Make no mistake. It's not about 'feeling good' about Starbucks. At least, not in any simplistic sense.
It's pure business.
In the same week that Starbucks Chairman and pioneering brand-builder Howard Schultz was (re)appointed by the Starbucks board to the instantly-vacated chief executive position, McDonald's announced their intention to expand coffee service in McDonald's restaurants and add barista positions.
Which came first?
On January 7, 2008, making a conscious decision to slow U.S. growth in order to refocus the customer experience, Howard Schultz announced an agenda committed to "re-igniting the emotional attachment with customers and restoring the connections customers have with Starbucks coffee, people, brand and store."
In a letter to customers on the home page of the Starbucks website, Howard Schultz says:
"Twenty-five years ago, I walked into Starbucks first store and I fell in love -- with the coffee I tasted, with the passion of the people working there, and with how it looked, smelled and felt. From that day, I had a vision that a store can offer a welcoming experience for customers, be part of their community, and become a "third place" that is part of their lives every day -- and that it can provide a truly superior cup of coffee."
Later in the letter, he promises a new Starbucks, which is actually the old Starbucks, re-envisioned and renewed. But the last phrase of his comment is critically important. If McDonald's, somehow, can provide a very good cup of coffee, perhaps at a lower price, then Starbucks faces a very serious threat.
The departing Starbucks chief was given great kudos for his business and operational management. But clearly Howard Schultz and the board felt more must be done to buttress Starbucks against McDonald's, particularly if McDonald's finds a coffee recipe that works and can also find the raw ingredients to make their expansion possible.
One of the big problems is the world's supply of quality Arabica beans.
Earlier this year, Howard Schultz defined his priorities as securing the world's best supply of the best beans by working with the best growers in the best way. That's great.
But perhaps we see there an inkling of other objectives -- to protect Starbucks, of course. To honor growers, naturally. But above all, to defend against the Golden Arches.
Obviously, that's the priority.
We salute Mr. Schultz for rebuilding coffee as the American beverage.
For years the folks at Maxwell House, we know, felt coffee had ceded ground to Coca-Cola as "the national beverage." But Starbucks ignored everything and actually changed how we think about coffee.
Thanks to Starbucks, we have a different idea in our minds about what coffee is.
Now Howard Schultz is determined to protect that idea and defend it against allcomers, including the greatest potential threat on the planet, Mickey D.
His offense and his defense?
The Starbucks brand, and the Starbucks experience.
It will be a great encounter.
