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March 07, 2007

Solving Starbucks Problems : LOSS OF COFFEE AROMA


This post continues the series where Paul Williams and I, two former Starbucks marketers, offer recommended changes based upon Howard Schultz's email to the Starbucks leadership team.
Loss_of_coffee_aroma
"I believe we overlooked the cause and the affect of flavor lock in our stores. We achieved fresh roasted bagged coffee, but at what cost? The loss of aroma -- perhaps the most powerful non-verbal signal we had in our stores; the loss of our people scooping fresh coffee from the bins and grinding it fresh in front of the customer, and once again stripping the store of tradition and our heritage?" -- Howard Schultz email

Howard's right. The aroma of coffee no longer wafts through Starbucks stores like it used to. Operational efficiencies have eliminated numerous ways the smell of coffee used to permeate throughout every Starbucks.

Over the years, Starbucks has introduced many streamlined operational upgrades that, when combined together, have resulted in stores no longer smelling of coffee. For example:

• The introduction of pre-packaged ground coffee to brew C.O.D. (coffee of the day) eliminated the need to grind pounds upon pounds of whole bean coffee in-store every day.
• The introduction of powdered coffee to the Frappuccino pre-mix eliminated the need to grind and brew double-strength Italian Roast coffee in-stores every day.
• The introduction of automated espresso machines eliminated the need to dump the expensed "coffee cookie" grounds from the La Marzocco portafilter after every use.
• The introduction of automated espresso machines also meant the elimination of "open-air" Coffee Grinders used to grind Espresso Roast coffee for every espresso beverage made. (Note: current automated machines grind coffee for every espresso shot but the coffee aroma from grinding remains trapped inside the machine.)

Every one of these "inefficient" activities resulted in producing coffee aroma. Without these activities, which all required grinding of whole bean coffee to be done in every Starbucks store, it's no wonder Starbucks stores no longer smell like coffee.

In Howard's battle cry email, he singles out the decision to use FlavorLock packaging as the thief that's stolen the coffee aroma from every Starbucks store. NOT TRUE! Just because FlavorLock's fingerprints are everywhere coffee is within Starbucks, doesn't mean FlavorLock packaging is guilty for stealing the aroma of coffee. FlavorLock is innocent until proven guilty. And as FlavorLock's blog-appointed lawyer, I am going to prove FlavorLock's innocence.

So we all understand, FlavorLock refers to the packaging Starbucks uses to store its roasted whole bean coffee in. In the simplest of terms, FlavorLock packaging allows roasted coffee beans to retain its freshness for months after the coffee has been roasted. This ability to maintain freshness allows Starbucks to ship fresh-roasted coffee beans to its stores all over the world.

Flavorlock

In more complex terms, FlavorLock packaging protects roasted coffee beans from being exposed to oxygen. FlavorLock is basically a one-way valve (click the above image to view the valve upclose) which allows roasted whole bean coffee to release carbon dioxide, but not to intake oxygen. No exposure to oxygen is important to roasted coffee because when coffee is exposed to oxygen, it quickly becomes stale. So, FlavorLock locks in the coffee's freshness protecting it from the dangers of oxygen.

More than anything else, FlavorLock packaging has enabled Starbucks to become a global brand. Without FlavorLock, Starbucks wouldn't be able to ship fresh-roasted coffee around the world and thus, Starbucks would be a considerably smaller company today.

Much more damaging to the loss of coffee aroma in Starbucks stores, than is FlavorLock packaging, are the operational efficiencies I outlined above. All of those activities have helped to increase store-level efficiencies resulting in higher profitability for the company ... but ... they have all contributed mightily to the loss of coffee aroma in every Starbucks location.

Your honor, please exonerate FlavorLock from Howard's malicious accusations. FlavorLock packaging is not guilty as Howard charges. Other operational efficiencies are much more responsible for the loss of coffee aroma in Starbucks stores.

Enough talk about the problem. Let's talk solutions.

In his email, Howard suggests stores should go back to storing whole bean coffee in bins behind the counter as well as scooping/bagging beans on-demand for customers. I'm not convinced those two action items really solve the problem of bringing the aroma of coffee back to Starbucks stores. There are better options.

