Maria Bartiromo interviewed Starbucks CEO, Howard Schultz about the "new" Starbucks and asked him the one question he probably didn't want to hear:
Earlier you said to me, the media has made such a huge deal about all of Starbucks' competition. So tell us straight out what the story is here. Have you been hurt by the premium coffee sold at McDonald's (MCD) or by Dunkin' Donuts getting more aggressive?"First off, I don't think there's premium coffee being sold at those fast-food places..."
"Second, this is not about the competition. Our customers are not buying a hamburger and fries and then going to get espresso. That's not the case. What is the case is that there's a downturn in the economy. As a result, people are coming in less often than they did a year ago. But we control our own destiny. And what we strongly believe is if we take care of our customers, produce the kind of product that is distinctive, and exceed their expectations, we're going to be in great shape. But we're going to couple that with relentless innovation that you'll begin to see in the marketplace in the months ahead. Uh-oh! That's not what Consumer Reports says! From Consumer Reports' fast food coffee taste test:
McDonald's, $1.35, was decent and moderately strong. Although it lacked the subtle top notes needed to make it rise and shine, it had no flaws.We consider Starbucks to be a fast food place. Don't you? Drive-thrus? Check. Mini-stores inside big box stores? Check. Menu items with 700+ calories? Check.Burger King, $1.40, looked like coffee but tasted more like hot water. It was a little sour, with an unusual hint of chocolate.
Dunkin' Donuts, $1.65, was weak, watery, and pricier than Starbucks. It was inoffensive, but it had no oomph. (If you brew with Dunkin' beans at home, you can make it stronger.)
Starbucks, $1.55, was strong, but burnt and bitter enough to make your eyes water instead of open.
CR's take. Try McDonald's, which was cheapest and best, or make your own coffee—just call it something special. The other three were all only OK, but for different reasons.
Howard Schultz on Reinventing Starbucks [BusinessWeek via Starbucks Gossip]
Starbucks wars [Consumer Reports]








Comments
Don't know where Consumer Reports was shopping for coffees, but it certainly wasn't in Syracuse, NY - McDs coffee here is pretty awful (Not that DD or BK are much better, if you drink your coffee black). Then again, Starbucks, black, isn't always that great either.
Better question: where on earth was Consumer Reports getting those prices? (I presume smalls, but still)
Until they get some Wawa's down south, I am sticking with my Dunkin' Donuts. Any Starbucks coffee I try always tastes pretty bitter.
"Get cha a cup o' joe in a styrofoam cup at da 7-11..." Enough of this "premium" coffee garbage... It was foreign beers back in the '80s and now that all the baby boom yuppies are on the wagon from their alcohol addictions they transfered to Starbucks...
Starbucks CEO, Howard Schultz's response was corporate speak for "we're fighting the competition."
So whoever was tasting coffee for Consumer Reports has no idea what good coffee tastes like. No surprise there.
Yeah, he totally threw the "fast-food" in there as a slur. But yeah, I guess a place where you duck in and out in a couple of minutes with food/drink could be considered fast-food, so Starbucks would fit that description.
Well, Mcdonalds was making their coffee at 140 degrees F for a while to mask the bad taste of their coffee. When they got sued for that, I bet they had to improve the quality if their coffee.
Lets face it we were all dupped by Starbucks. They sold an image. We bought it. When we awoke from our stupor we realized that we were buying crap tasting coffee for a crazy high price. Now people are realizing they can get better coffee for cheaper at McDonalds. The Pied Piper's flute is out of tune and the spell has been broken.
Am I the only one who is struck by how much of a story this ISN'T?
I never buy normal coffee from Starbucks anyway, and most people I see that go there don't either. It's difficult to really compare Starbucks with these other places because I kind of doubt the company's main selling point is just normal coffee.
Starbucks probably makes little money on their brewed coffee. It's their $3-5 milk-based espresso and frozen drinks that bring the big profit.
McDonald's "espresso" drinks are disgusting. They put about 50 pumps of gross syrup in them and the espresso is bitter and awful, probably largely due to the fact that their employees know nothing about how to prepare coffee other than what the little illustrated guide next to the machine tells them to do.
