Danny Meyer on Starbucks

I’m finally getting around to reading Danny Meyer’s SETTING THE TABLE book. Danny is a highly successful New York City restaurateur and his SETTING THE TABLE book recounts his restaurateur career and business bent.

Throughout this memoir, Meyer serves up sides dishes of worthy business wisdom. (I’m sure to share some of his tasty business wisdom tid-bits in a future post.) And on page 134, Meyer shares his take on why Starbucks Coffee has found success. His take doesn’t share anything radically different than what’s been shared before. However, it is interesting to read how a restaurateur views Starbucks. Enjoy …

“Starbucks took the notion of drinking good coffee (and standing in line to buy it) and figured out how to make the experience of drinking coffee with a community of other like-minded people became the real star of the show.

The company also learned how to superimpose its blueprint onto thousands of locations north, south, east, and west while also conveying the sense that each Starbucks belonged to its particular community.

It was brilliant entrepreneurship to grasp that selling coffee is secondary to creating a sense of community. Coffee sells (and is habit-forming), but performing a daily ritual with a self-selected group of like-minded human beings also sells. A business that doesn’t understand its raison d’etre as fostering community will inevitably underperform.”

source | SETTING THE TABLE | pg. 134 | Danny Meyer (HarperCollins, 2006)

Comments

[cinoman]

“Starbucks took the notion of drinking good coffee (and standing in line to buy it)" - About this comment one can argue, because there are many other stores which have a much better quality of coffee (which has to be seen relatively to the taste of the customer, very diversive)

"and figured out how to make the experience of drinking coffee with a community of other like-minded people became the real star of the show" - This tipe of community is fitting to people who
1. Don't drink coffee at home
2. Don't want a coffee to go
3. Can afford the coffee in the store
But besides that the customers are very diversive too!!

I think the success was because of the very early developped business concept in 1992 and 1993 (Starbucks developed a three-year geographic expansion strategy)
- see http://www.mhhe.com/business/management/thompson/11e/case/starbucks-2.html

[Thomas]

I just saw a news story early this morning, saying that Consumer Reports (in the latest issue) did blind consumer taste test studies of coffees from Starbucks, Dunkin Donuts, McDonalds, others. It appears that both Dunkin and Mickey D's beat Starbucks.

I'm thinking this could be a problem for them. Community and nice store environment yes, but at the end of the day, if you are getting premium prices for coffee, the quality and taste need to be there. Honestly, this leads me to wonder if all the accolades have gone to their heads a bit, and they have forgotten that at the end of the day it's coffee they sell. I'll be very interested to see how they respond to this, if they do.

John, being an ex Starbucks person, I think it'd be interesting for you post the story/results and see what your readers think. I thought of you immediately as I saw the story this morning!

[johnmoore (from Brand Autopsy)]

Thomas ... this isn't new news. For at least a decade, Starbucks has ALWAYS lost out to "lesser quality" coffee brands in the Consumer Reports study. Hasn't hurt the company's image before but it does make one reconsider the "expertise" of the Consumer Reports panel.

As a beer guy, I read the Consumer Reports listing of the best beers they published years ago and LAUGHED. The "aggressive" (i.e. flavor-heavy) beers were rated low and the milder beers were rated higher.

As a person and a marketer, I do think Consumer Reports is the best arbiter when it comes to "software" products like food. I do still value the opinions of Consumer Reports with "hardware" products like cameras and tvs.

[Thomas]

Oh. Well, I guess it was new news to me, and interesting at that. I'd never have guessed such an outcome, by any panel, theirs or otherwise!