My recommendation is for Starbucks to find ways to grind whole bean coffee more often in-store.

Instead of having pre-packaged C.O.D (coffee of the day) ground coffee from which to brew, Starbucks should strongly consider developing new drip coffee brewers. Develop an all-in-one gargantuan industrial-sized version of the home coffee brewer that grinds beans and brews coffee.

Another inefficient, albeit effective, solution is to go old-school and have each store grind their COD in-house just like they used to. Costly labor-wise but effective coffee aroma-wise.

But the easiest quick-fix to solving the coffee aroma issue is to make it mandatory for every Starbucks to package its spent coffee grounds in bags and place them in a wicker basket somewhere in the store. It’s a best practice within Starbucks that stores package its spent coffee grounds in large bags for local gardeners to use in their compost piles (usually coinciding with Earth Day). Starbucks even has a snazzy sticker to put on these bags of used coffee grounds and each store has plenty of wicker baskets to use as a storage bin for these bags. However, this is just a band-aid solution and doesn't address the root cause.

I'm of the opinion the only way to authentically bring the aroma of coffee back to Starbucks stores is to find ways to grind whole bean coffee more often in-store. Maybe Paul can get more creative than me to solve this lack of coffee aroma issue. Paul, whattaya say?

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Comments

Couldn't agree more John. The smell plays a big part of the experience and is definitely missing (lacking) in their stores these days. Perhaps they could install small machines in their stores that release coffee aromas in the air similar to supermarket bakeries releasing baked good smells in the air and travel agents releasing sun tan lotion smells in their office.

Sounds like Starbucks really needs you back. Ever consider returning or doing consulting work for them on the side?

Steve ... SBUX could install "coffee aroma" machines in every store but that would be too insincere and inauthentic. (Not to mention sadistic.) If word ever got out that Starbucks was pumping in fake coffee aromas, the brand would take a MAJOR hit. (Kinda like the MAJOR hit Milli Vanilli took when they were found to be lip-syncing con artists.)

I do remember being in a meeting in 2002 at Starbucks where we openly discussed ways to bring coffee aromas back. The ideas ranged from having stores light coffee-flavored candles in-store to the more sadistic pumping in fake coffee aromas through the store's ventilation system. I’m not sure what action, if any, Starbucks took from that ideation meeting.

Starbucks has lots of smart people working on their business these days. I am sure they will solve for Howard’s concerns in some ways. However, my old school Starbucks marketing mindset is probably more in vogue today at Starbucks, given Howard’s concerns, than they were when I decided to leave in 2003.

Great insight. As a matter of fact, this issue is becoming more important, since my local Starbucks in Cambridge has recently introduced the Starbucks mcmuffin-egg-sandwich thingie, prepared in a convection oven. And those things smell terrible. Not only is the smell awful, somewhat artificial (like plastic or something), but it completely overwhelms any scent of coffee. And it hits you right when you walk in the door.

Given that the reason for not grinding coffee is for operational efficiencies ie. more revenues, less time. Plus, customers don't like to wait too long for their order either, especially since some of the stores are so cramped. I would suggest:
- John's idea of storing fresh and used beans around the stores. That's brilliant.
- Grind C.O.D in bulk during low-peak hours, you get the coffee aroma but don't delay orders.
- Get rid of any strong competing odors - it's bad enough not having the coffee aroma but fouling up the air with egg-mcmuffin-thingies odor doesn't help.
- Introduce more 'fresh-baked'complementing smells such as cinnamon, orange, (my personal favorite) pumpkin spice, etc. (Steve already mentioned this above)
- Keep people entertained while they are waiting, books, music, magazines. This might allow Starbucks to compensate for slower turnaround time with increased revenue from other sources.

John,

You forgot to bring back yesterday's theme in your solution for grinding beans. Not only is the smell good for the store.......but it is great theater! Scooping and grinding coffee is something that people can relate to easier than the art of a barista.

The C.O.D. grind should be a no-brainer; each store should have it down to a science in terms of how much they will need each day.

Personal grinding should also be in place for any premium grinds (truth in advertising; I don't think that Starbucks packaged coffee is anything to brag about).

Bring the grinding back as theater and get the smell as a much needed bonus!