And I'm guessing the fast-food comment means that people aren't going to Starbucks saying "gee I wish they had greasy hamburgers here" then visiting a McDonald's and saying "Hallelujah! Coffee AND greasy hamburgers!" so technically it's a totally different market. People go to Starbucks to get their latte, period. People don't go to McDonald's JUST for a latte.
@Finder: Well least they know Starbucks tasted bad.... since apparently Starbucks own CEO doesnt know what good coffee tastes like either.
Ill say around where I live, Dunkin Donuts is the way to go. Its a little more money than McDs but a much smoother flavor than Charbucks, even after their "new" coffee.
Dunkin' Donuts coffee kicks ass! I don't know what Consumer Reports was drinking. As far as Starbucks coffee, I find in marginable at best. I'd much rather have a Panera or Caribou coffee for a quick fix.
Whats the difference between premium coffee and coffe? Is there a bean called the 'premium coffee bean' and you have to know a secret handshake to buy it?
I tried some coffee at Starbucks the other day, it tasted burnt and frankly, like crap. I took it back to get it replaced the the sweet courteous little bitch behind the counter told me its suppose to taste burnt. "Thats the beans" she stated. I might add she did this while giving me one of those head cocked to side, eyes rolling looks. At that very moment in time, I decided I had made my very last Starbucks purchase.
I think it's ironic that they dis McDonalds coffee, when at least here in the northwest McD's uses Seattle's Best coffee, which is owned, oh by Starbucks.
I kinda hate McDonald's, but, as far as regular coffee goes, theirs is good stuff.
I much prefer it to Starbuck's, but don't like going to McDonald's to get it. I don't stop by somewhere just to get a cup of coffee; we have a perfectly good coffeeshop in the building where I work.
I used to love the old McDonald's Coffee. Terrible, hot, bitter - it was a thing of beauty when you were up at 5:30 in the morning, starting on a long car trip back home from college for the weekend. One sip and you were awake. Add a greasy potato thing with it and you were all set. Seattle's Best is my coffee place of choice now.
@thirdbase:
In the 'old days' of the early nineties, Starbucks coffee wasn't half bad. They still had the local coffee shop feel. When you bought coffee beans, they still scooped it out of the bulk bins into the 1lb bags and weighed it out right in front of you.
They long ago lost the mystique of the local coffee shop and I pretty much stopped buying their beans when they were packed offsite and shipped to the stores. However, the coffee really wasn't THAT bad until about the last 5-8 years when I couldn't even stomach drinking a cup of their black coffee. I frequently make strong coffee from dark roasts and it NEVER tastes anywhere near the same as starschmucks horrid concoction.
If you like coffee, do yourself a favor and get to know a local roaster, buy fresh and brew it yourself. I save a ton of money this way and my coffee tastes WAY better than starbucks.
Schultz is right. McD's is not selling premium coffee any more than they are selling premium hamburgers.They rolled out some new blend,spent a gazillion dollars on advertising to promote it,blew a couple of reporters to ensure favorable coverage and voila! They now serve premium coffee.
Okay. Lets play "what if"...
What if they really spent the bucks on a premium coffee blend and worked hard to train their employees to maximize its flavor and aroma and instituted strict guidelines about freshness,serving temperature,etc ?
IF they did that,you can be damn sure that some bean counter (bad pun) DEEP in the bowels of McDonalds is even now working on a way to adulterate that blend and "cut costs" because "the customer will never notice". Even if they made a decent cup a joe for a little while,in 2-3 years,it will be a difefrent (cheaper) product. What Schultz is trying to do here is take his company back from the bean counters and make it an experience instead of just a cup of wake-me-up. Are their prices high ? You betcha.But the product is worth more and he doesn't want the line to be blurred between McDonalds and Starbucks.
When I lived up north, 7-11 coffee was what I preferred. McDonalds coffee was like liquid crack.
What gets me is, how Starbucks claims Dunkin' Donuts is a fast food joint that doesn't sell premium coffee.
Down here in the south where I live it's gas station coffee or Krispy Kreme. I wind up making my own now and kicked the $10/day coffee habit.
