Tuesday, August 26, 2008
A Brandon Sighting
Brenda saw Brandon and his wife, Shannon yesterday. Brandon is the founder and ex-owner of Jupiter House. Don't think he makes it into town that much anymore. He and his family are doing some organic farming out in Ponder...got to talk to that cat!
Will The Clover Put Green Back In Starbucks' Future?
After several announcements from Starbucks regarding disappointing earnings, and Wall Street's abandonment of its once darling retailer, things looked pretty bleak for Big Green. But people forget the power that can be wielded once the giant is stirred.
Effortlessly, Starbucks purchased The Coffee Equipment Company and, in a single stroke, positioned itself to protect its market share from being poached at the top by quality-minded independents.
The Clover was the latest preoccupation of coffee fetishists, but curiously, few saw how its networking capabilities made it a highly-scalable, enterprise technology. Fewer still spoke of how this fact made it a technology ripe for the plucking. And yet, in retrospect, it could not be more clear that this, not beautiful boutique coffees at Stumptown's annex, would be its future. Each coffee can be profiled, roasted, packaged and shipped. That coffee can rollout on a specific day with Starbucks IT staff having uploaded its profile and dosing to the Clover at that, and every other store which will serve the coffee. The Clover can even be monitored remotely for certain maintenance issues, maintenance staff dispatched if there is a problem needing immediate attention.
In theory, it is an extremely elegant solution to the Starbucks' challenges. It addresses Starbucks' challenge of having a product of high-enough quality to be competitive with small-batch roasters and third wave coffee shops nipping at away at it's market share amongst consumers looking for the finest coffees. By having complete command of the coffee's extraction profile at each location, Starbucks has removed improperly calibrated equipment from its challenges. It also minimizes the need for highly-trained baristas. All things being equal, having the Clover should result in coffee of much higher cup quality and a high degree of consistency in the extraction regardless of location.
Of course, is Starbucks coffee good enough to compete cup to cup with the best small batch roasters? No. Even at its best, it will fall short. And will Starbucks be able to out-cheap its competitors at the bottom, Dunkin' Donuts and McDonalds? No.
Though the move to buy The Coffee Equipment Company and deny potential competitors access to the technology was smart, it is not so much an offensive move, as a defensive one. Starbucks position is defensive at top and bottom, hoping to hold most of its market share, but effectively giving up it's most discerning coffee customers, and ceding the commodity consumers to companies like McDonalds, who can generate even better economies-of-scale to beat up a competitor.
In a later post I'll talk about why it is good for independents that Starbucks has denied them this technology.
Effortlessly, Starbucks purchased The Coffee Equipment Company and, in a single stroke, positioned itself to protect its market share from being poached at the top by quality-minded independents.
The Clover was the latest preoccupation of coffee fetishists, but curiously, few saw how its networking capabilities made it a highly-scalable, enterprise technology. Fewer still spoke of how this fact made it a technology ripe for the plucking. And yet, in retrospect, it could not be more clear that this, not beautiful boutique coffees at Stumptown's annex, would be its future. Each coffee can be profiled, roasted, packaged and shipped. That coffee can rollout on a specific day with Starbucks IT staff having uploaded its profile and dosing to the Clover at that, and every other store which will serve the coffee. The Clover can even be monitored remotely for certain maintenance issues, maintenance staff dispatched if there is a problem needing immediate attention.
In theory, it is an extremely elegant solution to the Starbucks' challenges. It addresses Starbucks' challenge of having a product of high-enough quality to be competitive with small-batch roasters and third wave coffee shops nipping at away at it's market share amongst consumers looking for the finest coffees. By having complete command of the coffee's extraction profile at each location, Starbucks has removed improperly calibrated equipment from its challenges. It also minimizes the need for highly-trained baristas. All things being equal, having the Clover should result in coffee of much higher cup quality and a high degree of consistency in the extraction regardless of location.
Of course, is Starbucks coffee good enough to compete cup to cup with the best small batch roasters? No. Even at its best, it will fall short. And will Starbucks be able to out-cheap its competitors at the bottom, Dunkin' Donuts and McDonalds? No.
Though the move to buy The Coffee Equipment Company and deny potential competitors access to the technology was smart, it is not so much an offensive move, as a defensive one. Starbucks position is defensive at top and bottom, hoping to hold most of its market share, but effectively giving up it's most discerning coffee customers, and ceding the commodity consumers to companies like McDonalds, who can generate even better economies-of-scale to beat up a competitor.
In a later post I'll talk about why it is good for independents that Starbucks has denied them this technology.
Monday, August 18, 2008
Thursday, August 14, 2008
Let the games begin!
I could be talking about the Olympics...but I'm not. I am referring to what I hope will be a boon to the specialty coffee scene in Denton, Texas. Hydrant joins Jupiter House in Downtown. It has long been easy for cafes in Denton to consider themselves to "own" turf, but now with Hydrant a mere two blocks from Jupiter House I am sure they will be eyeing each other closely. My hope is that everyone will up their game and, in my opinion, that will grow the market.
[Full disclosure: I have worked with Coffee Eiland, and have met with Mike McKim of Cuvee]
Jupiter House offers Cuvee coffee, roasted in Spring, Texas by Mike McKim and Hydrant offers Coffee Eiland coffee, roasted in Dallas by Clay Eiland. Both roasters roast in small-batches and consider themselves artisans. While both of these roasters are good, their roasting styles are apples and oranges: Cuvee tends to roast lighter. I have had excellent coffees from both roasters that ranked closely with artisan roasters of national repute. I am excited for coffee in Denton!
[Full disclosure: I have worked with Coffee Eiland, and have met with Mike McKim of Cuvee]
Jupiter House offers Cuvee coffee, roasted in Spring, Texas by Mike McKim and Hydrant offers Coffee Eiland coffee, roasted in Dallas by Clay Eiland. Both roasters roast in small-batches and consider themselves artisans. While both of these roasters are good, their roasting styles are apples and oranges: Cuvee tends to roast lighter. I have had excellent coffees from both roasters that ranked closely with artisan roasters of national repute. I am excited for coffee in Denton!
Do I know you? I'd like to...
A fellow coffee professional--much my senior in experience and knowledge did me the favor of opening his network to me by inviting me to connect on LinkedIN. I have had a profile there for a while, but it was a tepid effort at best. To say that I am ambivalent about social networks is a slight understatement. Networks like LinkedIN just bear too close a resemblance to MySpace, at least in my previous way of thinking. Once I saw the connections opened up to me by just being able to view one person's network, I have to say that seeing is believing. There really are not only a lot of connections to be made, but they are highly pertinent ones. Needless to say, I have been working on my LinkedIN profile and reaching out to people in my network to join so I can perhaps return the favor in some small way.
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