Starbucks has found a new way to take on local, independent coffeehouses: Step up its focus on “small-batch” specialty coffees.
The company announced plans Friday to open a new “Starbucks Reserve Roastery and Tasting Room” in Seattle that will allow the coffee giant to expand its line of higher-priced, small-batch Starbucks Reserve coffee line. The Reserve line will eventually be in 1,500 locations worldwide—nearly double the number it’s in today—and be featured in at least 100 new cafes that Starbucks plans to open in coming months.
"The Starbucks Reserve Roastery and Tasting room is a multi-sensory experience that will transform the future of specialty coffee,” said Starbucks CEO Howard Schultz in a company news release. “We plan to take this super premium experience to cities around the world, elevating the Starbucks experience not only through these stores but across our entire business.”
For independent coffeehouses, Starbucks’ new focus on high-end coffee may feel rather menacing. Many local coffee cafes have tried to fend off competition from big coffee chains, particularly Starbucks, by roasting small-batch specialty blend coffee.
While many coffee enthusiasts may still prefer the vibe of their local coffee shop (and simply want to support local independent businesses), coffeehouse owners may need to rethink how they differentiate themselves now that Starbucks is encroaching on their turf:
Create even stronger loyalty programs. Loyalty programs that keep regular customers happy by providing them with nice discounts (free coffee, perhaps?) can help independents fend off competition from big chains. Such loyalty programs should be coupled with other efforts to keep regulars connected to the business through email, social media and special events. In Washington D.C. earlier this year, several independent coffee shops even banded together and created a “disloyalty” program, in which it rewarded locals for visiting several different cafes.
Design a cozier, unique feel. Every Starbucks around the world has the same look and feel—as big brands are all about consistency and replication. Independents should take advantage of their ability to create a homier environment, says Peter Baskerville, who has opened more than 20 coffeehouses in Australia. “Promote a warm, welcoming and friendly environment rather than copy Starbucks' style of self-promoting visuals, structural sameness, and regimented layouts,” Baskerville writes in a column on Slate.com about how the Australian market has managed to maintain a large number of independent coffeehouses despite Starbucks’ competition. He adds: “Make them feel like it's a ‘home away from home’ in your cafe with interesting and changing visuals, a variety of seating arrangements, and let the customer alter the furniture to suit themselves.”
Focus on espresso and other Italian coffee drinks. Starbucks may be upping the ante when it comes to brewed coffee, but they still don’t have a stronghold on espresso and other traditional Italian coffee drinks, Baskerville says. He says independents can beat Starbucks for that business by focusing on brewing excellent higher-end drinks like espresso, cappuccino and lattes—and that’s why, he says, Starbucks has yet to penetrate the Italian coffeehouse market. He writes:
Without being snobbish, Starbucks espresso just does not reach the benchmark required of fine Italian espresso coffee. Just ask an Italian who has tried Starbucks! Unlike Starbucks, Italians don't need to add syrups or special sweeteners to their coffee to make it taste good.
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