Starbucks: The Brand Risk

What did we ever do without smoothies?


Kudos to companies like Jamba Juice for really pushing a product category that is now being adopted almost universally. McDonald’s, the big dog in the fast food category, has identified beverages as a ‘growth engine.’(Other growth engines are breakfast, chicken and 24 hour convenience.)


Indeed ,the vision for the Golden Arches is that McDonald’s will become a ‘beverage destination’ in this $60b category. The chain believes it can grow average sales by $125,000 per restaurant, which if it happens would generate about 5% incremental sales growth. Whether the hamburger giant can achieve the beverage destination goal and provide good quality smoothies without slowing the experience is open to question but given how successful it has been in general since the late Jim Cantalupo took the hot seat in 2003, I wouldn’t bet against them.


Now we have our Seattle buddies Starbucks getting in on the smoothie act “raising the bar on good nutrition with the introduction of Vivanno™ Nourishing Blends.” It is an obvious move given the Starbucks demographics and the growth in this sector. Vivanno and similar products from Jamba Juice are a meal in themselves, thus this might help Starbucks to grow its breakfast business.


The only caveat I have with this introduction is that like it or not, it moves Starbucks further away from its coffee house tradition. That is the brand risk which Starbucks is taking, something which - if it happens, may not be visible for quite some time. The right thing for sales growth may not be the right thing for Brand Integrity. For instance, an argument could be made that the drive-thru at Starbucks takes from the 'Third Place' experience the company has been so proud of.



Posted by Conor Cunneen who is a humorous keynote business speaker on Marketing, Business Growth and Branding. Conor is an Irishman, happily exiled in Naperville, IL where he says the Guinness is drinkable (now there is a Brand) and the natives are friendly.
http://www.irishmanspeaks.com/