Business World


Eyes on Starbucks

In this issue we focus quite a bit on Starbucks, their 600+ closings, their restructuring, their ability to stay in the news 24/7 and the hardships the specialty coffee category is experiencing. Starbucks is a unique company/concept. The company instills fear among competitors while at the same time they are revered. Many Mom & Pop stores now hail Starbucks for helping them get into the bar/cafe category, staying in the industry and helping them expand. Nowhere has one company does so much for the coffee experience.

It is accepted as fact that Starbucks increased the size of the premium coffee and coffee bar market. They use their international recognition and reputation to expose customers to high quality beverages. Those new coffee drinkers sooner or later move beyond Starbucks to see what other shops might have to offer, to expand their palettes and to experience different coffeehouse environments. I’ve seen the phenomenon first-hand, watching my teenager hang at Starbucks, frequenting every coffee joint in the city and now imbibing way too much caffeine, much to her father’s chagrin. Coffee was always the loss leader in the supermarket, the cheap beverage in the diner, with free refills. Now a cup can cost $5.00 - what a country!

So now with the news of Starbucks reigning in their domestic U.S. growth, will the financial market become more leery of that segment of the coffee industry? Will our financial institutions take a “wait and see” attitude as our economy constricts? Will bankers suddenly find themselves not so giving or forgiving towards our traders? Will consumers forgo the $5.00 latte as their own paychecks neglect to compensate for rising costs?

Stay tight, it’s going to be a rocky ride.

Jane McCabe
Editor & Co-Publisher

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Tea & Coffee - September, 2008

Tea & Coffee Trade Journal is published monthly by Lockwood Publications, Inc., 3743 Crescent St., 2nd Floor, Long Island City, NY 11101 U.S.A., Tel: (212) 391-2060. Fax: (1)(212) 827-0945. HTML production and Copyright © 2000 - 2013 by Keys Technologies and Tea & Coffee Trade Journal.

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