roblumba Senior Member Joined: 30 Jan 2006 Posts: 346 Location: San Jose Expertise: I love coffee
Posted Mon May 5, 2008, 1:21pm Subject: Re: More bad news for $bucks
Eventually, people are going to look at their budget, money going in and out, and make a judgement. And it doesn't help that most people can probably either make coffee at home or get it at work that is reasonably close to the quality you get at $bucks.
On the other hand, if the comparison was being made against a place like Intelligentsia, or my local Barefoot, I would suggest that it would be much harder to dispense of your ritual visit to have excellent coffee. It just so happens that Barefoot coffee roasters is opening a new 4,000 square foot roasterie and training facility. Looks like things are looking good for Barefoot.
I don't think you can read too much into a single quarterly financial report... especially the way that things are going in the economy in general. It takes several quarters to indicate a true downturn that opposes other general economic trends. The CEO even cites the economy in an interview: ""We continue to come under very heavy consumer pressure due to the economy...".
The good news is that Starbucks, after years of senioritis, is finally waking up (and smelling the coffee?) to the competition. Dunkin' Donuts and McDonalds have aggressively been going after their market, people are responding to it, and the slumbering giant is finally getting off its fat butt. Competition is almost certainly a good thing here, although much of the fight will be over who can take the most money from the other guy rather than really providing a good brew.
Beyond the financial downturn, Starbucks has never really been about excellence in coffee. It has always been about taking financial advantage of the attributes a relatively good product, and hyping it up with marketing and cachet and atmosphere; the goal is to give the customer a gourmet feeling rather than a true gourmet product.
We all have to really face up to the fact that most of America is ignorant about what we consider good coffee, and will continue to be so as long as convenience and price outweigh taste and quality. My mom isn't going to start roasting her own coffee very soon, nor will she ever buy a Technivorm nor her own grinder, nor even pay more than $5/lb for pre-ground. And she's not going to be seeking out anything beyond Starbucks when she wants what she has been convinced of as a "true" coffee. In short, there's a market for her, and she buys what they sell. (She'll appreciate my home brew, maybe, but only when I make it for her.)
Like with wine, there are a whole horde of people who wouldn't care about the finer things in coffee even if you gave it to them for free. There will always be those who love Hazelnut Cinnamon Vanilla pre-sweetened non-dairy creamer, regardless of how fine the cup is. They don't want a cup of coffee, they want a warm creamy dessert. The most we can do is to be a group of individually influential people who spread the word, share our passion and craft, and respect where others set their limits. Maybe that will create the demand for the dimensions beyond the Evil Empire. If not, then we can be happy all to ourselves.
Posted Mon May 5, 2008, 7:11pm Subject: Re: More bad news for $bucks
svyerkgeniiy Said:
I don't think you can read too much into a single quarterly financial report... especially the way that things are going in the economy in general. It takes several quarters to indicate a true downturn that opposes other general economic trends. The CEO even cites the economy in an interview: ""We continue to come under very heavy consumer pressure due to the economy...".
The good news is that Starbucks, after years of senioritis, is finally waking up (and smelling the coffee?) to the competition. Dunkin' Donuts and McDonalds have aggressively been going after their market, people are responding to it, and the slumbering giant is finally getting off its fat butt. Competition is almost certainly a good thing here, although much of the fight will be over who can take the most money from the other guy rather than really providing a good brew.
Beyond the financial downturn, Starbucks has never really been about excellence in coffee. It has always been about taking financial advantage of the attributes a relatively good product, and hyping it up with marketing and cachet and atmosphere; the goal is to give the customer a gourmet feeling rather than a true gourmet product.
We all have to really face up to the fact that most of America is ignorant about what we consider good coffee, and will continue to be so as long as convenience and price outweigh taste and quality. My mom isn't going to start roasting her own coffee very soon, nor will she ever buy a Technivorm nor her own grinder, nor even pay more than $5/lb for pre-ground. And she's not going to be seeking out anything beyond Starbucks when she wants what she has been convinced of as a "true" coffee. In short, there's a market for her, and she buys what they sell. (She'll appreciate my home brew, maybe, but only when I make it for her.)