@econobiker: Do not ever equate domedtic beers with imports. Sure not all imports are created equal, but the worst import is not nearly as crappy as that piss water king of beers. Givme me a break!
"it lacked the subtle top notes needed to make it rise and shine"
What does that mean? The writer decided to get a little too creative for lack of anything relevant to say about a cup of coffee...
I think Starbucks deserves the credit for encouraging the mainstream to upsell itself on coffee in general. Half of the people who turn their noses up to it now were probably still guzzling Folger's Instant prior to sampling 'Bucks, myself included. I grind n brew myself the most delightful cup from fresh, locally roasted beans now, and on the rare occasion I go for some retail Joe, it's not so much for taste. It's to keep my airbags from inflating.
And that retail Joe is from Wawa.
@Gaambit: YES! WAWA! Love it! You can order Wawa coffee from wawa.com.
@Gaambit: Woohoo! WAWA!
"What is the case is that there's a downturn in the economy."
=
"Our product does not hold enough value to weather the change in spending habits."
Ouch! Let your PR do the talking next time.
starbucks = hot armpit juice!
Puh-leezez!
Starbucks is the McD's of coffee.
I prefer Peet's.
Nothing will ever beat the independent coffee chain coffee (Greenberry's, VA). That's for coffee on the go.
Otherwise, damn I miss the espressos I used to have in real CAFEs in Paris, the real shit, no creamer or any kind of blasphemy, not the crap you get at starbucks. That's dope. Let's no even think of Dunshit. A friend of mine who lives in Philly, he is more of a coffee snob than I am, thought though that Wawa's stuff was decent compared to the rest.
Oh my I miss some Turkish coffee as well. Now I'm going to sip on my cheap Columbian coffee :\, sadness.
Starbucks probably makes little money on their brewed coffee.
Doubt that. How much could a pot of coffee cost them? Figure they buy their beans in super bulk and run tapwater through them.
A pot of coffee probably costs them less than one cup. Sell the cup, you get your cost back... the rest is profit... repeat all day.
@Krowa003: Didn't microbrews (and even Sam Adams) kill the imaginary dragon that is imported beer?
Didn't microbrews (and even Sam Adams) kill the imaginary dragon that is imported beer?
For a while, but then they were resurrected as "Belgians".
@Snarkysnake: See the thing here is, Starbucks NEVER in their entire history of the franchise EVER has had a decent cup of coffee.
NEVER
Maybe they did when they where a few dinky stores in Seattle back in the 80's but thats it.
Their "premium" coffee has been lambasted by coffee conosours and just general coffee drinkers for years, yet they still give the company line of "it's supposed to taste that way."
Their mixed drinks are ok, but even their if you KNOW coffee, you know its crap and they cover up bad pulls and dirty machines with rancid coffee bean oil on them with tons of cream.
So reading his pompous attitude toward companies who for all purposes actually do make better coffee than him just makes him seem like more of a yuppy asshole than their management seemed like before.
I got my dad a bean roaster two Christmases ago. It wasn't an expensive model with many options, but it once you figure out how to use it, you can make a nice cup of coffee. A lot cheaper in the long run, too. Plus it gave my Dad yet another hobby to spend time on during retirement.
When it comes to straight up black coffee, Starbucks is no good. If I have to go to SB, I get an Americano--it tastes slightly less like burnt guano.
McDonalds black coffee has really improved with the new roast. Dunkin Donuts used to be much better, but it seems like a lot of the locations around me are making it weaker than they used to. Burger King is pretty bad.
WaWa 1/2 Columbian 1/2 extreme caffeine mocha
Number of starbucks locations in the city of Boston: 37
Number of Dunkin Donuts locations in the city of Boston: Over 100
Premium goat urine is just that - goat urine.