BTW; thanks for the great postings. From your internal network is this helping feed any channels inside Starbucks?

Smell is a great point! It has been so long since I experienced the fresh scent of coffee in a Starbucks that I had forgotten it had been there. But thinking about it now, one of my favorite things about a local candy store- one that always brings friends and myself to it if we're on the promenade- is its scent. The smell is just so good, you can't help but be lulled in.

Although I would add to question- Over on Paul’s post he's mentions more of storing the coffee beans in the barrels which are displayed open aired and directly in the light (where he states that reduces quality and flavor of the coffee). I am sure there could be a container that holds the coffee still allowing for the 'scoop' action to occur.

I think yesterday’s theatre mantra is great. Starbucks really aught to consider how they can make their experience more visual (something you mentioned before), tangible, audible, gustatory and olfactory (which you've touched on today).

If it's all part of a play, then not having the Starbucks aroma is like missing the first act.

The first act is the most important act, and if more than that, it’s the opening act- it’s the opening. The first act is when the customer walks through the door and immediately should be hit with the aroma of Starbucks. A scent that, no matter where they go and smell coffee, that smell will be compared and bring back memories of Starbucks. But more than that, that smell will bring forth the urge not for coffee all in its lonesome, but for Starbucks. From there the customer glides across the floor, having gotten a little scent of heaven, now pleasantly awaiting their coffee as they peerr... you get the idea ;)

Starbucks lost it when they introduced "Milder Dimensions." Had I wanted Maxwell House I would have gone to the grocery store. Brands always screw up when they try to please everyone. That ends the brand equity. People, in the early days, went to Starbucks because they loved that dark roast taste. You either loved it or hated it. There was a choice. Just as when Honda introduced the first Civic - you could have any color you wanted - as long as it was black or white. I know a little about coffee - having made Folgers the best part of waking up. Starbuck's current "Think Earlier" print work is a chip right off that block. Keep hammering away at the caffiene! That's why the 20% of the audience - heavy users - account for 80% of the category volume. The deeper question is, what compels rapid growth companies to become like McDonald's - mature earning's entities. More importantly, what mechanisms can check that obsession? Can HR seek candidates that are not cookie cutter P&G types - a little chaos theory on the resume might help. Imperfection is one Selling Dimension that Starbucks might want to reintroduce. There are many posts on my blog regarding Starbucks too. Perhaps the buck will stop here - no pun intended - in the commoditization of marketers and manufacturers. http://advertising-age.blogspot.com

As a Starbucks Coffee Master, i think the more recent change are going to see the biggest change in terms of store aromas. I beleive, as part of the massive US overhall Breakfast paninis are being cut-out of the menu as this is the primary smell in stores currently, giving the coffee less of a contender. In the UK here, we still grind our COD every morning and our store always smells fantastic i'm told (i can't smell it anymore). In fact we've taken to leaving the boxes of ground coffee out with the lids off too allow the smell to penetrate and it gives the coffee a chance to degausse also. I think to cut out paninis would be the best solution personally. Their pungent smell sweeps throughout most stores because of the heat behind them. Remove those and i think we'll find the wafts of coffee beggining to bewitch our customers once again...

About 7 years ago, we had a coffee maker at home with a timer (like an alarm clock), that at a preset time, would grind its little hopper of beans we had loaded in the night before, and then commenced to drip brew our morning delight. I can't begin to espress (pun intended) the shear comfort and joy of the sound of the beans grinding, followed by the intoxicating scent of the coffee liquer being created. These "coffee" imprints, are as important to loyal Starbucks customers, as anything else one could "perceive" in the store. It wasn't broke, so why did it need fixing? Corporate greed fueled by board of directors ever incessant increases in "compensation packages"! We've seen it so many times its like a bad formulaic Hollywood film. Predictable and under delivered. Perhaps a way for Starbucks to truly get back on the horse, would be to consider going Private Equity, and stop cowtowing to Wall Street. Otherwise, look for the Golden Arches over all the Starbuck's doors.

You can ad that coffee is a performance enhancing drug used freely by athletes from all kinds of sports ever since WADA once again removed caffeine from the list of banned substances

what organizational intervention does starbucks undergone?

how is it implemented?

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