Like with wine, there are a whole horde of people who wouldn't care about the finer things in coffee even if you gave it to them for free. There will always be those who love Hazelnut Cinnamon Vanilla pre-sweetened non-dairy creamer, regardless of how fine the cup is. They don't want a cup of coffee, they want a warm creamy dessert. The most we can do is to be a group of individually influential people who spread the word, share our passion and craft, and respect where others set their limits. Maybe that will create the demand for the dimensions beyond the Evil Empire. If not, then we can be happy all to ourselves.
pstam Senior Member Joined: 27 Jan 2004 Posts: 2,037 Location: Beijing Expertise: Professional
Espresso: ECM, SAN MARCO, EURO 2000 Grinder: MAZZER Vac Pot: YES Drip: YES Roaster: YES, HOME STYLE
Posted Wed May 7, 2008, 1:24pm Subject: Re: More bad news for $bucks
svyerkgeniiy Said:
I don't think you can read too much into a single quarterly financial report... especially the way that things are going in the economy in general. It takes several quarters to indicate a true downturn that opposes other general economic trends. The CEO even cites the economy in an interview: ""We continue to come under very heavy consumer pressure due to the economy...".
The good news is that Starbucks, after years of senioritis, is finally waking up (and smelling the coffee?) to the competition. Dunkin' Donuts and McDonalds have aggressively been going after their market, people are responding to it, and the slumbering giant is finally getting off its fat butt. Competition is almost certainly a good thing here, although much of the fight will be over who can take the most money from the other guy rather than really providing a good brew.
Beyond the financial downturn, Starbucks has never really been about excellence in coffee. It has always been about taking financial advantage of the attributes a relatively good product, and hyping it up with marketing and cachet and atmosphere; the goal is to give the customer a gourmet feeling rather than a true gourmet product.
We all have to really face up to the fact that most of America is ignorant about what we consider good coffee, and will continue to be so as long as convenience and price outweigh taste and quality. My mom isn't going to start roasting her own coffee very soon, nor will she ever buy a Technivorm nor her own grinder, nor even pay more than $5/lb for pre-ground. And she's not going to be seeking out anything beyond Starbucks when she wants what she has been convinced of as a "true" coffee. In short, there's a market for her, and she buys what they sell. (She'll appreciate my home brew, maybe, but only when I make it for her.)
Like with wine, there are a whole horde of people who wouldn't care about the finer things in coffee even if you gave it to them for free. There will always be those who love Hazelnut Cinnamon Vanilla pre-sweetened non-dairy creamer, regardless of how fine the cup is. They don't want a cup of coffee, they want a warm creamy dessert. The most we can do is to be a group of individually influential people who spread the word, share our passion and craft, and respect where others set their limits. Maybe that will create the demand for the dimensions beyond the Evil Empire. If not, then we can be happy all to ourselves.
I have to say that this is a careful and clear analysis of the situation. But, besides that there could be few other possibilities.
As people can find in the map where most well-commented cafes are listed, there are too few of them. We may imagine that people may prefer better coffee, at least it does not cost more. But, where to get it? Not everyone would flight over hundreds miles to get a good shot. Or, in Beijing, few people would take a taxi to go around ten miles just for a good shot, but too few of them.
In fact, I noticed that people won't even cross a road for a better coffee, it might be the roads in China is too busy.
I do feel, and am confident to expect people, even our local people in China, to choose better shots, if it is really tasted good.
So, if you believe that you shots are good, go ahead and to enjoy your succeed in just near future.
Peter in Beijing ------------------- http://kaffacafe.axspace.com/ ------------------- I have got a new website, just started to establish. If you have any question or suggestion, let me know and it is mostly appreciated.
alsterling Senior Member Joined: 28 Dec 2005 Posts: 628 Location: Dana Point, CA Expertise: I live coffee
Espresso: La Spaziale S1 (Had Expo) Grinder: Macap M4 & Gaggia MDF Vac Pot: Not yet... Drip: Capresso MT-500 & Melitta... Roaster: Hottop Digital
Posted Sun May 11, 2008, 12:09pm Subject: Re: More bad news for $bucks
Happy Mother's Day Guys..............interesting comments, that have very weighty indicators for the coffee buying public.
Running a retail food and beverage operation in todays economy, in my opinion, requires more diversification in product than even a year ago. From a hobbyist's point of view, we can obsess over our equipment, supplies and end product. But for businesses who feature coffee, the limited income from coffee is usually not enough. That's why Starbucks diversified. That's why most "espresso shops" might more accurately be called "sandwich, coffee and dessert shops."
In my opinion, the target value price for a "street-side" beverage and food item, for the person on the go, will be around $3-$5. In a down economy, $5 has to represent a high-value food and beverage lunch. I wouldn't focus on the $5 specialty drink anymore. And remember that most "specialty coffee locations" have an ice-maker. Don't forget the growing powdered beverage industry. Gourmet coffee may "get 'em in", but a minimum lunch and dessert menu will bring them back. Look at the price-points for McDonald's and Dunkin's coffee items. They know that what the US public responds to is value. It's not that quality isn't or can't be an issue, it's that you don't harp on quality, because truth be known, we get what we pay for. OK drip brewed coffee at $1 a cup, or a huge cup at $1.99 is more about attracting clients into a location so they'll buy higher margin items..........not coffee.
