After Coffee Taster reported Starbucks plans to open 150 new stores in Europe, a number of Italian readers wrote to us to know how they can open and run a Starbucks shop in Italy. Coffee Taster asked the question to Mrs Bridget Baker, Starbucks spokeswoman.
"Starbucks Coffee Company is excited about the great opportunities that Italy presents to the company. However we do not have announcements to make regarding the Italian market at this time," Mrs Baker told Coffee Taster.
"When we open a new market, we take time to make sure we have the right joint-venture partner or licensee to help develop the brand," Mr Baker said. "As it is very important for us to find a partner with the right business and retail experience, as well as cultural fit for Starbucks, the process can be a long one.  We will open each market when the time is right, one store at a time."

(Carlo Odello)

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Starbucks today announced a strategic licensing partnership to open more than 150 Starbucks stores in prime travel channels in key European markets within the next three years. The agreement details wide-ranging co-operation across the European travel market, covering both airport and railway station locations. Starbucks will give SSP licensing rights to the Starbucks brand in a number of significant markets that in some segments are exclusive, including France, Germany and the United Kingdom.

 (Carlo Odello)

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Howard Schultz, Starbucks CEO, was in Italy with a group of partners to study the coffee market in the country. In the last months he has been working on the repositioning of Starbucks, trying to face the threats coming from aggressive competitors as McDonald’s. Coffee Taster republishes the letter from Howard Schultz.

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Dear Partners,

As I write you this note, I’m flying back to Seattle with a small group of Starbucks partners after spending a few days in Italy. No, we were not there to open our first store in Rome, although I’m quite certain that day will surely come. We were there to conduct a market visit to take in “all things coffee,” and to have strategic discussions with leading food and beverage companies.

We tasted and consumed coffee in every coffee bar we encountered. We saw elegant designs, experienced the artistry of baristas, ate fantastic food, and were introduced to new and interesting product ideas for the future. It was exciting for me to, once again, return to where it all began. The Italian people are wonderful. Their passion for life, their love of food and wine, and their coffee, is contagious.

During our visit, I made the following observations:

The Barista — The Barista is highly trained and very skilled. He presents each cup of espresso with great care and pride after intently watching the pour of the shot. He steams the milk as an artisan to produce a velvety foam, and from time to time, truly elevates his work to “art.”

The Coffee — This will probably surprise you (and hopefully you will not view my assessment as arrogant, but rather as honest), but the coffee was not that good. It turns out that most Italian coffee roasters blend their coffee with robusta beans. This is most likely because of a need for increased profit, but as a result of this decision, much is lost in the cup. The coffee leaves you with a strong, acidic, somewhat sour taste on the side of your tongue. This taste was unpleasant and disagreeable, but prominent in almost all the coffee we tasted.

Despite the change in the taste of the coffee, the experience we had was overwhelmingly positive on both a personal and professional level. We all felt a strong sense of pride in our company and in all of you. For many years now, we have been a respectful inheritor of the Italian coffee culture. We have built our business honoring the very things we saw and experienced. And, in some cases, I am humbled to say, we have improved it.

All of you deliver a world class experience to our customers — one that I believe Italians would praise. We have challenges and opportunities ahead of us, but as long as we embrace our heritage and tradition, have faith in our coffee, our values, and our core purpose, we will continue to win the hearts and minds of our customers. As for the coffee, we never have and never will blend our coffee with robusta beans. We will leave that for others. It is important to note that today; we ethically source higher quality arabica coffee than in any other time in our history. And, in my view, we roast it at a quality level that is better than in the past because of new technology.

So, this trip brought me back to where it all began, but at the same time reinforced how good we are and how far we have come. We learned a lot. And, we will utilize much of this learning to keep pushing for innovation, while at the same time embracing our core, our people, and our coffee. All of which I am proud to say would stand tall even in the greatest coffee theatre of them all.

Thank you for all that you do.

Onward,

Howard

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Launching the next phase of Starbucks ongoing efforts to transform the company and renew its focus on the customer, Starbucks today announced an historic in-store education and training event for its more than 135,000 store partners (employees) across the United States. The company will close each of its nearly 7,100 company-operated stores in the U.S. on Tuesday, February 26 at 5:30 p.m. local time to conduct a nationwide education event, designed to energize partners and transform the customer experience. Stores with evening hours will re-open at 8:30 p.m.