I appreciate Starbucks, but not for their brewed coffee. With the exception of their Estima blend, I would rather have just about anything else but Starbucks. I suppose that makes me anything but a coffee snob, and says quite a bit about the poor quality of Starbucks' regular coffee. Nonetheless, its crafted beverages are pretty good, and their prices are competitive with independent cafes. Their mochas, lattes, and seasonal drinks are staples for me. Howard Schultz is partially right. Starbucks is known for its premium espresso beverages, which I would be deathly afraid to try at McDonald's or any other fast-food chain. That being said, I find Starbuck's Estima blend drinkable. I'm afraid to try their new Pike Place blend, since I have a nut allergy.
McDonalds coffee tastes better than Starbacks these days. But I'll still stick to my Tim Hortons.
@failurate:
I think only people who only drink terrible beer still break beer down into "imported" and "domestic" as the two main categories. There is tons of wonderful American beer now.
@bdsakx: It makes me sad that people get so wrapped up in the Starbucks bashing that it wasn't until halfway through the thread that someone pointed out that little piece of stupidity.
It just goes to show you how subjective the taste of coffee is. One person's gold is another person's crap.
A Consumer Reports review on coffee taste is stupid. The consistency of brew is different in every McDonalds, as well as every Dunkin Donuts. At least DD sells so much coffee, that it doesn't sit there for 5 hours like the coffee at McDonalds can.
If the brew tasted the same all the time at each of these places, the taste results would still be subjective.
I don't believe that McD's sells premium coffee. They don't sell premium anything. They sell fast and cheap. They specialize in burgers, and does anyone believe they get a premium burger there? At least DD roasts their own beans, and their taste is pretty consistent (whether you like it or not). They spent years trying to perfect just one flavor of coffee. Coffee is their thing, and I think they've made an effort to sell a premium product.
On the other hand, just what is the Starbuck's CEO supposed to say? Should he say - "Yes, we all sell premium coffee, but ours cost more money and taste burnt"?
@COELACANTH:
Without exception to location, Starbucks pulls one of the worst shots of espresso I've had--and all the Starbucks stores are now using superauto machines so there is no 'operator' effect. There is nothing "premium" about their espresso drinks since the core component--the espresso--is horrid. They seem to be fooling you and many others by covering it up with syrup and milk and then charging you upwards of $5 for it
@Falconfire:
"See the thing here is, Starbucks NEVER in their entire history of the franchise EVER has had a decent cup of coffee.
NEVER"
Okay. Educate me. (For the record,I grind and brew my own).
Why are people mobbing these stores when they open if they have NEVER made a decent cup of coffee ? Why are they able to take this concept worldwide if they basically do a piss poor job ? I don't get it. Not flaming here-just genuinely curious how they can succeed when they can't do the basics...
How lucky am I to live in Chicago - the home of Intelligentsia AND the only location of Julius Meinl in the entire United States. In my neighborhood. Oh yes.
@Snarkysnake: Addiction? Both chemical and social?
@bdsakx: Top notes are the aromas you taste (actually, you smell them) when you first eat or drink something. They are your first impression. A lack of top notes means either the coffee used for brewing was old, or the coffee in the pot had been sitting too long. It may sound affected to you, but there is a sort of art & science to tasting.
Since we're all riffing on our coffee opinions here, I'll add my own. I discovered that latin coffee brands, usually espresso ground, make great coffee. My favorite brands are La Llave and Yocono, and they're priced about the same as regular grocery coffee brands--$3 a package. You might be able to find them in a local grocery or ethnic market. If not, they can be ordered online. I'm too lazy to grind my own beans--it has to taste decent out of the bag.
As somebody else said, Peet's is great coffee, but rather hard to find, and expensive to order. Dunkin Donuts is good, and they have always paid attention to how they make coffee--measuring the coffee, checking water temps, making it fresh after a certain period. After many years, a couple months ago I had a cup of DD, and was surprised at how good it was.
@Daniels: When I was in hotel management school, I did a cost analysis of our coffee--basically supplies and labor. It came to about 2¼¢ a cup. This was in 1990. Even if you quintuple that, you can see that selling cups of coffee is a great way to make money. You may think you're getting ripped off. But you have to consider that a coffee shop has to pay the bills selling cups of coffee, one at a time, so a high markup is necessary for a cafe.
@thirdbase:
Speak for yourself. I've been in a Starbuck once, and that was because I wanted tea.