The great coffee wars continue...

Click on the orange link below to read this great article from Michael Bauer's "Between Meals" column in the San Francisco Chronicle. McCafe, anyone?

http://tinyurl.com/mw7jbr

McDonald's Begins Its Shelling of Starbucks...

Thanks to Jolene for finding this and posting it on her blog site. I hope she doesn't mind this co-post, as this intriguing article - click on the orange link below to read it - should be published just about everywhere.

A few quick notes... I disagree with the columnist's conclusion here; I do believe that $100 million in advertising by the Golden Arches will hurt the Bucks. Also, I think they should have called their new shops McCoffee.

I further feel it's worth mentioning that Starbucks was once far ahead of its second and third-tier competitors - like Peets and Sacramento-based Java City - but it has now been caught and surpassed in terms of the "total customer experience." (That experience should include excellent service.) Perhaps more importantly, these competitors are now providing what many see as a better product, a better cup of bold coffee.

Note that Peets, for example, does not compete with the Bucks on price. A small cup of Peets coffee costs 15 cents more than it does at S-B. For those serious coffee drinkers who think they're getting a better brew for just three nickels, its a very small price to pay.

Selling coffee becomes diacritical for McDonald's - Los Angeles Times

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Photo: flickr (turtlemom4bacon)

Some Tough Words for Starbucks...

This is an abridged version of an article ("More Bad News for Starbucks as McCafe Moves in For the Kill") printed on the BNET Industries website; BNET Food subcategory. The original article was posted on the morning of April 20, 2009 and was written by Katherine Glover.

Months ago, this same publication had high hopes for a Starbucks revival based on the return of CEO Howard Schultz. Now the view is not so optimistic...

Things are not looking good for Starbucks. McCafe's continue to spread - almost 70 percent of McDonald's outlets now offer specialty coffee, and the Chicago Tribune has reason to believe that McDonald's will launch a national advertising campaign for its coffee starting in May.

"McCafe is a game-changer in coffee," a Deutsche Bank analyst wrote in a recent memo to clients. "We expect McDonald's will extract a significant toll on Starbucks' performance, beginning this summer..." Deutsche Bank has downgraded Starbucks stock to "sell." And as McCafe expands its reach, Starbucks is moving in the opposite direction, closing 200 U.S. stores this year.

But the problem isn't just that McDonald's offers cheaper coffee than Starbucks. The problem is that Starbucks doesn't necessarily have anything to offer for its higher prices. The Starbucks phenomenon itself led to higher standards, and, as a result, more cheap coffee options that don't necessarily taste like dirt water.

QSR Web recently did its own blind taste test and found that a majority of its testers actually preferred McDonald's coffee drinks to Starbucks. So the question is not "Are customers willing to pay more for a better drink?" but "Is the drink really even better."

Photo: flickr

Note: For even more Starbucks-related updates, see http://twitter.com/Melody206

Boiling over...

One additional comment about the dreaded Pike Place Roast (PPR) from Starbucks. Other commentators have compared the taste of PPR to the instant Hills Brothers or Folger's coffee that you can make for yourself - cheaply - at home. It is hardly gourmet coffee.

So the question arises, if Starbucks is going to offer its clientele a second or third-rate coffee, why not sell it at a discount? A "tall" (small) cup of PPR should sell for no more than 99 cents if the 'bucks wants to compete with McDonald's.

Has anyone in Seattle noticed that there's a recession on?