Will Starbucks' instant coffee Via prove to be a weak brew or caffeine kick?

LONDON - Will Starbucks' instant coffee launch dilute the brand or shake up the sector?

At first glance, Starbucks' decision to launch its first instant coffee product, Via Ready Brew, is, frankly, illogical.

Much like Marks & Spencer's ill-advised jam-sandwich nostalgia trip, it smacks of introducing a lower-quality product in the quest for a quick buck.

Starbucks, which launched Via in the US last month and is trialling it in a handful of London outlets, priced £1.20 for three servings and £3.95 for 12 servings, claims the product is 20 years in the making. Chief executive Harold Schultz promises to 'reinvent' the instant coffee sector, as well as expanding the chain's target audience.

However, with the brand posting its first quarterly loss last year, and planning to close about 1000 outlets worldwide, an industry report by Mintel suggests the launch is aimed squarely at reconnecting with consumers who are not willing to splash out on a trip to a coffee shop, thereby putting the Starbucks brand directly into people's homes.

Debbie Smith, managing director at ad agency Meteorite, which works with rival brand Costa, is scathing about the project, claiming it is at odds with Starbucks' core positioning.

'It's a mistake. It could end up seriously diluting its brand,' she says. 'Starbucks as a quality coffee store has undergone something of a crisis of confidence recently. It has gone from niche to mass in a short space of time and lost touch with its roots.'

Jim Slater, Costa's marketing director, is adamant that it has 'no intention' of launching an instant coffee product, which he describes as 'anathema' to its brand proposition.

Not everyone is so disparaging, though. Consumers are bombarded with messages from the coffee sector covering everything from Fairtrade to the latest home espresso pod, so a retail brand like Starbucks stands to achieve huge cut-through with its new product in a sector where premium is the growth area. Sales in the coffee market have risen 19% since 2002 to reach £720m in 2007, driven largely by a 65% rise in roast and ground coffee sales.

According to Mintel analyst Michelle Strutton, Starbucks may be about to usher in another category in the coffee sector. 'Now is the perfect time for Starbucks to launch Via,' she says. 'It will be going into the premium end of the market, and it may even carve out a new super-premium niche. All of the brand leaders will need to take note.'

Andrew Doyle, chairman of branding agency Holmes & Marchant, which has worked on Kraft-owned instant coffee brand Kenco, believes Starbucks will cause the major players in the sector a few awkward moments.

'This could well force the big brands to up their game, to invest in quality and taste, not just communications,' he says. 'The entrenched brands have too much to lose not to respond, but they are oil tankers and take a while to turn, so Starbucks could well have a great short-term harvest.'

Doyle is particularly keen on the fact that Starbucks is making the product available only in its coffee shops. 'There are 54 varieties of instant coffee in Waitrose and adding another would have been nuts,' he continues. 'This way Starbucks can stop consumers from being promiscuous.'

However, one factor Doyle may have failed to take into account is that Starbucks already sells its whole-bean coffee products through conventional retailers. Moreoever, a company spokeswoman would not rule out the possibility that Via may eventually go head-to-head with Nescafe and others on the supermarket shelf.

The next point of interest in the battle for consumers' coffee mugs will be to see how quickly instant coffee brands at the upper end of the market, such as Kenco and Lavazza, will react, as they cannot afford to let Starbucks cream off the top-end without a challenge.


Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now


Leaked document shows Nokia to be rebranded as Microsoft Mobile
Nike lays-off hardware staff in move that casts doubt on future of FuelBand
Greenpeace says save the bees or humans will die
What brands need to know about changes to VAT and online downloads in 2015
Jimmy Savile victims urged to claim compensation in new ad campaign
UKIP launches biggest  ad campaign and stirs up 'racist' accusations
Apple boss Tim Cook provides voiceover on ad touting firm's renewed green commitments
John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Toyota achieves the impossible by calming angry Roman drivers
Tom of Finland's 'homoerotic' drawings made into stamps
YouTube reveals user habits to appeal to 'older' marketers
Ex-M&S marketing chief Steven Sharp consulting at WPP
Wolff Olins reveals new CEO after Apple poaches Karl Heiselman
Glasgow offers £30,000 prize to best digital idea for 2014 Commonwealth Games
Google's revenues surge but shares drop as it grapples with transition to mobile
Facebook beats Twitter to most 'marketing friendly' social media site crown, says DMA
Fableists believe children like Finn should be outdoors enjoying life
Homebase, Baileys and Camelot join the line-up at Media360
MasterCard renews Rugby World Cup sponsorship to push cashless message
Lynx unleashes £9m 'Peace invasion' campaign
Social Brands 100 Youth: Pizza Hut most social youth brand in UK
Cheryl Cole is wild and arresting in new L'Oreal work
Morrisons told not to show alcohol ads during YouTube nursery rhymes
O2 head of brand Shadi Halliwell departs after 23 years at company in restructure
Tesco hit by further sales decline as it turns to digital Clubcard and social network
Branding guru Wally Olins dies aged 83
Duracell short film captures epic Transatlantic voyage