Just add hot water: Starbucks to sell instant coffee
Last Updated: Wednesday, February 18, 2009 | 12:58 PM ET
CBC News
Starbucks Corp. has announced that it will sell instant coffee in packages of three for $2.95 US — or just under a buck a cup.
The new product, according Starbucks CEO Howard Schultz, is a bid to bring "quality coffee" to the mass market and to consumers who want only a single quick serving instead of a full brewed pot.
Schultz said Tuesday that the gourmet coffee company will market its new instant coffee under the name "Starbucks VIA Ready Brew," or VIA.
"This is not your mother's instant coffee," Schultz told reporters in New York.
Customers will be able to buy the new instant coffee at 211 Starbucks stores in Seattle, 349 stores in Illinois and 32 stores in London, England, as of March 3.
It will be available across the U.S. in the fall and can already be ordered online. Online orders will be shipped out beginning in March.
'Big move'
The company said the product is being introduced to various markets in stages. It is not known when it will be available in Canada.
The instant coffee, made by adding hot water in a cup, will be available only in Colombia and Italian Roast varieties at first.
In a news release, Schultz said: "This is a big move for us — the opportunity to reinvent a category, create new rituals and grow our customer base is substantial."
But the company noted that instant coffee has never really been associated with high-quality premium coffee.
The news release quotes John Quelch, a professor at the Harvard Business School in Boston, as saying: "Instant, soluble coffee has long been the unspeakable wasteland of the coffee business. Conventional wisdom would be that no premium brand should go near it."
But Quelch adds that Starbucks is going to "redefine and re-energize the instant coffee subcategory."
Move a 'short-term approach to long-term' problem
Quelch says the instant coffee will allow Starbucks coffee drinkers "to stretch their dollars," while consumers of other brands will be given "an affordable entry point into the Starbucks world." After one cup, he believes, they might just want to head to a Starbucks store.
Critics told the Associated Press that they are surprised by the move because Starbucks has been closing stores in the U.S. and overseas, and plans to cut nearly 1,700 jobs.
Andrew Hetzel, founder of the coffee consulting group Cafemakers, said the instant coffee product offering might undermine the reputation that Starbucks has built as a leader in the gourmet coffee business.
"I see it as being a very short-term approach to a long-term brand problem," Hetzel said. "To me it looks like a big gamble. They're throwing things out there to see what hits."
The Starbucks instant coffee will also be sold in boxes of 12 packets for $9.95 US.
Starbucks has 1,001 licensed and company-operated stores in Canada.
With files from the Associated Press
