Starbucks' New Brew Will Leave a Good Taste in Shareholders' Mouths

Starbucks (SBUX) may be getting some good ideas from its idea website, but input from the masses is apparently not helping the taste of its coffee.

As I find myself doing more and more, I turned to Newsflashr to dig up the latest, not just about Starbucks, but anything. If you haven't tried Newsflashr yet, don't fret. I hear that founder Gal Arav is still accepting new visitors.

Now, back to the taste of Starbucks coffee. Newsflashr turned up an April 9 story by James Poniewozik at Time. Mr. Poniewozik drinks coffee all day, so he jumped at Time's request to try Starbucks' new Pike Place Roast.

Unfortunately, he wasn't thrilled. He found it to be "a cup of coffee that tastes less like a cup of coffee" and more "like the American statistical coffee median." What's more:

Starbucks says it took input from about 1,000 customers in designing Pike Place, and I could taste every one of them in there. This was a cup of coffee brewed by committee.

All in all, not a bad cup -- nothing too objectionable, a perfectly fine if not completely fresh-tasting cup of coffee that I might expect to get at Dunkin, or, on a good day, Mickey D's. Which is the problem: Starbucks is staking its future on making a cup of coffee for people who don't like Starbucks -- a McDLT in a cup.

Here we run into the classic big business dilemma.

Let's face it, most folks don't care all that much about the bean background of their cuppa joe in the morning. They just want some coffee. Coming up with a cheaper blend that appeals to the highest percentage of mouths is good business sense, even if it doesn't appeal to the critics.

It's the same with hamburgers and cars.

I don't know a single hamburger lover who says the Big Mac is America's best tasting, but I promise that it's America's (and the world's) best selling.

I don't know one editor of a car magazine that says the Toyota Camry is the most inspired, pleasant drive ever designed, but it's the most frequently bought passenger car in America.

Critics look for products at the outlying edge of taste, presumably the higher end. Companies create products for the fat part of the bell curve, the "seven out of ten people prefer" kind of result.

Observant people learn quickly in life that the crowd is usually wrong. Maybe, but selling it what it wants is usually right. If the crowd asked for Pike Place Roast and Starbucks brewed it, then that's going to be good for business.

What's good for business will be good for the stock, and a rising share price will leave a better taste than any cup of coffee ever could.

Comments

[NI123]

Excellent points, and all true, with one exception - I'm not sure SBUX has bottomed yet.

[oddrim]

your idea is sound, but i quit going to starbucks when i found i could not get a good cup of coffee in the morning, choice is the answer

[shel1624]

coffee taste is a purely personal preference. if i need coffee and there is no sbux around, i get a mcd's and have tried dunkin. it makes me chuckle because with all the hype, there is no comparison between sbux and the others. i think the pike place roast is great. i like the aroma in my vehicle and the taste is great. my wife buys it for our home coffeemaker. as a sbux shareholder i think we all deserve a special dividend for our loyalty.

[trobs007]

How dare you compare the Pike blend to Dunkin or McD's? ;-)