Just my opinion....... Al
Member No.12047 - SCAA "Space Available Here for Something Really Prolific"
pstam Senior Member Joined: 27 Jan 2004 Posts: 2,037 Location: Beijing Expertise: Professional
Espresso: ECM, SAN MARCO, EURO 2000 Grinder: MAZZER Vac Pot: YES Drip: YES Roaster: YES, HOME STYLE
Posted Sun May 11, 2008, 2:14pm Subject: Re: More bad news for $bucks
Yes, it seems that it is also necessry to calculate the price for the US market, not only China.
Peter in Beijing ------------------- http://kaffacafe.axspace.com/ ------------------- I have got a new website, just started to establish. If you have any question or suggestion, let me know and it is mostly appreciated.
Hello, Peter! No, I am not travelling the World as I once did. After almost 30 years of being gone up to >250 days per year, I now sell cars as a local dealership.
pstam Said:
I do not know what you mean by NASA, is it American Space Administration? But, how it is related to cafes?
Yes, I meant the National Aeronautic & Space Administration...and yes, it has nothing to do with espresso...just as *$s no longer has much to do with espresso.
pstam Said:
Economically, one can calculate how much people would pay for coffee drinks, but the quality of espresso make a big difference. If the espresso is not drinkable, people can only drink others, which cost more. In this case, would people like to drink everyday, or a few cups a day? Finally, it is totally depends on how many people would buy coffee drinks in cafes, or they prefer to make drip coffee at home and offices?
Most *$s visitors (in fact, nearly ALL) do not drink straight espresso. Many folk like *$s' straight drip coffee and can be seen throughout the USA driving in their cars or sitting at their office desks holding a L A R G E cup of 20oz. or more of *$s drip coffee.
pstam Said:
How much does espresso cost in US? One buck, or more? And, how is cappuccino and caffe latte?
Here is a PDF of a *$s menu I just found on the internet. The phone number indicates that it is located in or near Midland, Texas though I do not know how old the prices are, i.e. they may NOT be current.
pstam Senior Member Joined: 27 Jan 2004 Posts: 2,037 Location: Beijing Expertise: Professional
Espresso: ECM, SAN MARCO, EURO 2000 Grinder: MAZZER Vac Pot: YES Drip: YES Roaster: YES, HOME STYLE
Posted Tue May 20, 2008, 7:44am Subject: Re: More bad news for $bucks
Thank you, Len, and it is very helpful.
Peter in Beijing ------------------- http://kaffacafe.axspace.com/ ------------------- I have got a new website, just started to establish. If you have any question or suggestion, let me know and it is mostly appreciated.
alsterling Senior Member Joined: 28 Dec 2005 Posts: 628 Location: Dana Point, CA Expertise: I live coffee
Espresso: La Spaziale S1 (Had Expo) Grinder: Macap M4 & Gaggia MDF Vac Pot: Not yet... Drip: Capresso MT-500 & Melitta... Roaster: Hottop Digital
Posted Tue May 20, 2008, 8:35am Subject: Re: More bad news for $bucks
Len........Big Hello from SoCal
BTW, I had to change laptops a couple months back, in fact during the sales meeting trip when we got together, and I've again lost your contact info! Please resend (alsterling@earthlink.net) I sincerely hope things are going OK for you and yours. I'm still digesting that Primanti sandwich!
For me, an interesting observation on TV is the positioning of "empty 12-20 ounce coffee cups in the hands of all those actors in the cop dramas! Boy, has our culture been affected by Starbucks.......although the cups are those "Magna Carta with 3 masted saling ship" designs from Smart and Final.
You're so right Len. Starbucks should be discussed in marketing circles, not espresso circles. It isn't about specialty coffee anymore. I'm working on a large order for a major fast food company. I'm getting a little inside look at their operation, and unlike Dunkin' and McDonalds, while they have added a "featured drip coffee" to their menu, they evidently aren't making a big issue about it. I think it's their way of accomodating the market. They're still pushing their sandwiches, which are the big draw. And for me, that's of greater interest than the coffee wars. The fight for "best drip and specialty coffee drinks" in the fast food sector was inevitable. I don't think anyone will actually win, as it seems to be ending up as a "price per gallon" issue, rather than a true search for best quality. I'm more interested in the iced drinks for summer that will be the featured items, along with specialty sandwich items on the menu.
I'd repeat; I'd keep an eye on the iced drink side of fast food menus. That will be the growing market share as the coffee wars subside.
Best, Al
Member No.12047 - SCAA "Space Available Here for Something Really Prolific"
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