Thursday, January 24, 2008

The Coffee Addiction: Starbucks And The $20,000 Cup Of Coffee!

Are we in a recession? Now here's a trick. Get everyone thinking your company is being damaged by a recession, especially your new lower-income, striking writers customer group? If you've got all that and a falling stock, you must be Starbucks. Now I love Starbucks. Heck, I got over $300 in gift cards this Christmas! And now look at this new marketing idea being tested in Seattle...the dollar cup of coffee. Long an item found only on the "secret menu" (but for more than a buck), a short (or shall we say sipper eight ounce) it comes with free refills on all sizes of brewed coffee. Is it a smart move?

In a world where even the old-timers have stopped complaining about overpriced cups of coffee, showing up with a very low-priced entry level for a regular-sized dose of caffeine makes sense. Why not see McDonald's dollar menu, and raise Starbucks' own version? It's certain that the company won't lose money on the product; costs for traditional brewed coffee are the lowest of the bunch, and baristas often throw away large quantities of coffee because it's was brewed 6 hours ago. Is my favorite coffee company thinking outside-of-the-cup. With increasing competition Dunkin' Donuts, McDonald's and 7-11, it seems that Starbucks has no choice.

Now here's a little secret. Starbucks doesn't want you to know this but they will serve you a better, stronger cappuccino if you want one, and they will charge you less for it. Ask for it in any Starbucks and the barista will comply without batting an eye. The puzzle is to work out why. The drink in question is the elusive "short cappuccino", at 8 ounces, a third smaller than the smallest size on the official menu, the "tall." The short cappuccino has the same amount of espresso as the 12-ounce tall, meaning a bolder coffee taste, and also a better one. But why does this cheaper, better drink—along with its sisters, the short latte and the short coffee—languish unadvertised? The official line from Starbucks is that there is no room on the menu board. If you'd like a better coffee for less, just ask.

And speaking of coffee, you could just make a super expensive cup at home but you wouldn't get the flavor of the smelly homeless guy waiting in line and then stealing 6 cups to fill with non-fat milk and stealing about 25 Equal packets. By chance, or a tweak in the universe, the same day Starbucks testing a $1 cup of coffee, there was a debut of a $20,000 halogen-powered coffee maker –- described as looking like a “19th-century vision of the future.” With its brass-trimmed halogen heating elements, glass globes and bamboo paddles, this new contraption that is to begin making coffee this week looks like a machine from a Jules Verne novel, a 19th-century vision of the future. Called a siphon bar, it was imported from Japan at a total cost of more than $20,000. The cafe has the only halogen-powered model in the United States and professionals have long been willing to pay prices in the five figures for the perfect espresso machine, but the siphon bar does not make espresso. It makes brewed coffee! With recent advances in coffee-making technology, “now you can get perfect extraction.” Yeah, right. From your wallet I suppose! It's coffee people, not a BMW!

The bottom line is this. You can still score a free cup of dark roast from Dunkin Donuts stores on Mondays. The significance of all this latte-faire is that Starbucks is drawing competition from cheap McDonald and Dunkin’ coffees and that $20,000 Japanese (of course) coffee machine supposedly represents a resurgence in interest in brewed coffee among coffee mavens. Question? If, in Starbucks speak, a small is a “Tall,” and the new $1 cup is indeed shorter than the mysterious Starbucks “Short” cup, what is an even smaller cup called? I think they should call it the "weenie." That way we could have a good laugh about it. "Hey...can I get a little foam on my weenie?"