, occasionally ill-fitting, half effort where the toe has barely touched the water." While the new sampling campaign hasn't exactly exploded the number of followers (762 as of Nov. 3oth vs. 558,217 for Starbucks(!)), it has provided some relevant material. The tweets now feature up-to-the-minute reports of where the Taster's Choice samplers are handing out samples. Same for the Nescafé Facebook page. It's a small example of the evolution of marketing and media. Sampling programs help create the content for social media which, in turn, makes the sampling programs a more valuable part of the marketing mix.

By the way, if you want to taste Taster's Choice for yourself and haven't come across a sampling team, you can order from here.

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

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)

Starbucks VIA instant coffee taste test. Is it as good as they say?

Photo: me

It's the Starbucks VIA Italian Roast vs. Starbucks Ground Italian Roast vs. Taster's Choice Original taste-off. Via was launched earlier this year with a bold claim--that it tastes as good as fresh-brewed coffee. Let's just see how this claim stands up shall we?

First a note about the two judges: Me and my wife. We're biased. We both worked at Nestlé on its instant coffee business (which includes Taster's Choice). Before taking the test, we promised not to let our undying loyalty for our old employer impair our judgment. Honest. (We did blind tasting to compensate for bias.)

The results: The VIA claim more or less stands up. 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. We both agreed that sample #2 (the Ground sample) had a slightly richer and more distinctive taste than sample #1 (VIA) but nothing that either of us would have picked up without a side-by-side comparison. I think it's fair to say that Starbucks has successfully reinvented the instant coffee category and shown what's possible.

The problem: So what? How does Starbucks benefit from having the best instant coffee on the market? One reviewer said that he really liked VIA and would be sure to take it with him the next time he went camping. Ouch! Is that the market? Overseas will be a better opportunity. There are many countries (mostly the original tea-drinking countries like England, Japan, China and Korea) where instant coffee is a much more important category than it is in the States. But what's the angle in the States?

Pricing, another problem: VIA is quite extraordinarily high-priced. Its cost per cup is 83 cents vs. (roughly) 32 cents for the ground coffee and 21 cents for Taster's Choice. Is this price point an attempt to signal quality? Or is it a reflection of production costs? I can't imagine that such a price point would work in supermarkets which would otherwise be a natural outlet for distribution.

The potential winner: Instant coffee and, curiously enough, Taster's Choice. If VIA makes enough of an impression to change consumers ideas about what's possible with an instant coffee product, then all the players in that category can benefit. Nestlé has succeeded with more expensive blends in other markets but those same products have failed here. Perhaps VIA will open the way for another try?

Notes:

On the technology: VIA is described on the label as "soluble and microground" coffee. What that means to me is that the product is a mix of traditionally-prepared instant coffee (which is brewed and then dried) and some coffee beans that have been ground but not brewed. These "microground" beans may not add significantly to the taste but they will add mouthfeel - the undissolved solids provide a thickness to the coffee that typical instant coffees lack. (You can actually see the grounds in the cup after drinking.) I imagine that the other way they improved the taste was by having a much lower extraction level than is typical for instant coffees (which does drive the cost up).

On other reviews: There are many other reviews of VIA. Most of them say the same thing: surprisingly good for an instant coffee.
1) Hivelogic
2) Viewpoints
3) WalletPop

On the new Taster's Choice packaging: Sorry, gang, I hate it. Not only have you killed the Taster but the cup of coffee itself looks like a grey, solid slab of cooking chocolate with zero appetite appeal. It's Tropicana-bad. Sales down 20%?