"From: Howard Schultz
Sent: Wednesday, February 14, 2007 10:39 AM Pacific Standard Time
To: Jim DonaldCc: Anne Saunders; Dave Pace; Dorothy Kim; Gerry Lopez; Jim Alling; Ken Lombard; Martin Coles; Michael Casey; Michelle Gass; Paula Boggs; Sandra Taylor
Subject: The Commoditization of the Starbucks Experience
As you prepare for the FY 08 strategic planning process, I want to share some of my thoughts with you.Over the past ten years, in order to achieve the growth, development, and scale necessary to go from less than 1,000 stores to 13,000 stores and beyond, we have had to make a series of decisions that, in retrospect, have lead to the watering down of the Starbucks experience, and, what some might call the commoditization of our brand.Many of these decisions were probably right at the time, and on their own merit would not have created the dilution of the experience; but in this case, the sum is much greater and, unfortunately, much more damaging than the individual pieces. For example, when we went to automatic espresso machines, we solved a major problem in terms of speed of service and efficiency. At the same time, we overlooked the fact that we would remove much of the romance and theatre that was in play with the use of the La Marzocca machines. This specific decision became even more damaging when the height of the machines, which are now in thousands of stores, blocked the visual sight line the customer previously had to watch the drink being made, and for the intimate experience with the barista. This, coupled with the need for fresh roasted coffee in every North America city and every international market, moved us toward the decision and the need for flavor locked packaging. Again, the right decision at the right time, and once again I believe we overlooked the cause and the affect of flavor lock in our stores. We achieved fresh roasted bagged coffee, but at what cost? The loss of aroma -- perhaps the most powerful non-verbal signal we had in our stores; the loss of our people scooping fresh coffee from the bins and grinding it fresh in front of the customer, and once again stripping the store of tradition and our heritage? Then we moved to store design. Clearly we have had to streamline store design to gain efficiencies of scale and to make sure we had the ROI on sales to investment ratios that would satisfy the financial side of our business. However, one of the results has been stores that no longer have the soul of the past and reflect a chain of stores vs. the warm feeling of a neighborhood store. Some people even call our stores sterile, cookie cutter, no longer reflecting the passion our partners feel about our coffee. In fact, I am not sure people today even know we are roasting coffee. You certainly can't get the message from being in our stores. The merchandise, more art than science, is far removed from being the merchant that I believe we can be and certainly at a minimum should support the foundation of our coffee heritage. Some stores don't have coffee grinders, French presses from Bodum, or even coffee filters.Now that I have provided you with a list of some of the underlying issues that I believe we need to solve, let me say at the outset that we have all been part of these decisions. I take full responsibility myself, but we desperately need to look into the mirror and realize it's time to get back to the core and make the changes necessary to evoke the heritage, the tradition, and the passion that we all have for the true Starbucks experience. While the current state of affairs for the most part is self induced, that has lead to competitors of all kinds, small and large coffee companies, fast food operators, and mom and pops, to position themselves in a way that creates awareness, trial and loyalty of people who previously have been Starbucks customers. This must be eradicated.I have said for 20 years that our success is not an entitlement and now it's proving to be a reality. Let's be smarter about how we are spending our time, money and resources. Let's get back to the core. Push for innovation and do the things necessary to once again differentiate Starbucks from all others. We source and buy the highest quality coffee. We have built the most trusted brand in coffee in the world, and we have an enormous responsibility to both the people who have come before us and the 150,000 partners and their families who are relying on our stewardship.Finally, I would like to acknowledge all that you do for Starbucks. Without your passion and commitment, we would not be where we are today.
Onward, but to what end? We will have to wait and see this play out. I can tell you myself that the so-called "Starbucks experience" is at this point much like a fast food experience for myself and many others. My last two visits to the siren's abode were not exceedingly pleasant. I will start with the first, at a mall location in Arlington Texas, and tell of the other later.
You see, my brother-in-law asked if I wanted some coffee. I hesitated and calculated the money I had left in my wallet. I had plenty, but was rationing it for the rest of the week. I glanced over at the Starbucks. I did want coffee, but did I want that coffee?
"I'm buying," he tempted me.
Starbucks or not, I fell for the siren's song. It was free after all.
We cross the line and enter in, there is no one in the establishment so we take our time gazing at the menu. I was new to the coffee scene and there were many things I hadn't tried yet. Russell settles on a tall macchiato, and I end up going with a decaff mocha (7 o'clock PM is about the only time I really enjoy chocolate). I step to the side to watch. I can't see the employee pull the shot because of the machine placement, but I had an excellent view of her inadequately mix the chocolate and espresso. Disappointed, I watch her steam the milk. Another let down. She didn't know what she was doing, like a bad forger trying to recreate a de La Tour. The froth was there, but faded quicker than it had appeared, and while I didn't test it, I bet it wouldn't hold even half a teaspoon of sugar. The taste was not spectacular, but not altogether horrid. The espresso and chocolate had not been mixed together well enough before the milk was added, and this was quite apparent as I sipped the newly forged beverage.
"Who cares, you stuck up brat!" you may be thinking by this point. "Who cares?" Well, that's just it, a lot of people don't. Starbucks doesn't taste like like it came from the sewer, so they'll drink it, seemingly oblivious to the fact that it isn't the pinnacle of coffee.
The point of this blog is to show that Starbucks is not the best, that there is much better coffee out there. They brought this fall on themselves when they put profit before people. Why do I care? I care because there is quality coffee out there, and there are quality baristas who really do care about giving you more than a drink, but they want to give you an enjoyable experience. I know that's a cliche, but sometimes things are cliched because they are true. Sure, it may be more convenient to speed through the drive in window and get your 15 sec pull of espresso, but is it worth it? Maybe; that's something you have to decide for your self. I'm sure Ulysses could have taken the long way around, but he took the fast track to the sirens' island and look how he ended up: tied to the mast of his vessel, begging for what would have been his death (to be with sirens).
That said, if you dine at Starbucks you won't be eaten by mythical creatures, but chances are you're being deprived of an excellent coffee experience, and instead you are served the prepackaged Starbucks Experience, and that, my friends, is far below par.