Love and Hate: The Starbucks Effect on Coffee Consumption

Heard from a couple of you about my last post, in which I attributed a rise in Chinese coffee consumption to the presence of Starbucks. Thanks for the feedback! But, please, don't assume I love Starbucks. I'm just giving a bit of credit where credit is due.

The Love and the Hate
Let's be clear: Local cafes with accomplished baristas serving locally roasted and Fair Trade coffees rule. Compared to a real pull of espresso from an indie coffee house like Pikes Perk, Starbucks drools an overly bubbled milk foam of drool.

Though I question aspects of the Starbucks business model, I do salute them for pledging to double their Fair Trade coffee purchases to 40 million pounds in 2009. This is a victory for Fair Trade, but even with the increase, Fair Trade will comprise but a sliver of the Starbucks coffe pie at 3.7%.

Starbucks, like Walmart, is a big player. So, whether we like it or not, what they do matters. Today's announcement of deep Starbucks job cuts suggests economic recession is meeting up with trends like DIY espresso at home:

Starbucks plans to close 300 stores, including 200 in the United States, and eliminate about 6,000 store jobs. The company also plans to eliminate about 700 corporate jobs, including about 350 at its corporate headquarters in Seattle.

Ouch.

I think we all love and hate big players. Starbucks is a worldwide coffee giant that does promise a consistent (if bland and overroasted) espresso. They offer a 100% Fair Trade roaster like us a big corporate foil against which we can hone our message and mission. (Love to hate them!) In spending the marketing dollars to raise coffee awareness and appreciation in undeveloped coffee markets, they help the rest of the coffee industry grow. Like, for example, the way that Starbucks is boosting latte quaffing in Tea Capital of the World, China.

Coffee Consumption Grows in China

Though tea in all its forms may be the traditional caffeine source of Chinese beverage drinkers, coffee is gaining an audience as China adopts western consumption trends.

Thank you, Starbucks
Starbucks has worked hard to entice Chinese consumers with the lure of coffee culture. In 10 years, the company has built 44 stores in Beijing alone. To celebrate their 10 year anniversary in china, Starbucks released a Yunnan province coffee blend available only in mainland China, Malaysia, and Singapore. From ShanghaiDail.com:

The world's biggest coffee chain announced the launch of Starbucks "South of the Clouds Blend," containing coffee beans from Yunnan, which is the company's first offering using coffee grown by farmers in China. The name has been chosen to honor its birthplace of Yunnan, which means "south of the clouds" in Chinese.

How does Chinese coffee compare?
Early today, I wondered aloud on Twitter what Chinese coffee tastes like. Roast Magaine describes Yunnan coffee as "a light to medium body and a light to medium acidity, similar to a wet-processed South American coffee. Moreover, says Stuart Eunson, managing director of Arabica Coffee Roasters in Beijing, China, the coffee “More and more people are beginning to drink coffee, and in the major cities, people are learning about higher-quality fresh coffee from café chains like Starbucks.” So again, we have the Starbucks marketing machine to thank for nurturing budding Chinese coffee connoisseurs.

Why grab coffee and run when you can sit on a moon cusion and nosh on something tasty?
A cultural trend that altered the typical GrabNGo Starbucks model among Chinese Starbucks is that, in China: coffee does not work without grub. This plays perfectly into (Starbucks CEO) Herr Howard Schultz's idea of the "third place"--Starbucks as a home away from home. NPR reported last week that Starbucks sales are still "piping hot" despite an economy that is slowing.

Still, for those coffee drinkers who don't want to lounge in their local Starbucks, one of the convenient things about living in China is the relatively low cost of courier services, so Chinese residents can get coffee delivered to their own doors for practically nothing.