(Carlo Odello)

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by Carlo Odello

Have you ever tried to drop a line to the customer service of the big multinational coffee companies? We have and we have posed them the sort of question that any careful consumer asks himself: how do you check the quality of your product? We found the address of the customer service or, if they did not have one, the name of the most appropriate person on their corporate websites. We wrote to the companies using a private email address and signed the request. We asked them all the same question: which method do you use for measuring the quality of your product?

This is an unnecessary question when it is down to quality in other sectors. It is already a few years since the car manufacturing industry, just to give an example, has started publishing the results of its safety tests and devotes special focus to them when promoting its product. Coffee is a different story: some companies show the plantations in their ads on television and some others take you in paradise. The overall impression is that not all of them are ready to openly deal with the issue of quality. This is, as we shall see, confirmed by our brief, albeit, accurate analysis.

We had three different categories of replies. Four companies - Nespresso, Illy, Diedrich and MacDonald’s – explained to us in sufficient detail how they measure the quality of the finished product. Vague replies category: Starbucks suggested we should visit their corporate website (which was not that useful), Nestlé replied they would have come back to us. Lavazza told us that quality tests take place everyday and that these tests are certified. The other four companies - Tchibo, Sara Lee, Dotour and Segafredo - have not even replied. We have not been able to contact Costa Coffee because there was no useful contact indication for the common consumer on their website.

Here goes what McDonald’s, Diedrich, Illy and Nespresso said. The Italy customer service for McDonald’s ensured that they use “only products and ingredients that match the highest quality standards and that have been officially approved by competent authorities”. They informed us that “the choice is made on organoleptic evaluations – defined by a panel of tasters – representing the average consumer – who has positively rated the current supplier”. Diedrich gave a more detailed reply saying that the coffee samples are tested before purchase and delivery and that they are also subject to a visual evaluation aimed at spotting any defects of the green coffee. Each roasting process is cupped before it goes to packaging. Also Illy provides great details, informing us that they select the coffee batches and then they make an electronic control on the colour of the beans so that they can discard the flawed ones. They also add that, during the production process, 114 checks are made. From Nespresso, we received a reply by their technical & quality manager Alexandre Bolay (perhaps they smelled the rat?). He said that all throughout the production line there are quality inspections and tasting sessions. The daily production is benchmarked against a reference production: blind testing is done and if the correspondence between the sample and the reference product is lower than 60%, corrective measures are applied to the recipe.

These were their replies. Said this, our test was mainly on the external relations of these companies. The interesting thing to note is that from at least two thirds of the companies we had no useful reply. Actually, Tchibo, Sara Lee, Dotour and Segafredo have not replied at all. We thought this was a bit odd given that quality is the battle field of a wealth of marketing and communication initiatives. In particular, Starbucks vague reply comes as a surprise: they said that, due to the volume of queries they receive, they cannot give interviews or reply to requests for data or provide information on the company other than what is already in the public domain. This comes in a moment when Howard Schultz, Starbucks CEO, is fighting against what he defines as a weakening of the Starbucks experience.

In general, talking about the absent companies, and they did this deliberately, we get the impression that their marketing is still based on the assumption that the consumer is passive. They do marketing strongly focusing on promotion rather than information. The point is that now the consumer, when choosing the product, relies on means like other people’s opinion and the Internet which are not that sensitive to the sort of imposition-based marketing style.

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McDonald’s is launching classic coffee bars. They will open at the 14,000 U.S. store and will be more similar to the Italian classic bar with displaying espresso machines and baristas prepare drinks. McDonald’s will add $1 billion to its annual sales. The move aims at contrasting Starbucks. According to a memo sent by Starbucks CEO Howard Schultz in February 2007 a few changes in the theatrics solved a major problem in terms of speed of service and efficiency but removed much of the romance and theatre that was in play. In particular, the height of the new coffee machines would block the visual sight line the customer previously had to watch the drink being made and would jeopardize the intimate experience with the barista.

(Carlo Odello, sources: Reuters, Financial Times)

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